In a paper-intensive AP processing department, or Shared Services environment, many studies and white papers indicate that the processing of a single invoice can be costing you somewhere between $15.00 to $38.00 per invoice.
That’s a lot of money and it takes a lot of people to do it that way!
So why do so many companies still do it that way?
If you experience some of the issues that have caused other companies to improve their AP process, seek a financial specialist who can meet with you to show your company how to change the process, reduce internal costs, process invoices faster and improve relationships with your vendors.
- Are most of your invoices received in paper format?
- Are invoices processed in several different locations or facilities?
- Are losing of misfiling invoice paperwork?
- Are you relying on manual data entry to capture information in an inefficient process?
- Do you have visibility into outstanding liability issues?
- Do you experience a high number of exceptions and discrepancies when processing invoices?
- Are you unable to process invoices in a timely manner to take advantage of any prompt payment discounts offered by your vendors?
Professional AP document scanning companies like CTI are able to provide business process improvements by moving the AP processing to front-end capture that eliminates a lot of the manual handling of paper invoices received through the mail each day.
The biggest benefit to companies automating their AP process is to take advantage of prompt payment discounts that can easily pay for the new system in less than a year.
The second biggest benefit to companies is the elimination of duplicate payments and the cost of trying to retrieve money paid out do to inconsistent processes that are dependent on pushing paper through the office and have many people touch it throughout the process from initial receipt to processing the check.
How long does it take your company to process an invoice for payment? The worst offenders (bottom 30%) with the slowest processes, average about 21 days to process a payment. The average company (middle 50%) out there takes about ten days. However, the companies who have addressed this issue (top 20%) through business process automation and up-front scanning of the invoices upon receipt are able to process an invoice in only four days.
These are the companies who are taking full advantage of prompt payment discounts and easily recovering the cost of their investment in automating their AP invoice processing system.
Through the effective use of outsourced services, the front-end capture process can be handled with digital mailroom services, scanning and data capture operations that will then feed critical information and images directly into your ERP workflow process, cutting several days off your current internal processes.
When selecting a company to help manage the process, invoices typically come to designated post office boxes and are then sorted and scanned daily. Based on your internal requirements, data is captured that matches up with your GL codes and if requested, the completion of line item extraction to validate all items on purchase order based invoices against known information in your ERP system.
Processing time varies depending on your selected vendor. At CTI all of this is done within 24 to 48 hours of receipt of your invoices at our production facility. Invoices will be routed for approval based on purchase order requisition, vendor name, contact name or department and invoice amount.
It’s quick and accurate and your knowledge workers are not being asked to do clerical work so that you can process invoices for payment.
Contact us today for a free discovery session that will allow us to recommend solutions to your paper-intensive invoice processing challenges.