The World of Invoice Approval & Payment. FREE ebook

Transcription

1 The World of Invoice Approval & Payment FREE ebook

2 Supplier Invoices Approval & Payment Every business has invoices to be paid and there are a number of factors that can determine how efficiently you are able to approve and pay them. This process costs the business time and money. The first question is, how much do you want to spend on this necessary task that doesn t actually contribute to your business s revenue generation? The second question is, how do you do it? Most businesses start with a manual process for the approval of their supplier invoice payments and as they grow they develop a team of Accounts Payable (AP) staff who chase these invoices around from receipt to payment. If you experience any of the characteristics listed below, you could probably benefit from a smarter, more business optimised solution: Paying the same invoice twice Multiple approvers for invoice payments Missing invoices More accounts payable staff than sales staff Hundreds of invoices paid every month 80% of your invoices from 20% of your suppliers Problems with filing and retrieving invoices Let s take a look in more detail at these scenarios... 2

3 SCENARIO 01 Paying the Same Invoice Twice A manual system of receiving and processing invoices can lead to a single invoice being paid more than once. If this happens you may or may not be informed by the supplier. A refund could take some time or may be in the form of a credit note. Now your money is tied up waiting for a future order to be processed. It is not just the financial hassle this causes, but also the accounting reconciliation errors and potential business embarrassment. There are many manual/human errors that can occur that contribute to duplicate payments. These can all be eliminated if you start to use an automated invoice management and approval system. So, why not indulge in a safe duplication of accounting resources and review this ebook twice! Take the time to control your business accounting decisions and help remove any unnecessary costly mistakes. An automated approval system will make it extremely difficult to pay the same invoice more than once. Your invoices are recorded electronically and the system carries out comprehensive validation checks to prevent duplication and even identify potential fraud. You will now never need to spend time and money tracking down duplicate-payments and reclaiming them. 3

4 SCENARIO 02 Multiple Approvers for Invoice Payments Typically, supplier invoices will require the approval of more than one person before they are paid. Shared responsibility will often mean delays as the printed invoice and accompanying documentation travel between people, desks and office locations. Sometimes urgent and non-urgent invoices will be grouped together and kept until a certain date or quantity is reached before being forwarded for approval. Approvers change and delegated authority is not always exercised consistently. Finally, when the invoice reaches the approver they confirm the accounting payment code and make other handwritten notes that then require interpretation before payment. All these issues combine to cause delays, errors and frustration for both suppliers and accounting staff. Take a stand and recommend your own approved way forward to a better invoice handling process. Adopt an effective invoice approval system. Send approval requests electronically to the right people, and let them review and code invoices on screen with a few clicks - no more bits of paper moving from desk to desk, or office to office Approvals are quickly confirmed from a desktop or mobile device. Once approved the invoice is immediately ready to be added to a payment run. Set up within the system who approves invoices for each supplier and there s no chance of the invoice going astray. The electronic approval and audit trail is traceable by management and accounts staff. 4

5 SCENARIO 03 Missing Invoices There is a long list of reasons why you could be faced with a supplier demanding payment and no invoice in front of you to justify it. Mailed invoices may never be received or if they are, by the wrong person to action them correctly. An invoice can be left in a staff member s growing to do pile and never actually get seen to. Whatever the reason, the sad reality is that there are many supplier invoices that get lost, misplaced or delivered incorrectly. The impact on your business includes many things: an inaccurate snapshot of your current liabilities frustration for staff and suppliers overdue debts that finally come to light after a lengthy period, and many more... Combat these potential headaches by finding ways to receive all your AP invoices electronically and have them checked, logged and tracked automatically. Tell your suppliers to stop sending you paper invoices and start ing them. It will actually save them money too. By automatically processing invoices, they re logged permanently in the system and cannot be lost. Ensuring all invoices are processed and paid on time will naturally improve your supplier relationships. 5

6 SCENARIO 04 More Accounts Payable Staff than Sales Staff As your business grows your operations and background tasks scale up too. Your sales activity increases and this has an impact on everything else. The number of suppliers increases and now the AP staff have to process and pay many more invoices each month. Over time it is easy for a business to end up with a sizeable AP team that only contributes cost to the bottom-line. You may not actually have more AP staff than sales people, but the bigger you get the more it will seem that way. Why not change the way your accounts department works and become more efficient and capable of supporting a sustained growth in business sales. Automating your invoice approval and payments process will help you optimise the number of accounts payable staff your business needs. Your AP team will be able to process more invoices in less time. You can then choose how to use this reclaimed capacity. 6

7 SCENARIO 05 Hundreds of Invoices Paid Every Month You re receiving, processing, approving and paying hundreds of invoices every month. Great if that s your business, but unless you re an accounting bureau there are better things you could be doing with your time. Your options are limited and the answer seems to be to employ more people to join the battle against the ever increasing wave of paperwork. Hopefully the increase in invoice traffic is a sign of proper business growth but at what cost? The demand for space required for storing this paperwork just increases. With higher processing volume the ability to met every payment deadline decreases. More mistakes are made and the associated corrections take time. This can lead to staff frustrations and increased supplier complaints. So what you really need is a way to deal with same the volume at a significantly reduced cost. An automated invoice approval system will seriously reduce the cost per invoice as it is moved from receipt to payment. Processing time will go down and allow you to invest your time and energy in other things. 7

8 SCENARIO 06 80% of your Invoices from 20% of your Suppliers It s likely that the well known rule applies to your AP Invoices. If this is true you have a golden opportunity to streamline your processes. The first problem with this scenario is that you have a large number of records to process with similar reference numbers and details. If you tackle this manually the risk of introducing errors increases plus it takes a long time. The second problem comes when you try to reconcile your major suppliers statements. Errors, lost invoices and delays can make the process of agreeing the balance that s payable, a living hell. So, why not reverse the tables and spend 20% of your time on 100% of your invoices? Manage your supplier invoices with an automated approval system and eliminate manual handling. Automate the invoice coding in preparation for approval. Match the invoices automatically to purchase orders Simplify the reconciliation of your largest suppliers statements. 80% 20% 8

9 SCENARIO 07 Problems with Filing and Retrieving Invoices Storing your paper AP invoices is costing you money. The filing cabinets and archive boxes you buy make your stationery supplier happy and the space you use to store them adds to the cost of your rent. Electronic storage has become extremely inexpensive over the last decade and every year the cost per megabyte goes down. Manual filing introduces risks as well as costs. Documents can be filed in the wrong place, damaged or destroyed. They can t be accessed by people in other departments, or locations. Two people cannot access the same document at the same time. And when a document is retrieved from a file, what guarantee is there that it will ever be put back? If several people need access to an invoice, chances are right now they re taking a copy. As we ve seen this can lead to duplicate payments but it also costs money and fills up your storage space. Retrieving and replacing paper documents takes time and causes costly delays, particularly when external auditors are on site. The security of financial documents often gets overlooked. If it relies on people locking storage rooms, filing cabinets and desk drawers when they re not in use, you may have no effective security in place at all. How much easier would it be if the document behind each transaction was only a click away? Filing your AP invoices electronically means they are available at any time on desktop and mobile devices. Related invoices are automatically connected to approval records, purchase orders and statements. People can retrieve and view invoices without leaving their desks. Data is stored securely and is restricted to staff who have a legitimate need to see it. Costs for photocopying, stationery and file storage will be slashed. 9

10 Start to Automate your Invoice Approvals & Payments Act now and contact Verde to learn how we can help you optimise your invoice approval and payment processes. Our expert optimisers will sit down with you and quickly evaluate where we can make positive financial and process improvement for your business. We can demonstrate the software and match it to your requirements. Call us on or us at

11 VERDE are experts in optimising your business to increase revenue and productivity. VERDE (Auckland) Level 3, 435 Khyber Pass Rd Newmarket Auckland 1023 Phone VERDE (Christchurch) Level 1, 6/245 St Asaph St Christchurch Central 8011 Phone sales@verde.co.nz