How Automation Helps Overcome Invoice Processing Problems
Invoicing may seem like a fairly simple process. But unfortunately, invoice processing problems are commonplace, especially if you’re solely relying on manual input from internal teams. Taking a manual approach to invoicing is time-consuming.
What’s more, the inevitable invoicing errors will consume even more of your employees’ time and resources. For smaller organisations, this can create bottlenecks and significantly impact payment cycle times.
10 Common Invoice Processing Problems
However, invoicing problems don’t need to be inevitable. By embracing automation, you can overcome many of the usual pitfalls experienced by accounts departments.
Need some help streamlining your process? Below, we explore some of the most common invoice processing issues, along with how you can avoid them.
1. No Consistency
Invoice processing problems quickly arise if you’re dealing with multiple templates. If you’re dealing with many vendors and customers, you’re almost certainly working with a wide variety of templates.
This disparity naturally presents problems. If you’re dealing with invoices manually, protracted processing time becomes the norm. If your operation is larger and selling products and services to a broad customer base, you’ll also encounter trouble.
Different customers will have different expectations when it comes to what an invoice should look like. If you’re having to raise invoices repeatedly, invoice processing problems become a constant headache.
2. Incomplete Invoices and Missing Documents
As a business, the last thing you want to have to deal with is delayed payments. Sadly, missing invoices are a fact of life for many organisations. The occasional misplaced invoice won’t cause too much of an issue for your cash flow. However, enough of them will.
This invoice processing problem is more of a concern for larger companies that deal with end-of-the-month payments. If missing invoices have led to delayed payment, you’re unlikely to notice anything until the following month or later.
Generally speaking, you’ll have to begin the invoicing process from scratch. Many times, this can lead to further delays. Thankfully, switching to an automated management system can help make delayed payments a thing of the past.
3. Essential Information is Missing
Many invoice processing problems can be attributed to missing and incomplete data. If you want your invoices to be paid on time, you’ll need to ensure they’re as accurate as possible.
Although some clients may be quick to flag an issue with missing data, most will simply push an incomplete invoice to the back of the queue. In many cases, an incomplete invoice is likely to gather dust until someone rectifies the issue.
4. Miscalculations and Errors
It’s not just missing data that can lead to your invoices being moved to the bottom of the pile. Inaccurate documents laden with errors are also likely to lead to invoice processing problems.
Invoicing errors are commonplace. They’re usually the result of manual errors, be it a simple miscalculation or a data entry issue. If your invoicing process is largely manual, you’ll need to rely on robust checks to spotlight these errors. Even then, there’s no guarantee they’ll be flagged, leading to delayed payment and strained client relationships.
5. No Contact Details
This is one of the biggest causes of invoice processing problems. Sometimes, contact information is lacking. Other times, the contact information is out of date or incomplete. In both scenarios, the result is the same.
Most businesses only realise there’s an issue with contact information once a payment due date has passed. If payments aren’t due until 30 days after invoicing, this delay can prove punishing for cash flow.
6. You’re Relying On Too Many Systems
A typical accounts department will use multiple systems to submit invoices to clients. This decentralised approach can easily lead to invoice processing problems.
First and foremost, relying on too many systems is time-consuming. It puts undue time pressures on accounts teams and lumbers a business with added expenditure. Furthermore, it’s complicated and introduces unnecessary processes into the equation. In short, a lack of integration increases the odds of manual error causing even more issues for invoice processing.
7. Recurrent Invoicing Errors
No business wants to contend with recurrent invoice processing problems. As well as impacting revenue streams, repetitive errors reflect badly on you as an organisation.
If you’re encountering the same mistakes every month, you’ll constantly have to deal with missed payments. If the issues lie with things like missing data and outdated contact information, the fact you haven’t rectified these creates the wrong impression with clients. If you want to maintain face with existing clients and protect your credibility, there’s no place for repetitive invoice errors.
8. Increased Demand in Accounts Departments
Even a well-oiled accounts department will have to contend with a high volume of inquiries from vendors and customers. When you factor invoice processing problems into the mix, fielding inquiries can occupy a substantial amount of time best spent on other tasks.
The situation is even worse if you’re relying on manual processes. What’s more, if a manual system is rife with errors, your accounts teams won’t be able to respond to questions with any degree of authority.
9. There’s No Visibility
Manual invoice processing is notorious for a lack of visibility. A manual approach means you’ve no chance of ascertaining where payment status stands in real-time.
Even with effective email communication, you’ll struggle to determine the status of your payments. This has huge implications for cash flow, but also consumes countless man hours and impedes everyday operations.
10. Invoice Processing Problems Make Scaling Up Impossible
Just because manual invoice processing is working out for you right now, doesn’t mean it will be in the future. As demand increases, so too will your need for the manpower required to handle invoice processing.
Recruiting new additions to your accounts department takes time. Not only will you need to actively recruit, but you’ll also need to allow time for the entire onboarding process. Recruiting to meet demand can be effective in the short term, but it’s not proactive and the approach is riddled with pitfalls.
Why Automation is the Way Forward
An easy way to overcome invoice processing problems is to embrace automated accounts payable solutions. An automated approach eliminates human error and recurring invoice processing issues. What’s more, it’s a far more efficient way to do business.
In addition to slashing invoice processing times, your business benefits from reduced operational costs. Furthermore, potential errors and invoicing discrepancies are drastically reduced. By adopting automated processes, your internal accounts teams are also freed up to focus on more important tasks.
Dependence on manual invoice processing has no place in a modern business. Manual invoice processing is incredibly time-consuming. During busy periods, entire departments will need to commit to data entry tasks, invoice creation and verification. This is often before follow-up inquiries enter into the equation. The more manual effort involved, the greater the risk of human errors becoming part of the problem.
An automated management system streamlines the entire process. Firstly, it allows businesses to identify key performance indicators. Furthermore, it allows for the smooth implementation of three-way matching to save money, improve records and eliminate the chance of fraud. Payment cycles also benefit from automation, making it a must if you’re struggling with cash flow and outstanding invoice payments.
Take Charge of Invoice Processing Today
Looking to streamline invoice processing? Speak to the team at SmartOffice today and say goodbye to inefficient manual processing. SmartOffice AP is a cloud-based accounts payable solution that can yield savings of up to 80%.
Our automated management system solutions will ensure you enjoy maximum visibility at all times. What’s more, our innovative automation software means you’re free to scale, without compromising existing workflows.