5 Reasons to Automate Supplier Invoice Processing

Automated supplier invoice processing is the use of software to manage invoices for accounts payable, match invoices to their related documents, and update the information in your Enterprise Resource Planning (ERP) system. 

Automating this process will help you speed up invoice approvals, reduce processing costs, and minimise errors. With time-saving advantages, an automated system will also allow your team to use their valuable time to work on higher value tasks. 

If you’re building a business case for an automated supplier invoice processing solution, here are five reasons why your organisation should make it a priority. 

Five Reasons to Automate Supplier Invoice Processing

1. Time Savings

Let’s look at a typical invoicing workflow: 

Of course, this is a bit of an over-simplification in some cases. The chances are there will be some back and forth between buyer and supplier prior to approval, especially if there are any discrepancies between documentation. As anyone with AP experience will know, this process could take anywhere from 30 to 90 days end-to-end.

Using an automated system, however, means that you can approve invoices in minutes, eliminating the need for human interaction and significantly speeding up the payment timeframe. To put this into context, reports have found that 87.6% of firms in Western Europe and more than 90% of enterprises in the United States report regular late payments. The UK seems to suffer more than most, with the highest proportion of overdue invoices at nearly 50%.

Improve your supplier invoice processing by uploading your documents into an automated system. Use of sophisticated validation and auto-matching functionality eliminates the need for manual intervention, speeds up the process and provides greater visibility and auditability.

2. Cost Savings

We’ve all heard the saying, “Time is money”. Well, supplier invoice processing is no exception. Through process automation you can save money on labour, printing, and postage costs, as well as interest fees and late penalties. There is an immediate return on investment as cost savings are up to 80% of supplier invoice processing costs.

This means that businesses can take advantage of huge savings in time, money, and effort by simply eliminating the need to manually process and reconcile suppliers’ invoices.

3. Cash Flow and Performance Optimisation

Cutting costs and expediting payments means many businesses will have more cash on hand. This means more funds available to invest in new business opportunities, staff training, expansion or to improve your business product offerings. It also frees up valuable time for qualified staff to focus on higher-value tasks, outside of repetitive paper-based activity.

4. Efficiency Improvements

To err is human. Unfortunately, this means that invoicing errors account for around 15% of late payments. Automated supplier invoice processing will help with increasing invoice accuracy, process control, accounts reporting, accountability and transparency at all stages of the process. In addition, enhanced archiving gives you a single location to store, review and compare past invoices.

With all your invoice data and details in one location (private or public cloud) you can find and analyse any aspect of your accounts payable process at the click of a button, from any location. This is crucial for any company with remote workers.

Utilising an electronic supplier invoice processing system delivers immediate efficiencies but is also easily scalable, allowing your business to grow. Your AP team can take an increased volume of invoices in its stride, without impacting quality of service.

5. Regulatory Compliance

The invoice is a crucial record for proving tax compliance, and most tax audits take place years after the specific business transactions have occurred. Over time, physical copies of documents are more likely to be misplaced or misfiled, leading to potential delays or inaccuracies in the audit process.

Automated supplier invoice processing ensures tax compliance and data security while lowering associated costs. All the relevant documentation is securely stored together for the stipulated length of time.

SmartOffice Accounts Payable

For an automated supplier invoice processing solution, choose SmartOffice Accounts Payable (SOAP). SOAP is a smart, powerful cloud-based electronic Accounts Payable Solution that reduces the cost of processing invoices by up to 80%. The workflow becomes fully touchless, allowing for remote working, approvals, and complete visibility.

Using an automated system you’ll have no more lost invoices, accounting errors, accounts put on hold, lost VAT reclaims or unnecessary over-payments; delivering a structured, streamlined process for handling all incoming invoices.  

Supplier invoices received via email are processed directly into your accounts package, eliminating the need to print invoices, sort through post, forward them for approval and match them to the correct purchase order.

How SmartOffice supplier invoice processing works:

Step 1:
Suppliers email their invoices to a specially created SmartOffice email account.  

Step 2:
Data is automatically extracted from the supplier invoice, before being coded, processed, distributed, approved, and stored.

Step 3:
SOAP updates all accounts, reconciles them with statements and automatically searches for any missing invoices, whilst retaining all relevant documents. 

Key features of SmartOffice AP

Price Watch:
Monitor price movements and fluctuations between invoices to instantly identify trends.

Purchase Order Matching:
Link your PO system to display the PO, match to the correct invoice and automatically process the invoice.

GRN Matching:
SmartOffice AP can display and/or automatically process invoices that correctly match goods receivable notices.

Statement Reconciliation:
Instantly reconciles statements against processed invoices and automatically request copies of any missing invoices.

Delivery Confirmation:
Delivery confirmation can be set on any invoice with discrepancies to be automatically sent to your supplier for resolution.

Document Tracking:
Invoices that require approval are tracked, illustrating whose approval is required and how long approval is outstanding.

Full Knowledge Approval:
Users have access to all the information required to make a decision when manually approving an invoice.

Nominal Ledger Coding:
Automatic Nominal Ledger coding can be based on a wide variety of criteria, including: supplier, line item, PO detail, manual overriding, and branch or project coding.

Issue Checking:
The system facilitates ongoing checks for possible issues and retains the invoice for your review/editing as required.

Search and Storage:
Stores all processed invoices for 7 years and provides an extensive search facility for users.

Intuitive Dashboard:
A user-friendly management interface that provides complete visibility of your supplier invoice processing workflows.

Get In Touch & Book Your Free Demo

For more information on our supplier invoice processing software, book your free demo below.