Dealing with invoices isn’t always a fun experience. The time spent receiving, coding, approving, recording, and paying invoices can add up!
According to a PayStream Advisors study, a non-automated Accounts Payable (AP) process on average takes 45 days at a total cost of $15 per invoice! Think about that next time you’re paying a $12 vendor invoice!
Moving to an AP automation platform can not only reduce the time and cost of dealing with invoices, but it has additional benefits across all aspects of the AP cycle.
Invoices can be received in a variety of ways: email, mail, downloading utility bills, and my personal favorite anecdote: fax! Adopting an AP automation platform streamlines this process and helps keep vendors compliant.
It also eliminates the need for paper at all! The platform can centralize digital invoice records and contribute to a paperless office. Related to our next points on Approvals and Paying Invoices, we see a lot of time and money spent on mail/courier/transportation of paper invoices and cheques that can be eliminated.
One of our most popular features at CondoWorks is the ability to automatically download all types of utility invoices. This can save a ton of time by eliminating the need to handle mailed invoices or having to log-in to different utilities and download invoices.
It’s important that all invoices are properly approved and that there is a sufficient record of that approval.
With an AP automation platform, approvals can be enforced by the system, different rules and workflows can exist (e.g. invoices above management’s spending authority limit need extra approval or invoices processed by limited licensees which are over $500 need extra approval), and a verifiable audit trail is easily created.
As an added benefit in this COVID-era, for those managers who work mostly on-site away from head office, or any of us who enjoy heading south in the winter, approvals can be done electronically from anywhere!
Those who have done bookkeeping know, one of the most tedious aspects of that role has to be entering invoice data into the accounting system.
An AP automation platform can eliminate the vast majority of manual data entry, and does so with a much higher degree of accuracy! This can be accomplished by features such as invoice data extraction, and automatic synchronization to the accounting system.
This may sound blasphemous or scary to some, but typically paying invoices by hand-signed cheques is the most inefficient and least secure method!
With an AP automation platform, you can typically still pay via cheque, but you also have the ability to pay vendors faster and more securely through electronic payment methods such as EFT (direct deposit).
Returning to the stats mentioned at the beginning of this article, a fully automated AP process can reduce the AP cycle from 45 days to 5 days, and the cost of paying an invoice from $15 to under $3.
This benefits all stakeholders: vendors, boards and managers.