Going paperless can not only deliver cost savings across the board, but can also help in reducing errors and improving operational efficiency. Sure, it may require your team to define and standardise various accounts payable procedures, but the initial investment of time and effort can yield rich dividends. If your team is following a manual, paper-based process, the below issues are likely to crop up time and time again:
- Difficulty of handling surges in invoice volume – it’s a labour intensive process.
- Loss of accuracy and high chances of errors owing to manual routing and data-entry mistakes.
- Lack of real-time visibility on invoice status and impossibility of monitoring each and every invoice.
- Lack of process efficiency + the costs associated with paper invoices make AP a lot more costly than it needs to be.
- Missing out on discounts associated with timely payments – owing to a slow paper-based accounts payable cycle
Benefits of a paperless accounts payable process
1) Cost savings: Following the initial investment in a software system, businesses see a drop in costs associated with creating, managing, sorting, storing and maintaining paper-based invoices and documents. With fully paperless processes, costs associated with storage space, printing, filing and man-hours can be significantly reduced.
2) Streamlined and consistent processes: Evaluating, defining and streamlining AP process flow is a necessary part of going paperless. Companies often have variations in accounting processes and reporting processes across locations. Paperless accounting becomes a good reason to introduce process consistency across the board.
3) Improved productivity: In addition to speeding up processing through automation, paperless AP processes also eliminate common manual errors like duplicate payments, incorrect PO numbers or payments to unauthorised vendors.
4) Improved visibility: Clear audit trails for every invoice processed digitally ensures complete accountability. Real time data on the stats of individual invoices as well as the overall status of the process allows the AP personnel to satisfy a variety of reporting requirements.
5) Supports better management reporting: A smooth and zero-backlog accounts payable cycle can play a crucial role in speeding up financial reporting. For accounting departments that are aiming to reduce the time taken to create monthly management accounting deliverables, a paperless AP process is a blessing.
6) Better relationships with suppliers: Paperless and automated AP processes help ensure timely payments, which in turn leads to smooth relationships with the suppliers. In addition to this, timely payments can help businesses in certain industries save huge amounts of money through supplier rebates given for consistent on-time payments.
7) Digital approvals and payments: Delays and errors related to paper-based processes are a thing of the past once you have a paperless processing place. With a PO system to raise, monitor and approve payments online, everyone involved in the process has visibility on the status of an invoice, which speeds up the entire cycle. In addition to this, fraud prevention measures can be rolled into the system, reducing the chances of invoice fraud.
As one of the leading accounts payable outsourcing service providers, we have helped businesses to go paperless while implementing accounts payable best practices, delivering significant efficiency improvements and cost savings. Get in touch with us to find out how we can help your company achieve the same.