4 Ways to Slash Invoice Processing Times

Invoice processing is an essential part of running a business successfully. Not only does it mean that you’re paying your suppliers and vendors on time, but it also gives you peace of mind that the invoices you’re issuing are being paid in a timely manner also. It gives accountants a clear and straightforward view of your finances, enabling full transparency and credibility in the process. 

However, invoice processing, regardless of whether it’s incoming or outgoing, is a task that needs to be completed in a way that is time-efficient, and leaving it down to a human workforce isn’t always something that ensures a quick turnaround. That’s why many business owners look to automated invoice processing services, such as the one we have available here at Cleardata. Let’s look deeper into the world of invoice processing so that you can slash the time it takes.

What is invoice processing?

Invoice processing is self-explanatory. It’s the processing of an invoice, whether it be incoming or outgoing. Essentially, invoice processing involves following a complex series of steps, including:

  • Receiving an invoice from a supplier
  • Matching the invoice against a PO
  • Sending the invoice to approvers
  • Determining a remittance date
  • Paying the amount displayed on the invoice
  • Recording all details about the invoice in the general ledger

By definition, invoice processing is a business function that is performed, usually, by an accounts payable department. We’ve already touched on the cycle that is followed when an invoice comes in or goes out, but it’s often a collection of tasks that are carried out by a human workforce. 

To help reduce invoice processing time, automated invoice processing services from Cleardata will streamline the entire process, from start to finish. As well as slashing the time it takes, it also reduces errors and ensures maximum accuracy. Let’s take a look in more detail at the main steps involved in invoice processing.

What are the main steps in invoice processing?

When it comes to manual invoice processing, you’ll likely come across several different bottlenecks along the way. Whether it be waiting for approval or waiting to pay a vendor, for example, it can be a painfully slow process when left to your human workers. 

Where they will still be carrying out invoice processing to the very best of their ability, they’re no match against an automated invoice processing service, like the one we have available here at Cleardata. 

Automated invoice management solutions are highly-accurate and sought-after, especially in this digital age. Currently, the invoice processing strategy that’s adopted in a manual capacity includes the following, and you’ll then start to realise why automated invoice processing is the way forward:

Step one – a vendor sends an invoice to your company

Step two – your company receives the invoice and subsequently matches it, manually, to a delivery note or shipping receipt. This step could take a considerable amount of time, especially as it’s prone to manual error also

Step three – the manager will review and approve the invoice, but they might need additional approvals from upper management, so factor this into the processing time also

Step four – once the invoice has been approved, they will proceed with payment to the vendor, looking at different channels of payment, including cheque, bank transfer or an online payment

Step five – all completed payments will be reconciled and recorded in the general ledger for future reference

How to reduce invoice processing time

Now we understand what invoice processing is and what’s involved in it from start to finish, it’s time to start looking at how you can streamline the invoice processing itself. If you’re unsure about how to do this effectively, especially if you’re going from manual processes to automated ones, then we’re on hand to offer you some advice when it comes to streamlining your invoice processing strategy. From cycle-time monitoring to imaging as a service, here’s how you can reduce invoice processing time for your business.

  1. AP invoice automation software

It’s a challenge for large companies to hit those important payment deadlines on time unless they have a seamless, smooth-running accounts department. Something that helps with that is the implementation of automated invoice processing software. However, it’s important to remember that no two pieces of invoice processing software are the same. One might have a greater level of accuracy than the other for example. Do your own research and ask for some advice and guidance from a professional, such as the experts we have here at Cleardata.

  1. Cycle-time monitoring of approver responsiveness

Cycle-time monitoring is essentially seeing how long an invoice will wait before someone takes any action against it. In a way, you’re identifying any and all bottlenecks that might be present when it comes to invoice processing. Bottlenecks can hold everything up, no matter where that bottleneck might sit along the way. 

From waiting for invoices to be issued in the first place to waiting considerable periods before receiving payments, cycle-time monitoring will identify those bottlenecks, allowing you to put corrective measures in place as soon as possible.

  1. Imaging as a service

The majority of the time, when it comes to invoice processing, businesses will choose an automated programme to do it all for them. If you already have this in place, then the likelihood is that you’ll already have imaging software in place. 

However, the thing to understand is that not every type of imaging software is the same. If you have a simple system in place, then it won’t do the recognition work, for example, whereas more advanced pieces of software will recognise a lot more information. 

This is incredibly advantageous because it can reach as much as 90% recognition, which is impressively accurate when compared to the recognition abilities of a human. However, imaging as a service has an error-free rate of as much as 98%, so why not choose imaging as a service over other alternatives?

  1. Reduce human contact

Otherwise known as ‘reducing touches’, something that will help when it comes to reducing the amount of time it takes for you to process your invoices is minimising the amount of human contact each one gets. This is because you’re therefore limiting the risk of human error. 

In addition, it always takes a human far longer to process invoices and paperwork when compared to an automated invoicing process or programme. Automated invoice processing is an excellent choice, especially for those who are running a large, busy company. 

Cleardata is pleased to offer specialist document management services, including document storage, document scanning, RPA and other services that will enhance and reduce the amount of time it takes for you to process your invoices. A paperless office also helps when it comes to streamlining your invoice processing, which is something else that our experts at Cleardata can help you with. If you would like further information about the document management services we have available, then get in touch with a member of our friendly, professional team today – we’re always pleased to hear from you.