Paperwork: the crux of all businesses everywhere.
Even with modern updates to document management systems, it's still a large part of business operations accompanied by the most headaches. When it comes to invoice processing especially, there's often a lack of accountability. Traditionally, as soon as an invoice is handed off, it becomes the responsibility of the person whose desk it falls on. Although this is a common way of dealing with this important business task, there are ways to better your invoice processing once and for all.
Software as a Document Management Solution
Document management software gives us control of the invoice process, and much more. The top three processes document management workflows automate in today’s business environment are:
- Invoice approvals
- Hiring process
- Corporate credit card approvals
But their capabilities can improve many more processes, including but not limited to standard operating procedures, quality management, order processing and PTO requests. As an example, let’s dive into invoice processing for a closer look:
Traditionally, invoice processing has been primarily paper-based. They are commonly received via US mail or email, and printed for processing. As invoices get opened, they need to be distributed to the appropriate manager for approval and execution. This typically means they get placed in mailboxes or on desks, often with no communication involved on the desirable outcome.
Work from anywhere
At this point, the invoice easily gets buried and/or lost in the paper shuffle that we all know too well in traditional office settings. It could sit for hours, days, weeks or even get misplaced entirely. Add current workplace trends affected by social distancing mandates and entire office workflow and operations are different. Maybe your entire team is managing day-to-day operations from afar.
The real trouble with traditional invoice processing is the process lacks true traceability. It's difficult, if not impossible, to determine who has what invoice, when using a paper-based process.
Other things that can and do go wrong:
- Invoice gets passed to the wrong manager
- Delays cause you to pay invoices late
- Invoice is misplaced (and not paid at all)
- Information within invoices are confusing or inaccurate
Invoice processing via this traditional route typically takes about a week. However, it isn’t uncommon for it to take upwards of 3-4 weeks. Not only is this inefficient, but it becomes extremely difficult to manage and meet early payment incentives (i.e. pay by said date and receive a 10% discount, meet deadline for accounting practices, etc.).
Document Tracking Made SImple
Through document management software (M-Files will be used as our example throughout) many of the manual processes can be automated, and the issues caused by the lack of traceability in the paper-based method are eliminated.
Though your invoices will be sent to you in the same way, what happens to them afterward changes entirely. All paper invoices are scanned into the system and any electronic invoices should be directed to a dedicated inbox (i.e. email@example.com) which will be monitored, filtered and routed by M-Files.
After the invoice and appropriate data is captured within M-Files, the approving manager can be selected. Once selected, an email notification will be sent alerting them of the invoice needing approval and their time allotted for review. From this point, M-Files can trigger additional notifications to be sent to managers or accounts payable as invoices get approved or if they are sitting for too long on one “desk”—whether physical or remote.
When the manager or approving party accepts the invoice, it automatically routes back to Accounts Payable for processing. From start to finish, the entire invoice approval process, via a document management workflow, typically takes one to three days rather than a week using a paper-based method.
Benefits of Document Management
This breakdown of the invoice approval process barely scratches the surface of the major steps defined for this workflow.
Within document management software, the capabilities are limitless. For example, in one screen you can see what invoices are yet to be approved, which ones are late and where each sits within the workflow. Or, if a manager is out of the office, an admin can note this within the software and reassign their invoices while he/she is out. Additionally, the reporting features enable you to determine where bottlenecks are, which managers take the most time to approve invoices, average amount of time it takes for invoices to be processed across the company or by a certain manager and much more.
The efficiencies and cost savings that document management can provide are tremendous. Many companies discover additional benefits of document management after they begin using the software. To begin exploring the opportunities for your organization, request a consultation with a document management specialist.
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