Save time and money with fully-automated invoice processing
Business processes are often at the top of the action list when a new leader joins a business. As I’m sure Marks and Spencer’s new CEO David Rowe is thinking now, just as our CEO Richard Hurwitz was when he joined last year, how does one go about improving the nuts and bolts of the way a business works?
With a new book from Harvard professor Amy Cuddy demonstrating how power posing can deliver compelling results, perhaps top of the list might be a weekly yoga session to fine tune The Warrior. Next might come a move to ban emails, with people working under an email-heavy regime proven to suffer more from stress and anxiety, and replace it with a time management tool such as Wunderlist.
These are just two examples of changes to existing systems that could deliver big results. Another example is e-invoicing.
We work with paper invoices every day, and we know that the act of producing such an invoice is a waste of time. Not only that, it is a waste of money. The document gets produced – this takes time – it then gets sent by post (more time and money) or emailed (less money, but still a time consuming job for somebody). At the other end, that document needs to be entered into the receiving company’s digital records (more waste) before it can be processed.
What is possible, however, and what we offer our clients, is touch-free, fully-automated invoice processing. The supplier digitally provides details of the work or goods they want paying for. This is immediately received by the buyer and if genuine is automatically validated or flagged otherwise. Payment terms start. No documents, no fuss.
According to recent figures from a Europe-wide study, by fully automating the invoicing process the cost per invoice compared with following a paper trail is reduced by at least €6.60. Where does this saving come from?
A significant sum is simply the cost of the stamp and envelope, but for sent invoices the cost of payment reminders, remittance and cash management, and archiving, is greatly reduced. The highest cost to suppliers, however, often comes from the time involved in chasing customers to check they have received and are processing their invoice, and to find when they will get paid. For received invoices, cost savings come from using technology to simplify the codification, validation and matching, dispute management, payment and cash management, and archiving.
Many businesses now accept scanned invoices or scan invoices themselves and consider this to be as far as they need to go, especially as Optical Character Resolution (OCR) can be used to part-automate the process by enabling a computer to recognise the invoice details involved. But, this method effectively comes with similar associated costs to a paper invoice, as it doesn’t remove the work processes themselves, and has been shown to need a high level of intervention for corrections; no real efficiencies are created.
With any change, however, comes a sense of unsettlement. This is understandable, and something we help our customers with every day.
Interestingly, we find invoices to be a highly emotive item. You might think that the function of an invoice – a document that ensures you get paid – is simple. You would be right. But what that document represents is so much more. Invoices put into black and white the hard graft, detailed thought and lengths of time that businesses themselves put in.
So for businesses to understand that that document doesn’t even need to exist, that the whole thing can be done digitally, can initially cause some alarm. Invoices are safe, cuddly documents that keep the cash flowing, aren’t they? Why would anyone want to change that? If you take a look at the time it takes a business to process invoices, you’d soon realise that by scrapping them you could easily afford to provide employees with a free lunchtime yoga session once a month.
About the author
Ruud van Hilten
As Tungsten’s Senior Vice President of Sales, I am responsible for growing Tungsten into new territories and delivering new customers and partners to the business. I'm proud to work with Tungsten for its truly multicultural character and the commitment of our team.