Invoice automation is growing in popularity because of its ability to cut costs, but the technology is equally valuable as a way to save time.
It may have taken awhile, but electronic invoicing has finally reached mainstream status.
So what has driven invoice automation's rise in popularity? As with most technological innovations, the potential to cut down on operating costs is , according to a recent survey by PayStream Advisors. Late fees, lost files, angry clients and other related issues have led to increased expenditures that any company would hope to avoid.
But another major problem is .
Report - Invoice automation reduces payment cycles by about 75 percent
"Somebody in Germany would receive an invoice in the mail or email, print it out, write the general ledger codes on the invoice, have somebody sign it saying it was approved, scan it and send it in an email to the Tampa office where they would print it out again," said Mark Fox, project manager at World Triathlon Corporation (WTC). He said that this could take up to six weeks to complete, as WTC's Tampa Bay office could only process between 20 and 30 invoices per day.
The PayStream report found that achieved an 84 percent adoption rate in 2012, with more than a quarter of respondents hoping to have streamlined 75 percent of these processes by the end of the year.
Worth the hype?
While cutting costs was found to be the top motivator for e-invoicing implementation, saving time didn't rank far behind. More than half of respondents, for instance, cited a desire to decrease their companies' procure-to-pay cycles as the reason for deploying .
Whenever a new technology reaches the market, it always receives a plethora of hype. Oftentimes, however, these innovations fail to meet many of those goals.
So what is the scoop with electronic invoicing? Is it legit, or is it just another in a long list of overrated inventions?
If a recent study from Corcentric is any indication, invoice automation is the real deal. The report found companies that incorporate best practices for their accounts payables activities achieve in the time is takes to process an invoice.
Fox said that WTC has experienced similar improvements after implementing , noting that "a 45- to 60-day payment time is down to less than 15 days." This has benefited both the company's clients and its accounting department.
James Carruthers, vice president of operational finance at WTC, said, "We have moved from being constantly backed up and under pressure to being proactive and looking at adding additional duties to the accounts payable team to help fill their days."
Other benefits of invoice automation
Reducing the time of payment cycles leads to a number of advantages, both directly and indirectly.
But what about cutting costs, which is the main reason respondents to the PayStream survey said they're adopting e-invoicing processes? Fox said his company has seen that benefit come to fruition, too.
Manual processes used to cost WTC between $30 and $40 per transaction. That number has since been reduced to between $2 and $3, a 15 to 20 percent decline.
In addition, WTC employees are able to process 12 to 15 times as many invoices per day compared to before, allowing them to allocate more time toward other activities. There are many more benefits of invoice automation, !
by PaperSave
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