Electronic Invoicing: The Problems it Solves and How it Works
When companies are stuck in the era of paper invoicing, accounts payable departments are at a significant disadvantage. The invoicing process is slower, more difficult, and can have a turnaround time of weeks per invoice. Additionally, countless people handle each invoice, giving plenty of room for error.
The solution? Switching to an electronic invoicing solution
Electronic invoicing, also known as e-invoicing, is an automation solution that removes the need for paper invoices, supplier phone calls, and manual data entry. E-invoicing provides a way for your suppliers to key in and upload invoices via an online portal. Depending on how invoices are uploaded, they can also be automatically matched and routed to the appropriate users for approval.
What problems are solved by switching to electronic invoicing?
AP departments who do not make the switch to an accounts payable invoice automation solution are faced with a variety of problems every day that could easily be mitigated by switching to an e-invoicing solution.
Problems with Data Entry
Manually processing invoices is a lengthy process that involves verification, validation, and approval of the invoices before it can be paid. This takes time and staff resources that could be better utilized elsewhere. Making the switch to an accounts payable invoice automation solution can use an organization’s criteria to automatically approve invoices so there are no delays with payment.
Workflow process
A common problem among organizations of all sizes is lost or missing invoices – which ultimately lead to late fees or a ruined relationship with vendors. Paper invoices are physical items that either must be filed away for future payment, approved and paid immediately, or entered into an accounts payable software system. Each of these options leads to overall inefficiency when it comes to paying invoices. The solution to each of these previously mentioned problems is an AP automation solution.
How does it work?
E-invoicing improves supplier and customer relationships by significantly simplifying their invoice interactions. Suppliers submit their invoices through either FTP or online entry where they are submitted for review by both the supplier and customer – here, mistakes can be fixed in a matter of hours rather than the back-and-forth mailing game that paper invoices require. Edits are real time, and changes are tracked for further transparency.
The supplier is then given the option to be paid through ACH, credit card, virtual card, or check. Once the invoice is paid, it is sent to archiving where it is filed away electronically for safekeeping.
Electronic invoicing simplifies the invoicing process for suppliers and your accounts payable department. It also increases efficiency, productivity, control, and visibility, all while saving your company money. To learn more about how electronic invoicing could benefit your organization, fill out this form.