Much has been written about the errors made at this year’s Academy Awards and before that, the 2015 Miss Universe Awards. Behind the scenes, in accounts payable, errors and exceptions are a way of life for organizations that continue to rely on people and paper to process invoices. The consequences, however, go far beyond reading the wrong name at an awards ceremony.
There’s the impact on productivity, where it can take weeks to capture and approve a paper invoice for payment. As the delay drags on, so do the costs, and this can have a negative effect on working capital.
Which begs the question: how can a broken invoices process impact working capital?
That was addressed in a report, Working Capital Management: The Missing Link in Payables and P2P, recently published by sharedserviceslink, the community for leaders in shared services. Based on a survey of more than 150 finance and shared services professionals, the report stated that manual invoice processing was the sources of many problems, and 80% of respondents cited invoice exceptions as a major pain point.
As the report explains, electronic invoicing is a valuable tool not only to streamline invoice processing, but to improve management of payables, cash, and working capital. Here are a few benefits enabled by invoice automation that are often overlooked:
- Providing suppliers with early-payment discount options to accelerate their cash flow
- Expanding these opportunities with sliding-scale, dynamic discounts, up to the due date of the invoice
- Adding a supply chain finance program to provide early-payment options to suppliers without using your own cash
- Enabling next-generation electronic payments, linking payments with detailed remittance and related transaction documents
So when it comes to processing invoices, don’t ask your suppliers for the envelope, please. Instead, direct them to an electronic process. Even your treasurer will thank you.
For more insights, read this complimentary report by sharedserviceslink, the community for leaders in shared services: Working Capital Management: The Missing Link in Payables and P2P.