With the role of accounts payable (AP) expanding to include crucial responsibilities, such as vendor relations, spend optimization and identifying cost reductions, it is critical to improve the efficiency of this department. One means of achieving this is through automation of the invoice process.
Allowing AP departments to treat email, fax and print invoices like standard electronic documents, invoice automation solutions capture critical invoice data and transform it to payable postings. Not only does this eliminate the error-prone manual entry that damages vendor trust, but it also offers AP departments the opportunity to cultivate better AP practices.
Royal Brass & Hose is an ideal example of the value behind invoice automation solutions. A distributor of a large variety of products, the company serves numerous different sectors, including mining and transportation. However, with such a diverse customer base, it also works with thousands of vendors to stock more than 78,000 products. Before implementing an invoice automation solution, not only did Royal’s accounts payable team manage customer service, but it also tackled the arduous responsibility of keying in hundreds of invoices daily. Faced with this vast task, expensive mistakes were inevitably made, slowing payment cycles and risking both the company’s excellent reputation for customer service and its relationships with partner vendors.
Eliminating manual entry for invoice processing reduced transactional costs, improved purchase-to-payment cycles and helped staff reconcile purchase orders within seconds rather than hours through the ability to provide invoice line-item details. Most importantly, however, it allowed Royal’s AP team to liberate time to refocus onto more strategic priorities, such as spend analysis and vendor relations.
“We were really excited about the ability to stop relying on people to physically handle paperwork, which in turn would help us process orders and invoices faster—and with greater accuracy of information,” said Drew MacDonald, vice president, Royal Brass & Hose. “Thanks to our invoice automation solution’s ability to minimize the volume of tedious, repetitive tasks, we’ve created space to find new ways to add value to our business, so it’s a big victory.
Ultimately, implementing an invoice automation solution will not only accelerate payment cycles, but also improve customer service and vendor relations, ensuring the long-term viability of a company. With automation, companies can eliminate the inefficiencies of human interference, reduce transactional costs by 80 percent and move from invoice to payment more rapidly with 100 percent accuracy.Brent Halverson is president and CEO of ecmarket.
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