Streamlining AP with an Invoice Processing Platform
Even in a highly-evolved time technologically, many vendors might still be sending paper invoices. The good news: From the moment an invoice reaches a company, in whatever form it’s in, that business can use an invoice processing platform to ensure seamless payment.
In this post we’ll talk about why it makes sense for any company that’s been holding out – or just unaware of the need for them – to switch to a platform that can assist in processing invoices. We’ll explore the basics of how these cloud-based, increasingly AI-oriented solutions work. We’ll look at a few of the major benefits. And we’ll review what a company can expect during implementation.
Join us as we explore why using an invoice processing platform makes for a better way to do accounts payable.
Invoice Processing Platform Basics
Whether cloud-based (which many of the best AP automation software solutions are these days) or served on-premises, invoice processing platforms should be intuitive and easy to use. And, at a minimum, they should be able to handle the following functions:
Automated Invoice Receipt, Data Entry, and Review
Work with an invoice processing platform typically begins when an invoice arrives. This generally happens one of two ways.
The supplier emails an invoice to a dedicated address for vendor bills. The invoice processing platform uses AI and machine learning to extract data from the email.
Worst-case – and this is still common – the supplier sends a paper invoice. It’s a slow and inefficient invoice management process, though with an invoice processing platform at least, things start to speed up once the bill arrives. The software uses optical character recognition (OCR) tools to extract data from paper invoices and get them into accounting systems.
AI and machine learning within invoice processing platform solutions also helps with data review, able to flag and handle basic invoice exceptions that would typically require a human to review.
Customizable Workflows Route Invoices Efficiently
Companies that process invoices manually can face long waits for approval, as seen in theAP Now “Common Invoice Problems: How to Deal with Them” white paper. The white paper notes that 72% of survey respondents cited slow internal invoice approval as an issue they experience on a regular basis. In fact, it was the most popularly-cited issue.
“When invoices are sent out for approval in a paper world, accounts payable does not always know if someone is out on vacation, out unexpectedly or is just not bothering to review the invoices sent,” the study notes. “There is no good solution to this problem in a paper world.”
With an invoice processing platform, though, approval workflows help invoices go wherever they need to. Should an approver be out of the office, the invoice can route to another approver. There aren’t the quagmires of a paper-based process, where an invoice can get lost on someone’s desk.
Easy Invoice Payment Within the Platform
Stampli has been helping lead innovation in the payments space, introducing Stampli Direct Pay to allow companies to pay their invoices directly from their AP automation software. It’s a divergence from other AP automation solutions, which sometimes require companies to go elsewhere to pay an invoice once they’ve processed it or lock them into only being able to pay on AP platform.
Stampli Direct Pay allows companies to pay their bills in whichever manner they’re comfortable, recognizing that while there’s been a trend away from paper checks in recent years, they remain popular. A 2021 survey report that Stampli collaborated on with Treasury Webinars, “How & Why Companies Choose Payment Types” found that 36% of companies preferred to pay suppliers by credit card, 30% preferred check, 24% preferred the automated clearing house (ACH), 4% virtual or ghost cards, and 5% had no preference highlighting the continuing diversity in preferred B2B payment types for most companies.
3 Benefits of Switching to an Invoice Processing Platform
There are all sorts of benefits to implementing an invoice processing platform, from improved morale among accounting staff to streamlined processing which can eliminate vendors peppering staff with calls and emails wondering where their payment is. Let’s explore a few of the main benefits.
Faster Invoice Approvals – and More Cost-Effective, Too
A 2021 survey report that Stampli commissioned with Treasury Webinars, “The How, the Why and the ROI of AP Automation” asked 418 respondents about AP automation’s benefits. The most popular answer? Faster invoice approval, according to 57% of respondents.
Getting an invoice processing solution can also lead to lower invoice processing costs, cited by 36% of respondents in the report. How much savings? Estimates vary according to different sources online, though Stampli has noted that automation can save companies as much as $26.50 per invoice.
Lower Chances of Duplicate Invoices and Fraud
The average company might get hundreds of invoices per month, but this doesn’t necessarily mean they’re all unique. Stampli found that 27% of participants in a report conducted with AP Now stated “they are getting more than 25% of their invoices multiple times.” And a full 6% get more than three-quarters of their invoices multiple times.
It can happen for different reasons. Sometimes vendors forget they sent an invoice or are anxious that an invoice went through. Other times, they’ll realize they neglected to include a key invoice detail after sending their bill. And then there are those sad characters who hope that a duplicate invoice might get paid – the Northwest Territories Royal Canadian Mounted Police even fell victim to a scam involving this in October 2020.
But companies have options to avoid dupes with Stampli and AP Now noting “The problem (of duplicate invoices) is greatly reduced if you use a portal for receipt of invoices or some sort of third (party) invoice automation. For if a vendor were to routinely submit duplicate copies of an invoice through one of those mechanisms, there could be cause for fraud accusations.”
Easier to Collect Early Payment Discounts from Vendors
Another of the major invoice-related problems that companies experience is missing out on early payment discounts, according to 23% of respondents in the previously cited survey.
“Early payment discounts, as our readers are well aware, represent a goldmine for their organizations,” the white paper noted. “Conversely the suppliers who offer them, mainly because it’s been part of their business model for decades would love to get rid of them. While most don’t go out of their way to openly sabotage your chances of earning these attractive discounts, they don’t do anything to make it easier for you either.”
Invoice processing platforms can make it easier, though, to nab early payment discounts, slashing approval times dramatically enough that companies can easily land within the necessary windows. The reward? Discounts that can run 1% to 3% of totals owed.
Implementing an Invoice Processing Platform: How to Prepare
Preparing to implement an AP automation platform might sound daunting — and with the wrong partner, it can be. Work with a skilled and knowledgeable AP automation partner, however, and the process can be up and running in a snap.
Implementation Might Take Time – But It Doesn’t Have To Take Too Much
Stampli noted some sobering stats in that 2021 survey report conducted with Treasury Webinars. The study found that of those respondents who had already adopted an AP Automation solution, the majority of participants in the survey had implementation times exceeding three months, despite “the fact that market solutions currently exist which fulfill customer set-ups in less than a day.”
The reason for this? Besides the possibility that companies may have been creating customized technological solutions in-house and on-premises, companies may also not have been aware of alternative market solutions with fast implementation times. For example, AP automation partners such as Stampli can deliver tried and true software-as-a-service (SaaS) platforms remotely in as little as 24 hours, with dedicated technical assistance for an easy setup.
You Don’t Need to Switch ERP Systems with Stampli
It’s a big decision when a company invests in ERP, or enterprise resource planning software, which can be pricey, tricky to implement, and generally kept in use for several years thereafter. And when all is said and done, one of the drawbacks is that certain applications, including some invoice processing platforms, don’t work seamlessly with all ERP platforms.
This is not the case with Stampli, though, which is highly versatile and designed to plug right in with a variety of ERP systems, including Microsoft Dynamics, Oracle, Oracle NetSuite, Sage Intacct, and SAP. Businesses can keep right on using whatever ERP system they have. Meanwhile, Stampli will help to maximize the investment by performing accounting functions ERP systems don’t do optimally and by providing cleaner data for general ledgers, which are often housed within these systems.
Stampli is built to scale with companies as they enter and progress through the middle of the market, hopefully eventually becoming enterprise-level firms with north of 1,000 employees. Should these companies opt for an invoice processing platform like Stampli, they’ll find an AP automation partner that can respond to their business needs and remain viable for use for the long haul.
Process invoices. Don’t let paper invoices process you. Try Stampli today.
