.png "7 Benefits Of Invoice Automation + How To Do It (2023)")
Businesses will increasingly leverage the shift to automated work processes like invoice automation as digitalization continues to soar. This account payable process allows you to streamline your cash flow and improve financial data accuracy minus the errors of manual handling. With invoice automation benefits, your business will increase efficiency and save costs.
Many have seen how valuable invoice automation is in speeding up the accounts payable process. Not only does it save tons of time, but it also fosters better relationships with stakeholders.
In this article, we'll go through the 5 core invoice automation benefits for modern businesses and a step-by-step guide to setting up this type of technology in your industry. Ultimately, you'll have a well-rounded idea of what to look for in an invoice automation tool and how to optimize it based on your specific business requirements.
Let's start.
7 Invoice Automation Benefits For Businesses In 2023
Invoice automation streamlines the accounts payable process. Automated technology can do wonders for businesses, especially given the current trend in digital workflows.
More than that, its capabilities continually improve, making it a worthy investment for any company. Large or small, invoice automation proves to be a valuable asset for business operations.
Here are the 5 main benefits of invoice automation for businesses in 2023:
1. Reduce Manual Entry Errors
Manual invoice processing is rife with human error. To mitigate that risk, invoice automation will ensure accuracy, eliminating the worry about manual errors. The advantage of invoice automation software is that it has built-in features that automatically double-check data accuracy.
How does the software do that? It uses sophisticated algorithms to automatically scan through data and flag any potential errors or discrepancies. These features ensure your data stays consistent and reliable throughout the system, something manual invoice processing cannot match.
Invoice automation also streamlines core processes like:
- Tracking
- Validation
- Processing
- Invoice creation
Hence eliminating human error in manual processing. Even minor manual errors can cost businesses time, money, and resources if not quickly spotted.
This also means it lessens the risk of human error in conducting repetitive tasks in the accounts payable process so you can meet deadlines and maintain relationships with customers or vendors.
2. Saves Time & Resources
Since invoice automation eliminates most manual input tasks, labor costs drop significantly. Thus, the accounts payable process will require significantly fewer labor hours and labor costs.
Depending on the size of your business, labor cost savings can range from a few hundred to even thousands of dollars in labor saved per year.
Invoice processing tasks like data entry, sorting, and validation require a lot of time. Automation significantly reduces employee hours on the accounts payable processes while improving overall employee productivity.
Another aspect that sees significant savings is the cost of storage. Larger businesses often process hundreds of invoices per month, accumulating tons of physical invoices and needing storage for future reference. The storage costs of paper invoice systems add up over time, making it a pain to deal with financially, especially for a growing business.
Switching to digital invoice automation, businesses can easily keep digital archives of all invoice data securely stored in the cloud so even if an internet internet outage occurs or a fire breaks out, all financial documents are safe. Moreover, this data is aggregated in one location, saving time and simplifying the accounts payable process.
Coupled with the right database management solution, you can rest easy knowing all your essential vendor information is readily available and easily searchable when needed. Together, these tools keep everything organized, efficient, and manageable for financial teams, especially those handling hundreds of invoices.
3. Improved Data Security & Compliance
Invoice automation also ensures compliance with industry standards. It utilizes audit trails to track any changes made to invoice data. In turn, you can ensure the accuracy and security of your financial statements at all times. Just make sure all business-related software you use doesn’t risk a breach in the system especially if you use sharing solutions like an internet sharing program for passive income.
These audit trails also ensure that all changes made to data or documents are traceable and can be quickly retrieved. Higher financial document security translates to fewer fraudulent invoices that rank up costs for your business. Financial improvements then allow you to use resources more decisively on other investments.
Additionally, accuracy in business finance makes for more informed decisions to optimize the accounts payable process and improve overall business performance. Invoice automation also provides access to better-quality data for analytics, allowing you to have a clearer picture of your financial performance.
Combining accuracy with the ability to track changes, you can use invoice automation for better compliance and financial reporting. This way, you remain compliant with industry regulations and stay on top of regulatory changes.
4. Improved Cash Flow & Risk Management
Financial systems like invoice automation also help you gain more control over your cash flow by giving you complete visibility into the entire accounts payable lifecycle. For example, the visibility of incoming invoices allows you to manage invoice payments more effectively.
Moreover, invoice automation may require a MongoDB or MySQL change data capture, where users can extract, transform, and load essential information in one location. This ETL process mitigates risks associated with manual invoice processing and streamlines the whole process especially when working with different data sources to make the finance department's invoice approval process more efficient.
These timely invoice payments and invoice processing times, make it possible to avail of early payment discounts that vendors and suppliers release. Adding it all together, the savings pile up to quite a large sum for businesses.
5. Enhanced Customer & Vendor Relationships
Lastly, invoice automation helps improve customer and vendor relationships by providing seamless communication between all parties involved in the accounts payable process.
Instead of becoming a tedious task for vendors and customers, the automated process makes the whole thing strategic by eliminating potential delays in receiving payments. In business, a slight delay can snowball into late payments, stopping companies' cash flow for development and innovation.
Invoice automation allows for faster payment processing time so that vendors can get paid quicker and customers can get their orders faster. The improved communication also reduces the likelihood of misunderstandings or disputes between parties, which can help maintain better relationships over time.
In addition, automated invoice processes contribute to better vendor relationships by allowing companies to integrate the software with other team productivity software.
These benefits make the process a strategic task that significantly reduces the cost per invoice and brings in thousands in savings you can use for further plans instead of essential functions. Considering these benefits, you’d likely want to get your hands on this solution as soon as possible, so here’s how you can implement it for your business.
6. Integrates With Other Systems
When your invoice automation software integrates with your CRM, it can automatically pull in customer details and sales information. This means your invoices always have the correct details, and there's no need for anyone to manually input this information, which saves time and reduces errors.
When your invoice automation software talks to your accounting software, the benefits are even more clear. As soon as you issue an invoice, this information can be automatically updated in your accounts, keeping everything in sync. This eliminates the need for double data entry, which not only saves time but also ensures better accuracy in your financial reports.
Similarly, if you're running an ERP system that manages your inventory, orders, and supply chain, the integrated invoice automation software can instantly update your inventory as soon as a product is sold and an invoice is issued. This real-time update provides accurate inventory levels and aids in efficient supply chain management.
7. Reporting & Analytics
Do you know how a GPS helps you navigate and make sense of the road when you're driving? Well, think of analytics and reporting in invoice automation as your business GPS. It's what helps you understand where your business stands and where it's headed in terms of financial performance.
Invoice automation solutions come packed with analytics and reporting tools that generate detailed and insightful data about your invoicing process. This isn't just a pile of numbers; it's a roadmap that can guide your business decisions.
For instance, say you've noticed that some of your invoices are taking longer to get paid than others. You might wonder: "Why is this happening?" With robust analytics, you can dig deep and identify trends or patterns. Maybe those late payments are coming mostly from a particular group of clients or during certain times of the year.
Knowing this, you can then adjust your strategies accordingly. You might decide to enforce stricter payment terms or offer early payment discounts. Or maybe you realize it's time to have a chat with those clients about their payment habits.
Additionally, these reporting tools can provide an overview of your overall cash flow and business health. They can alert you to any bottlenecks in your invoicing process that might be hindering your cash flow. It's like a health check-up but for your business's finances!
The cherry on top is that most of these reports can be generated with just a few clicks, saving you from the tedious task of manually combing through data.
So, in a nutshell, analytics and reporting in invoice automation give you the insight to understand your business better, make data-driven decisions, and ultimately steer your business toward more profitability and growth. And who wouldn't want that, right?
How To Implement Invoice Automation In Your Business
Now that you know the benefits of invoice automation, the next step is to figure out how to implement it in your business. Depending on the size of your company and the complexity of its accounts payable process, there are a few different ways for implementing invoice automation.
Below are the steps you should follow to implement invoice automation in your business:
I. Analyze Your Current Processes & Identify The Best Solution
Do a business assessment and carefully analyze your current processes and identify which solution would best fit the needs of your business. Companies processing a large volume of invoices should look into enterprise resource planning to accommodate the demand.
To start, think about the type of data you need to collect, the number of invoices you need to process, and the time it takes for each task. This will help you decide whether a cloud-based solution or an outsourcing vendor is the right fit for your business.
An enterprise resource planning solution can process thousands of invoices while maintaining organization and due process. Even small eCommerce businesses like this online lingerie shop do well to find a provider that eliminates the tedious tasks or pain points financial departments face. These pain points include tasks like manual input and processing received payments.
The ideal software will address the specific issues a business faces. It will also allow for customization and streamlined template creation to fit business needs and address the precise payment options necessary for smooth transactions.
After choosing the right invoice automation solution, you can set up rules and define workflows to help streamline processes and ensure accuracy. For example, as part of an automated notification workflow, alerting vendors of sent, paid, and updated invoices becomes easier as financial teams can accomplish everything on one system.
When defining automation rules and workflows, companies should consider specific requirements. Otherwise, the wrong software will lead to more issues in workflow and automation, rather than addressing them.
The right invoice workflow is also important for finance teams to track payment processes accurately and file invoices correctly. Businesses can automate the invoicing process by setting specific rules for payments. Additionally, finance teams can delegate when invoices are due and define the format of invoices.
These features help to automate invoicing tasks, ensuring they are sent out accurately and on time.
II. Implement The Solution & Train Your Team
Once you've identified the best invoice automation solution for your business, it's time to implement it and get your team up to speed. First, make sure everyone understands how the new system works and gets the proper training on its use.
In some cases, the chosen software will come with a training guide or give access to knowledge management solutions teams can use as their main resource in learning the ins and outs of the program. Companies who invest in training their employees in applicable skill sets tend to see more efficient workflow than those who don’t.
Training your finance team on the most optimal way to use a chosen software hastens the learning curb season and aids them in getting their tasks done at an efficient rate. With proper training in payable automation solutions, employees should find it easier to get through a payment cycle without any significant issues arising.
This also makes it possible to hire overseas talent so you can lessen the overhead costs of onsite workers and take advantage of the lower salary rates of remote employees. Even if they have to closely collaborate with other departments, automation keeps the invoice automation process streamlined.
Lastly, the streamlined workflow contributes to less burnout, which companies can use to leverage employee retention plans.
III. Monitor & Track Performance
The last step is to monitor and track the performance of your invoice automation solution. In addition to identifying areas for improvement, you'll learn how much time and money the solution saves you.
Monitoring and tracking performance when implementing invoice processing software will make identifying inefficient processes easier. In addition, these performance checks alert you to discrepancies in data entry and ensure the timely delivery of invoices to each respective vendor.
All of this makes for a smoother workflow and a better customer-to-vendor experience especially when working for output-based services like working with a link-building solution. Processing payments with automated systems can also help businesses save time and money in ensuring financial accuracy. Accuracy in finance is essential, as it will ensure that companies have balanced budgets and can present accurate figures to stakeholders.
Conclusion
Invoice automation is quickly becoming a must-have for businesses of all sizes because of its financial benefits. It helps streamline and optimize invoice processing, saving time, reducing costs, improving data accuracy, and increasing compliance.
Business process automation solutions provide the tools to set up automated templates, define rules and workflows, implement solutions, and track performance. The key features make it easier for businesses to manage manual invoicing processes.
But invoice automation is just one instrument to your business orchestra. You’ll need other automation solutions to streamline your full workflow. Want to know what other solutions you can add to the pack? Check out our list of business software and get in touch with us to help you identify the best solutions to invest in.
