It’s a situation you’re probably familiar with: it’s the end of the month and your supplier sends you an invoice by post. It is then that the slow journey made by the incoming invoice through your company begins:

The paper-based invoice is logged in the accounts department, before moving on to the purchasing department to be checked. As it is an order for the marketing department, the buyer forwards it to the marketing assistant, who starts by checking its contents. The marketing assistant isn’t authorized to release it, though, and returns it to the purchasing department. After two further attempts, the invoice finally ends up with the responsible marketing manager, who is on vacation for two weeks. The invoice therefore remains on his desk until he returns to the office. Since the invoice is of a high value, it has to be signed off by the marketing manager. However, he is only in the office on Mondays, so the invoice spends another four days on his desk, before it can finally be returned to the accounts department for posting and archiving.

In the meantime, the early payment discount has, of course, long since elapsed, and a reminder has also arrived.

Unfortunately, this scenario is not uncommon and highlights just some of the developments that can beset the processing of incoming invoices:

Hurdles with the processing of incoming invoices

1. Undefined processes:

One of the most widespread reasons why the prompt processing of incoming invoices fails is the failure to define the processing process. This means that unnecessary idle times and extra loops are pretty much pre-programmed. To ensure a smooth process, it is a good idea to outline the path that an incoming invoice takes through the company and to provide it with the maximum processing times.

 

2. Responsibilities and authorizations that are unclear:

It is naturally the case that a process includes the definition of the responsibilities and authorizations. The team members who are authorized to issue releases must be named in each department. In this context, it is also important to define the maximum invoice totals that they are allowed to release, and to designate stand-ins during periods of vacation and sick leave.

 

3. Location dependency:

With the paper-based processing of invoices, it is especially the case that bigger companies that have more than one location rapidly face a problem: The paper invoice is located in the head office, but the employee with the release authorization works in a branch office. In such cases, a clearly-defined workflow also helps determine how the location-spanning release takes place.

 

4. Duplicate entries:

The multiple entry of incoming invoices is a problem that frequently occurs in the case of processing at several different locations. An especially unfavorable situation is one in which the duplicate entry is discovered too late and the invoice is inadvertently paid twice.

 

5. Lack of transparency:

In the event of queries, it is often the case that the processing status of the invoice is unclear or difficult to determine. A considerable amount of research work is often required to determine the department and/or the colleague with which the document is currently located. Things become particularly difficult if the invoice has accidentally ended up in the completely wrong department.

All these stumbling blocks ultimately lead to the processing of incoming invoices being unnecessarily delayed and money being wasted – and not just due to missed payment deadlines and unused discounts. In particular, the working time of the employees involved is also a cost factor that cannot be underestimated.

Even if all the processes are clearly defined, however, the problem remains that the employees must know what they are and comply with them. This can be a genuine challenge when dealing with a complex issue such as invoice processing, especially in bigger companies.

The solution: the digital processing of incoming invoices

Tools for the digital processing of invoices can provide a remedy. In comparison with paper-based processes, these software solutions have clear advantages.

The previously-defined release process is mapped digitally, and the invoice passes through all the responsible departments automatically. This automated workflow successfully prevents the invoice from inadvertently finding its way to an employee who is not responsible. This means that long idle times don’t stand a chance, among others, because stand-ins can be defined for staff absences.

The release of invoices on a location-spanning basis isn’t any problem in the digital processing process either. It allows duplicate entries to be avoided at the same time.
In the event of queries about the processing status of the incoming invoice, the answer is just a few clicks away: In the electronic incoming invoice software, it is quick and easy to see who has already approved the invoice and who is yet to process it.

The digital processing of incoming invoices is therefore significantly more transparent and efficient than the paper-based process, and offers significant cost and time savings. Invoices are paid on time, discounts can be used to optimum effect, and your employees have more time to focus on their core tasks.

Would you like to find out more about the electronic processing of invoices?

In our white paper, you will learn about how automated invoice processing can succeed, the specific savings potentials that are available, and how a software solution can help you comply with the statutory regulations.

Download it now for free!

White paper: Digital invoice processing - How to reduce costs, secure discounts and shorten processing times

Familiarize yourself with the topic of “digital incoming invoices” – learn more about how automated incoming invoice processing works, find out about advantages, legal requirements, future-proof invoice formats and much more.

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EASY SOFTWARE develops software solutions and actively drive the digital transformation for efficient, secure and mobile work with digital business processes. EASY integrates these into existing IT infrastructures and generates sustainable added value. This makes digitization a quick and easy experience for their customers.
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