COVID-19 Fraud Prevention: The Benefits of an Invoice Tracking System
As a business grows over time, even the most organized individuals will have trouble keeping everything in order. In the beginning, it may seem smart to save money and track everything related to bookkeeping in Microsoft Excel spreadsheets or a notebook. But as time goes on, the data piles up and isn’t being put to work for you. The bigger the information pile gets, and the more processes are still handled manually, the greater the potential for costly errors. Add in an external event like the current COVID-19 crisis, and you could be exposing your company to needless risk that it can ill afford when budgets tighten, fraud increases, and supply lines falter.
Companies large and small across the world continue to be bogged down with manual and complex processes for managing their supplier payments which increases average invoice processing cost. According to research by the Institute of Financial Operations, on average, half of invoices are still received on paper. 37% come by email as PDF files, and 5% are received by fax. Another report suggests 58% of organizations in North America still lack any kind of invoice workflow automation—a percentage that dips even lower outside of the United States and European Union. With staff working from home or under lockdown during the coronavirus pandemic, these conditions set the stage for massive, productivity-crushing logjams and gaps in your company’s supply chain that can be readily exploited by opportunistic fraudsters.
An effective and comprehensive invoice tracking system can help businesses maintain their productivity and profitability, even in times of crisis. Even if you’re already using basic accounting software like Freshbooks, it may not have the security and versatility necessary to fully reap the benefits of process automation. Small businesses often rely on tools like this for time tracking and expense tracking for better project management, but as companies grow—or market conditions take a sudden downturn due to disaster, disease, or war—moving to a more robust solution may be the best choice for companies looking to protect themselves against lost value and increased risk.
The Benefits of an Invoice Tracking System
Everything’s Organized in a Central Location
An invoice tracking system puts all of the invoices for your organization in a central location so you know exactly where to go to find a record of what it is you’re looking for. Because it’s all digital, there’s no need to store a paper copy in a filing cabinet somewhere. That reduces errors and the likelihood that invoices will go missing.
You can start with a basic invoice template that feeds into the invoice tracker to make it easier to manage everything, regardless of how many new invoices come in and how often. It’s even possible to set up automatic payment reminders to ensure the accounts payable team doesn’t overlook a fixed bill every month.
Centralized data management also helps guard against rogue spending and invoice and supplier fraud. Total transparency means those looking to take advantage of overworked staff or undocumented processes will find their ambitions thwarted rather than rewarded.
Faster Invoice Processing
For many accounts payable departments, long processing times is an issue. The longer it takes the AP department to process an invoice, the higher the cost per invoice becomes. You’ll pay additional fees once a sales invoice goes past due. If the issue isn’t resolved quickly, you’ll run into recurring vendor payment issues, which no doubt strains the supplier relationship.
With the appropriate invoice tracking system, the AP team can process things faster than they would without one. They have the freedom to work with whatever payment gateways vendors provide, whether they are making credit card payments through PayPal to freelancers, or paying a custom invoice. Accounts receivable can also set up various payment gateways to make it easier for your customers to make online payments to you.
This is of particular importance during a crisis such as the COVID-19 pandemic, when minimizing waste (automating workflows and eliminating costly errors) and maximizing savings (e.g., capturing early-payment discounts) is as important to a company’s survival as protecting revenue.
“With faster invoice processing, you’ll achieve lower costs per invoice and decrease your error rate, which is crucial for small business owners working with tight budget constraints.”
Real-Time Visibility into Invoice Processing
Without an invoice tracking system, invoice reporting becomes complex, time-consuming, and has a great deal of error potential. One of the biggest advantages to an inventory management system is the fact automated invoice management systems allow managers to quickly view analytics reports in real time for a look at invoice volume, status, and any process bottlenecks.
Many invoice management solutions come with a variety of built-in reports, including productivity reports, overdue payables, audit reports, cash discount forecasts, etc.
Getting paid matters, too, of course—and not just during a public health crisis. Invoicing software makes it easy to create invoices, fully customizable based on your needs. Real-time visibility makes it easy to see which invoices have partial payments or late payments, and to check to see what’s upcoming based on due date.
Quicker Invoice Approval
An invoice tracking system that also includes invoice management features can dramatically increase approval time for both purchase order and non-purchase order invoices. Once invoices are digitized, the associated metadata is embedded within the workflow, and t a chart-of-authority for employee approval data is created to follow pre-defined business rules, invoices can be routed automatically to the appropriate employees. They can also be automatically approved, depending on the rules and thresholds established.
For instance, if a non-PO vendor invoice for business travel comes into the invoice system, the automated workflow will determine the validity of the invoice with automatic cross-checks, as well as whether the supervisor can approve the reimbursement amount. If the invoice is valid and the supervisor has the authority, it will route the work item to them for review and approval. If the supervisor does not have the authority, or the invoice is not valid, the workflow routes it to another senior professional for a closer look and either disposal, modification, or rejection.
Faster Reconciling of Purchase Orders
An automated invoice tracking system can relieve the hassle of reconciling supplier invoices with purchase orders, credit memos, and delivery receipts. OCR technology decreases the amount of time required to track down missing invoices, shipping orders, good receipts and so on. the system can send alerts to flag fraudulent invoices, incorrect pricing, and any other issues that require human intervention.
Invoice tracking is only one piece of the accounting puzzle. To maximize efficiency and profit potential, it’s even better to invest in a procure-to-pay (P2P) solution. This way, everything you request from vendors is tracked from the initial purchase requisition all the way through invoice payment. With this approach, you never have to worry about paying invoices for goods you did not receive, or duplicating payments. It’s also possible to use automation throughout the process to speed things up all around.
With the global economy wracked with uncertainty due to the coronavirus and risk management becoming an increasingly complex endeavour, process automation brings a much-needed boost to security and risk reduction. Just as businesses and individuals are isolating themselves to combat the virus, creating a closed and secure P2P process helps your business guard against invoice fraud, rogue spend, and other potentially disastrous risk vectors during a time you can least afford to waste precious resources or lose money.
Using a procure-to-pay system automates the majority of the unproductive and costly steps throughout invoice processing such as manual data entry, GL coding, approval rating, and matching. Implementing invoice Management in the cloud means that organizations can not only streamline their processes but improve cash flow, strengthen supplier relationships, increase employee productivity and efficiency, and lower their processing cost. The lower processing cost helps offset the subscription for the software-as-a-service which is a fixed and predictable operating expense.
Research by Ardent Partners shows that organizations can reduce their invoice processing costs by up to 70% using automation. An Aberdeen group report suggests that automation can reduce invoice processing days from 20.8 to 3.8 and can increase the number of invoices handled from 100 invoices per employee per day to 3,000.
Automate, Track, and Optimize Your Invoice Processes
While an invoice tracking system is a smart start, investing in a fully automated purchase-to-pay solution like PLANERGY can provide even more benefits compared to a basic invoice tracking system alone. Best of all, you can take care of everything on the go. Because our platform works on the mobile web, there’s no need for a dedicated mobile app for Android or Mac devices. As long as you have an internet connection available, you can access it.
PLANERGY makes AP Automation and tracking invoices easy.