Paperwork Is Top Drain on Time, Cause of Errors for AP Pros 

Even businesses that have entirely digitized their consumer-facing operations may still have work to do in transforming their business-to-business (B2B) processes.

One of the most critical business functions in need of digitization is invoicing. While larger corporations have invested in electronic invoicing technology, most small and medium-sized businesses (SMBs) are still processing paper-based or PDF invoices.

That means their invoicing involves hours of manual labor in a paper-laden process, and accounts payable (AP) professionals spend time on tasks that could and should be automated. These include typing invoice data, correcting typos and responding to supplier inquiries.

Coping with Errors, Delays 

AP pros say manual systems are a main cause of errors and delays, according to the “AP Automation Tracker,” a PYMNTS and Beanworks collaboration.

Get the report: AP Automation Tracker

Eighty-eight percent of AP professionals blame the preponderance of payment errors on manual systems, and two out of three say that long working hours are the result, according to a Beanworks survey cited in the report.

All the time spent on processing and correcting mistakes led to unacceptable delays, with respondents saying it took an average of 11 days to obtain invoice approval from department heads.

Automation Benefits 

Interviewed for the “AP Automation Tracker,” Shep Hickey, founder and CEO of Bryzos, an online marketplace for third-party buyers and sellers of steel products and accessories, said that from the point a customer places an order, purchase orders and sales orders get turned into packing lists, bills of lading and ultimately an invoice — all of which are prone to errors when done manually.

For example, Hickey said, a misplaced decimal point can set off a ripple effect in many different documents, leading to delayed payments and orders — and mounting dissatisfaction and mistrust between partners.

Automated invoicing systems, on the other hand, not only process orders electronically and generate the required documents for a sale but also check the math, send the invoice electronically, handle the payment between accounts and send all of the relevant information to a firm’s enterprise resource planning (ERP) solution, Hickey said.

Implementing AP Automation 

Automating AP processes means that recurring payments can be set up to pass through from invoice (which may be standardized in its presentation and may be for the same charge every month) to payment with approvals of the purchase order already in place, Beanworks CEO Catherine Dahl told PYMNTS in a February interview.

Read more: AI-Powered Payments Platforms Put Paper Processes on Watch

“You should be able to take the invoice all the way through to payment and have one person at the end make sure that ‘Yes, all the dots lined up,’” Dahl said. “There are dashboards on a daily basis where the accounting team is managing the process, but they’re not doing the process.”

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