In this post you will find out why the traditional invoice approval process is obsolete and the advantages that efficient supplier invoice management can bring to the company thanks to digitization.
Many companies speak of digital transformation as an inalienable objective in 2021. In this post we want to tell you about the advantages that digitization represents for the company in the invoice management process , and, specifically, in the management of supplier invoices. Digitization has transformed accounting and today we want to tell you a secret: the 7 advantages of efficient supplier invoice management. Are you going to miss it?
Optimizing the process of management and approval of supplier invoices strengthens the economy of any organization, since it adds efficiency to the entire accounting process. And is that some of the main advantages of efficient supplier invoice management are:
1. Faster approval of payments
The most obvious benefit of invoice automation solutions is the ability to speed up payment approvals. In this way, suppliers will be more satisfied and the debtor accounting teams will be relieved of the workload.
2. Elimination of duplicate invoice payments
A digital supplier invoice management solution prevents invoices from being entered multiple times by recognizing duplicates and reducing the possibility of invoices being credited multiple times. As a result, organizations can reduce expenses related to improperly entering invoices into the system.
3. Performance guarantee
Rules based on departments, ledger codes and limit amounts are set up in the automation system at the beginning. By eliminating the possibility of non-compliant invoices being approved (for example, the amount of which is over the limit of the approver) or bypassing the people whose approval is required, invoice management automation solutions of vendors ensure that invoice approvals comply with all business policies.
4. Lower management costs
Accelerating the debtor accounting management process offers a wide range of benefits, both with regard to direct and indirect costs. The main reason is the reduction of the necessary labor, with the elimination of the manual factor of management, transfer and approval of invoices. Another effect of this productivity improvement is that finance teams can focus on higher-value activities.
5. Elimination of penalties for late payment
An efficient supplier invoice management implies, implicitly, the reduction of penalties and interest that payments made after the due date may entail. Thus, on the other side of the scale, there is a greater possibility that organizations take advantage of discounts for prompt payment. Companies capable of paying an invoice that expires within 30 days from its issuance within the first ten days can take advantage of discounts of 2% on said invoice if the supplier in question so determines.
6. Greater visibility
With the digitization of the supplier invoice management process , all parties involved in accounting have a follow-up of the invoice status during the approval process. All team members can instantly see the status of the invoice, how long a user has been assigned, and who is next in the approval chain.
The automation solutions in the management of supplier invoices also integrate seamlessly with the financial package of the organization, considered as the system of annotation of the financial information of a company. In this way, complete visibility of all vendor payments made in the finance department is guaranteed.
7. More productive information
In addition to continuous visibility into approval processes, efficient digital invoice management of vendor invoices also provides organizations with valuable information. It is enough for CFOs to access the system and view the panels showing the amount spent by supplier, budget code, and department. This level of detail enables organizations to gain a deeper insight into spending against budget and also aids in negotiations with vendors to secure discounts.
Therefore, the leap to the digitization of the supplier invoice management process can lead to an improvement in the efficiency of the company’s accounting that, ultimately, translates into greater control of expenses and more information to make strategic decisions. on time.