A Sage Intacct Pro’s Guide to Streamlining Invoice Processing
Accounts Payable (AP) is a critical part of any Sage Intacct user’s financial operations.
- Paying bills accurately and on time is crucial to keeping supply chains moving.
- Sage users are more likely to receive favorable terms and discounts when they pay promptly.
- Tightly managing payment terms helps Sage users avoid potential cash flow problems.
- Tracking expenses and liabilities is critical to accurate financial reporting and auditing.
- Effectively managing contracts and payment terms help Sage users avoid compliance issues.
Despite the essential role that AP plays in financial operations, most Sage Intacct users still rely on manual and semi-automated invoice approval processes that are inefficient, ineffective, and risky.
Sage Intacct users blame lots of reasons for dragging their feet on invoice automation, including a lack of IT resources, insufficient capital budgets, senior management resistance, fear of change, and inadequate departmental resources. But confusion about how to start an automation project is one of the biggest reasons that many Sage Intacct users haven’t deployed an automated invoice processing solution. The article provides a guide to streamlining invoice processing through AP automation.
The biggest invoice processing challenges:
Manual and semi-automated invoice approval processes create big challenges for Sage users:
1. Low staff productivity. Manual invoice processing bogs AP pros down. According to the Institute of Finance and Management (IOFM), the typical AP practitioner spends 84% of their workday keying invoice data, shuffling paper and emails, chasing down information, fixing errors and mistakes, and responding to telephone calls and emails from suppliers about where things stand in the process. In fact, most AP leaders spend more time on manual invoice processing tasks than on staff training and the other managerial responsibilities they were hired to perform, IOFM finds. All the time that AP professionals waste on manual invoice processes is time they cannot spend on fulfilling higher-value activities such as analyzing data, collaborating with stakeholders, and building relationships with suppliers.
2. Too many errors. Errors are inevitable when there are manual tasks. A single typo or transposed number can result in payment delays, duplicate payments, erroneous payments, or other issues that chip away at a buyer’s profitability and strain supplier relationships. Incorrect data also makes it difficult to accurately forecast cash or manage budget performance. Left unchecked, erroneous information also creates compliance issues for a buyer.
3. High costs. Manual tasks are a big contributor to high operations costs. American Productivity & Quality Center (APQC) finds that labor represents a median of 60% of the typical AP department’s total budget. What’s more, Sage users that rely on manual invoice processes must hire additional staff as their AP volume grows – a significant challenge in today’s tight labor market. But that’s just the tip of the iceberg when it comes to the true cost of manual invoice processing. Sage users can spend big bucks each year on paper-related consumables such as paper, interoffice envelopes, and printer toner. And storing paper invoices in file cabinets and cardboard boxes can take up valuable office space, while using a third-party storage service can be very expensive.
4. Poor visibility. Most AP departments are flying blind, despite their investments in ERP applications such as Sage Intacct. In a manual or semi-automated invoice processing environment, key information is not captured, captured data is incomplete, information is poorly organized, data is not timely, and systems are fragmented. Poor visibility makes it hard to manage and forecast cash, control corporate spending, or identify potential risks. The financial close also is harder and more prone to mistakes when information is not accessible.
5. Weak controls. If it feels like your AP department’s risk of compliance issues and payment fraud is higher these days, you are not alone. Increased compliance and fraud risk is the biggest challenge that AP leaders surveyed by IOFM say their department faces. The shift to remote and hybrid working disrupted established policies and procedures for onboarding suppliers, approving invoices, and paying suppliers. Manual and semi-automated invoice processes cannot enforce separation of duties, do not ensure chain of custody, don’t log actions taken on an invoice, don’t provide managers with visibility into where things stand.
These are the primary reasons that more Sage Intacct users are automating their invoice processing.
What is invoice processing automation?
Automated invoice processing solutions digitize and simplify the approval of invoices submitted by suppliers. The best invoice processing solutions automate every step of the invoice approval cycle, including invoice receipt, invoice data capture, general ledger coding, invoice matching, invoice approval routing, the posting of approved invoices to the buyer’s enterprise resource planning (ERP) application or accounting software package, and invoice reporting and reconciliation. Automated invoice processing solutions use a wide range of technologies, including robotic process automation (RPA), optical character recognition (OCR), artificial intelligence with machine learning, digital workflows, and business intelligence. Industry-leading invoice processing solutions are delivered via the cloud.
Benefits of automated invoice processing:
Automated invoice processing provides significant benefits for Sage Intacct users.
- Improved efficiency. One of the biggest benefits of automating invoice processing is increased efficiency. It costs highly automated AP departments less than one-fourth as much to process an invoice compared to their peers with little or no automation, IOFM reports. A big reason for the reduced costs is that highly automated AP departments process eight times as many invoices per full-time equivalent (FTE) as their peers with little or no automation.
- Faster cycle times. Automating invoice processing also eliminates the keying, paper shuffling and other manual tasks that slow invoice approvals down. Highly automated AP departments approve invoices in less than one-fourth the time as their peers with little or no automation, IOFM finds. Faster invoice approvals result in fewer late payment penalties, more opportunities to capture early payment discounts, and better supplier relationships.
- Fewer errors. Eliminating manual tasks reduces the possibility of errors and discrepancies. Invoice data is automatically captured with a high degree of accuracy and matched with purchase order (PO) and proof-of-delivery information in an ERP or accounting system. Automation also ensures that invoices won’t become lost, misfiled, or stolen.
- Less risk. Automation provides better visibility and control over invoices from the time they are received. Sage Intacct users can standardize their processes for receiving, processing, approving, and posting invoices, ensuring separation of duties, chain of custody, and adherence with corporate policies for approving invoices. Automated invoice processing solutions also eliminate the possibility of invoices being deleted ahead of retention schedules.
These are all compelling reasons for Sage Intacct users to automate their invoice processing.
How to find the best invoice processing software:
There are lots of invoice processing solutions out there. Choosing the wrong one can set a business back. Here are some strategies for finding the best invoice processing solution for your business.
- Assess your needs. Determining your organization’s business needs is the first step in choosing the right invoice processing solution. Explore the volume and type of invoices you receive, the data that must be captured, and requirements for routing invoices for approval.
- Identify potential vendors. Look for technology providers with strong customer reviews, and a proven track record in invoice automation in your industry and with organizations like yours. And be sure a solution can work seamlessly with your Sage Intacct application.
- Strive for end-to-end automation. Give extra weight to technology providers with modern software and a platform that can automate the entire invoice processing lifecycle: invoice receipt, data capture, invoice matching, approval routing, invoice posting, and storage.
- Evaluate a solution’s usability. User adoption is critical to achieving payback on invoice automation investments. Consider whether an AP solution is intuitive and easy to use.
- Focus on a solution’s total cost of ownership. Be on the lookout for hidden license fees, unexpected professional services charges, and extra implementation costs. Also be sure that a prospective vendor’s pricing model aligns with your organization’s budget and requirements.
These considerations will help ensure that you choose the right invoice processing solution.