How To Reduce Manual Invoice Processing With AP Automation
by Maddy Osman
According to the National Restaurant Association’s 2021 State of the Restaurant Industry Report, more than 40% of operators have embraced contactless payments and digital menus.
It might seem to guests that your restaurant has fully embraced digital technology. And maybe you have, in the front of house.
But, if you’re still shuffling through paper invoices every month, then you know your operations tell a different story.
Less than 30% of companies have an accounts payable (AP) automation solution in place. Most businesses spend too much time and resources manually processing invoices when they could be saving with automation.
Discover how to reduce manual invoice processing and see how AP automation not only reduces costs but helps you build better supplier relationships and make more data-informed decisions.
Here’s what you’ll learn:
- Hidden Costs of Manual Invoice Processing
- Switching to Automated Invoice Processing
- Accounts Payable Automation Benefits
- Final Thoughts: How To Reduce Manual Invoice Processing With AP Automation
Hidden Costs of Manual Invoice Processing
Processing your invoices manually might seem like a no-brainer. After all, it’s how you’ve always done it.
But when’s the last time you considered your invoice processing costs?
If you’re still mailing checks, then you’re spending anywhere from $3.45 to $26.60 to mail and track your envelopes.
Even if you pay online, credit card companies charge between 1.3%-3.5% per transaction.
Not to mention, someone on your AP team or your third-party accountant has to physically review the invoice, send it to the right approval channels, and write the check or make an online payment.
Altogether, a single invoice costs you 85 minutes and $21.25 on average when processed manually.
In contrast, automated invoice processing only uses 15 minutes and $3.75 per invoice. That means you save 70 minutes and $17.50 on each invoice.
Switching to Automated Invoice Processing
AP automation software lets you automate manual tasks such as invoice uploads, approval routing, payments, and invoice matching. You can also create supplier visibility and notify vendors when your payments are sent.
AP automation solutions providers like Plate IQ integrate seamlessly with accounting software and let you take advantage of cashback opportunities.
Let’s take a closer look at all the benefits you get from implementing an AP automation system.
Accounts Payable Automation Benefits
- Reduced costs
- More on-time payments
- Increased spend control and oversight
- Better supplier relationships
- Streamlined accounting
- Improved accuracy
- More secure payments
- Access to spending insights
Automating your accounts payable tasks means you save money on printing, mailing, and tracking paper checks. Same-day payments can also help you reduce late fees and other penalties.
IOFM’s Future of Accounts Payable Report identified cost reduction as the number one benefit of paying suppliers electronically. With AP automation, you don’t just save on mailing costs — you can quantify your labor cost savings with reduced invoice processing time.
Not only that, but you can earn early payment discounts and cashback incentives instead of worrying about late payment fees.
More On-Time Payments
You don’t plan on making late payments, but they do happen. You’ve got several vendors, perhaps multiple properties, and other administrative tasks competing for your time. Sometimes the check gets in the mail at the last minute.
Unfortunately, you can’t always guarantee when your mailed check will arrive or how long it takes vendors to get to them.
Invoice processing automation software lets you use same-day payment options such as ACH bank transfers and credit card payments, so you know exactly when your money gets to your suppliers. With the right tools, you can consolidate vendor payments and gain visibility into your spending across multiple locations.
Improved Supplier Relationships
You may think that automating business processes gets in the way of relationship building, but that isn’t the case with managing your supply chain payments.
Consistent on-time payments and transparent communications with vendors help you become an A+ customer. With Plate IQ, you can even customize your payment methods, so you’re using each vendor’s preferred method.
When you’re a customer of choice, vendors are more likely to give you the highest quality products, negotiate prices, and even take risks on you when you’re in need.
Invoice automation won’t get rid of the human touch in your business, but it will make your AP department more efficient.
Software solutions like Plate IQ eliminate time-consuming manual data entry tasks such as invoice matching, categorizing spending, and the approval process. Plus, you can sync your AP information with your accounting system to ensure your data’s always accurate and up to date.
No matter how careful people are, manual processes are subject to human error. Errors on your invoice records can have a negative downstream effect on inventory and every part of your business that it touches, like accounting and future ordering.
And errors such as missing payments, late payments, and incorrect check amounts can result in accumulating late fees and hurting your vendor relationships.
Using an AP automation solution can help you reduce human errors and eliminate discrepancies between invoices and your accounting data.
With Plate IQ, vendors can send invoices electronically. But, if they still send paper invoices, any employee can email, take a photo of, or upload an image of an invoice and our optical character recognition (OCR) software will extract the data, even if it’s handwritten.
More Secure Payments
Mailing paper checks isn’t just the more expensive payment option — it’s also the riskier one. You put your financial information at risk any time you send checks or make credit card payments through the mail.
Paying through AP automation software reduces the risk of fraud. It also gives you the option of paying with virtual cards with spend rules and limits that increase your security even more. You can even create one-time use cards so there’s no risk of that number being stolen or used inappropriately.
Access to Spending Insights
Manual invoicing and accounts payable processes don’t lend themselves to data capture and analysis, which can hold you back. Competitive businesses make data-driven decisions, especially when it comes to spending.
With automated invoice processing, you can (accurately) capture your invoice data and track your spending over time to look for savings opportunities and build a revenue-optimizing order strategy.
And all of that creates a digital trail that makes it easier for you to pay taxes or supply information for a business audit.
Final Thoughts: How To Reduce Manual Invoice Processing With AP Automation
Manual invoice processing, while still widely used, is an inefficient use of your company’s resources. Switching to AP workflow automation helps streamline your accounting processes and gives your accounts payable department the tools to reduce costs and help you build better supplier relationships.
Learn more about Plate IQ automated invoice processing today if you’re ready to spend 80% less time on your accounts payable.
Maddy Osman is a writer and entrepreneur who writes about B2B technology at The Blogsmith, a research and content agency. To learn more, visit TheBlogsmith.com.
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