Accounting is one of the areas where automation and digitization can save a lot of time.
Purchase invoice handling, if not automated, is one of the most time consuming activities. Many companies have already started using e-invoices and online tools to make their processes more efficient, accurate and transparent. Here are 5 best practices that will help you save time in accounts payable.
1. Use e-invoices and paperless accounting
Invoices should arrive centrally in a digital inbox, minimising the need for manual data entry. This helps to avoid data entry errors and enables the whole process to be more accurate and transparent to all stakeholders. There should be need to search for invoices in your mailbox, print them out, sign on paper and store them in a physical folder. The new streamlined process also helps to reduce our carbon footprint.
For example, Telema eFlow enables you to access your company’s invoice inbox from all around the world. Invoice inbox collects invoices in all formats: e-invoices, PDFs and scanned paper documents.
According to research, processing a paper invoice takes on average 30 minutes, while processing an e-invoice will take only 5 minutes. Thus, using e-invoices takes 6x less time and is 60-80% cheaper. To reach such savings, implementation of the other 4 best practices is also a must.
2. Use electronic invoice workflow and automation
Approve invoices online, either travelling or from your home office. Telema eFlow forwards invoices to right persons, who can then add their e-approval even on mobile, regardless of location. You no longer need to run around the office gathering signatures or wait for email replies.
There is also automation potential in cost allocation, especially for recurring invoices. For example, office rent invoices from Rental Ltd are always booked to rental cost account 5442, invoice rows for phone no +370 54321000 on monthly phone bill are always automatically booked as John’s expenses (belonging to Helpdesk department). Since more than 75% of invoices are recurring, this saves accountants’ time significantly.
3. Make your accounts payable process transparent
Transparency is one of the greatest, but often most underestimated benefits of digital accounting. It gives you a real time overview of purchase invoices and reassurance that not one invoice will be lost in the process. All approval and cost allocation steps are logged and invoices are electronically archived as required by the law. There is no need to archive paper documents. Invoices are conveniently accessible to all relevant parties (e.g your auditor or the tax authority). In addition, you will get an early insight to your expenses that can be useful in cash flow planning.
4. Use purchase orders for all invoices
Creating orders for all purchases (not only for goods, but also for services) reduces the risk of errors and improves your understanding of expenses. If goods or services are delivered as agreed, quantities and prices on invoice match with those on purchase order and receiving advice, then manual invoice handling is not even necessary. The system can do it automatically.
You can even book your expenses based on purchase orders (and not wait for invoices). This will allow you to get an overview of your company’s fiscal situation much earlier (and close the books faster).
5. Automated data validation
Automated solutions help to avoid errors that are common in paper based processes. For example, Telema eFlow checks automatically, if invoice data matches with the respective data in your ERP. Are supplier bank accounts, payment reference numbers and payment terms matching with the data on supplier cards? In addition, the system checks duplicates, tax calculations and dates.
Telema eFlow is a convenient tool for electronic invoice approval and cost allocation. With eFlow you can implement all these best practices in your organization.
Read more about the features of Telema eFlow