Invoices can easily get lost in the paper shuffle or buried in email inboxes; and the biggest problem related to these issues is that there is no accountability. Traditionally, as soon as an invoice is handed off, it becomes the responsibility of the person whose desk it falls on. Although this is a common way of dealing with this important business task, I’ll explain a how you can improve this process.
Processes You Can Improve with Document Management
Document management software gives us control of the invoice process, and many more. The top three processes document management workflows automate in today’s business environment are:
- Invoice approvals
- Hiring process
- Corporate credit card approvals
But their capabilities can improve many more processes, including but not limited to standard operating procedures, quality management, order processing and PTO requests. As an example, let’s dive into invoice processing for a closer look:
Traditionally, invoice processing has been primarily paper-based. They are commonly received via US mail, fax or email, and then printed for processing. As invoices get opened, they need to be distributed to the appropriate manager for approval. This typically means they get placed in mailboxes or on desks, often with no communication involved.
At this point, the invoice easily gets buried and/or lost in the paper shuffle that we all know too well. It could sit for hours, days, weeks or even get misplaced entirely. And the real trouble is that traditional invoice processing has no true traceability. It is very difficult, if not impossible, to determine who has what invoice, when using a paper-based process.
Other things that can and do go wrong:
- Invoice gets passed to the wrong manager
- Delays cause you to pay invoices late
- Invoice is misplaced (and not paid at all)
Invoice processing via this traditional route typically takes about a week. However, it isn’t uncommon for it to take upwards of 3-4 weeks. Not only is this inefficient, but it becomes extremely difficult to manage and meet early payment incentives (i.e. pay by said date and receive 10% discount).
How a Document Management Workflow Can Help
Through document management software (M-Files will be used as our example throughout) many of the manual processes can be automated, and the issues caused by the lack of traceability in the paper-based method are eliminated.
Though your invoices will be sent to you in the same way, what happens to them afterward changes entirely. All paper invoices are scanned into the system and any electronic invoices should be directed to a dedicated inbox (i.e. email@example.com) which will be monitored, filtered and routed by M-Files.
After the invoice and appropriate data is captured within M-Files, the approving manager can be selected. Once selected, an email notification will be sent alerting them of the invoice needing approval and their time allotted for review. From this point, M-Files can trigger additional notifications to be sent to managers or accounts payable as invoices get approved or if they are sitting for too long on one “desk”.
When the manager approves the invoice, it automatically routes back to Accounts Payable for processing. From start to finish, the entire invoice approval process, via a document management workflow, typically takes one to three days rather than a week using a paper-based method.
Benefits of Document Management
This breakdown of the invoice approval process just touches on the major steps defined for this workflow. Within document management software, the capabilities are limitless. For example, in one screen you can see what invoices are yet to be approved, which ones are late and where each sits within the workflow. Or, if a manager is on vacation, an admin can note this within the software and reassign their invoices while he/she is out. Additionally, the reporting features enable you to determine where bottlenecks are, which managers take the most time to approve invoices, average amount of time it takes for invoices to be processed across the company, or by a manager and much more.
The efficiencies and cost savings that document management can provide are tremendous. Many companies discover additional benefits of document management after they begin using the software. To begin exploring the opportunities for your organization, request a consultation with a document management specialist.