Does this sound familiar? Last month my business lost money because of invoice processing errors. Let me start at the beginning. As part of a solution set for our customers, we buy high-end printers and scanners from a distributor for resale. We add a modest 5% margin to the cost of the unit and when we are able to pay our invoice early our distributor gives us a 2% discount, giving us a little extra profitability on the deal.
A couple of months ago we closed a deal that needed several high-end document scanners. We followed our normal process and delivered to the customer our packaged solution. However, we made a mistake. When we entered the invoice a wrong key was entered. Because of that one little keystroke mistake nothing matched and the approval of payment for that invoice, that we count on paying early to take advantage of the early pay discount, was late to be paid. So not only did we miss our early pay discount but we also incurred a late penalty of 5%.
Invoice processing errors won’t cost me again.
I hate losing money and that is when I decided to find out how I could lower my invoice processing errors. Now, these sorts of processing errors don’t happen all that often, however it got me thinking, how much more profitable could my company be if we eliminated invoicing processing errors altogether and took advantage of all of our vendors early pay discounts?
How I lowered my invoice processing errors.
Technology is a wonderful thing. Automating our Accounts Payable process is one of the smartest things my company ever did. Because we automated our AP process we get:
- Accurate invoice data which means we no longer have to investigate and correct data entry errors.
- A cost-effective process helping us to achieve up to a 70% reduction in AP expenses.
- Audit friendly reporting since every action is time-stamped and user stamped, for simple and accurate audit trails.
- Early pay discounts for nearly all of our vendors since OCR technology allows us to enter invoices quicker to approve quicker.
- Maximum productivity in our AP process because the large amounts of paperwork and manual entry inefficiencies no longer exist with automation.
As I said before, technology is a wonderful thing!