6 Factors for Perfect Invoice Management

Documents originating from more and more different sources make invoice management difficult for a lot of businesses and organisations. Time-consuming preparatory bookkeeping, missing documents, little overview and long throughput times are some of the consequences. However, this can be remedied with electronic or digital invoice management.

As a rule, businesses already receive a lot of invoices in digital form – either via email or through customer portals. From there, though, they first have to be downloaded. Between logging in and saving, this constitutes an annoying procedure that, in the context of preparatory bookkeeping, costs a lot of nerves month after month. Moreover, invoices and receipts coming in by post are being – best-case scenario – scanned and forwarded through various stages for further processing; just like outgoing invoices that exist in isolated systems.  In short: dealing with hybrid documents overstrains many businesses. Errors in downstream business processes are pre-programmed.

Paper-based booking as a source of errors

Those errors include, for instance, the printing and booking of invoices that exist in digital form. The issue is not only that digital documents have to be stored digitally, but also that paper-based processes exhibit high potential for mistakes. Data is often being copied and typed out. Transfer errors can occur, and the procedure generates labour. How far-spread these activities are is shown in the study “Digitalization in Accounting 2019” by KPMG. According to the study, 40 percent of businesses still make paper-based bookings. Documents are often forgotten in such businesses, as the overview is insufficient and throughput times reach record lengths. Preparatory bookkeeping can only be realized with high personnel expenditure and high costs. And yet, early-payment discounts are hardly attainable, while image loss due to late payments cannot be ruled out.

The crux of the matter

That’s why businesses need intelligent invoice management. Many have recognized this and search the internet for terms like “manage invoices” or even “invoice manager”. But the quest for a contemporary solution doesn’t require such approaches. The important thing to know is what characterizes clever invoice management – which is, by the way, a form of document management. Essentially, you are looking at the following success factors:

1. Completeness
   All documents are complete. That includes invoices received by email, invoices provided by suppliers in customer portals, receipts scanned on the go, as well as invoices arriving by post and documents from third-party solutions. That can include, for example, outgoing invoices created in an ERP system or another specialized tool, or travel expense reports shared by employees via cloud storage.
2. Correctness
   Captured information like invoice number, date and amounts have to be correct – regardless of how many different software systems and stages the documents were forwarded through.
3. Clarity
   All documents are to be organized clearly, so they can be found anytime with as little effort as possible. To that end, it proves useful to bring those documents together in one central location and to assign specified keywords
4. Transparency
   All work stages should be comprehensible for third parties, like auditors, for example. That includes the information of when a document has been imported and where from, who added which keywords, or who deleted which document at what time.
5. Security
   Invoices may contain sensitive data and have to be protected from unauthorized viewing and access. As well as that, it has to be guaranteed that they stay readable throughout their entire retention period. So, invoices not only have to be transmitted encrypted, but archived with legal compliance, too. Storage in PDF/A format and redundant safekeeping in secure data centres is recommended.
6. Speed
   An essential characteristic of any professional invoice management is a short throughput time for invoices. That means: all invoices and receipts are brought together in the shortest possible time after their arrival and provided to the according applications – whether that is an accounting solution or a document management system (DMS) for archiving. This creates the prerequisites for quick payments and bookings, as well as prompt evaluation and decisions based on current information.

Digital invoice management as a solution

All these success factors can be achieved by businesses and organisations by using an intelligent digital invoice management. It is also possible to easily automate a multitude of activities. Those range from document retrieval from the different sources like customer portals, email postboxes and invoicing tools, over gathering and managing those in one central location in the cloud, to transmitting them to accounting systems, DMSs and other applications.

This procedure reduces manual efforts to a bare minimum. Businesses are thus able to eliminate sources of errors and save time and money. Furthermore, business processes are sped up, owing to the shorter throughput time of documents.

Try it!