In this time of the year, when there is less work to do and business owners take a break from work, many of them use this time to review the year and make new plans. In doing so, they should definitely include invoice management.
The handling of invoices, receipts, and other statements is crucial for the success or failure of a company. This was clearly demonstrated this year, when many companies sent their employees into the home office without much preparation. Those who had already digitized their processes and regularly tested the workflows had a clear advantage. Employees were used to accessing, editing, and sharing documents outside of the office. Other companies had to start those digital processes from zero, so that the workflow could continue. For example, according to the latest DATEV Digitization Index, digitization in tax firms has clearly picked up some speed, in particular in small firms. 69 percent of law firms invested in digitization in 2020, and more than half increased their investment volume compared to the previous year. In addition to hardware and software, the focus was primarily on setting up home office workstations. According to the digitization index, 94 percent of large, 86 percent of medium-sized and 65 percent of small law firms, now have mobile access to their data.
Apart from the fact that this is still far from everyone, mobile access to documents is only a small part of digitization. Indeed, according to the Digitization Index, the proportion of law firms that offer their clients remote support or evaluations on a shared digital platform has increased. However, this proportion is only 51 percent and 53 percent respectively. The need to catch up is confirmed by the current KPMG study “Digitalization in Accounting”. According to the study, companies are only hesitantly using new technologies such as AI. In most areas of accounting, the use of AI is still a dream of the future. Yet, exactly this is the key to exploiting the benefits of digitization. Especially because AI enables automation, the further processing of documents without manual effort.
The digitization of invoice management offers many benefits. Documents from various sources, such as e-mails, online portals, and invoicing tools, can automatically be compiled in a cloud so that authorized users can access them from anywhere in the world. Moreover, relevant invoice information such as invoice number, supplier, and invoice amount can be read without manual effort, and for instance, be matched with data from bank statements. In addition to that, the required information can automatically be transferred to other applications, such as accounting software or to the tax advisor. All invoice information is available right where it is needed. By avoiding media discontinuities, these processes are even more error-free than with manual processes, and that almost in real-time.
Advanced invoice management solutions include intelligent algorithms that automatically match account and credit card transactions with the associated invoices or receipts. This includes matching the amounts, vendor name, and purpose of the transaction. Users can avoid another time-consuming manual task in preparatory accounting, which saves them even more time.
As a result, fully digital invoice management speeds up the processing of invoices without the need for additional human resources. Efficient cash flow management becomes possible and benefits such as cash discounts can be used. Besides, those responsible always have an up-to-date overview of the financial situation, which is a good basis for decision-making.
Accordingly, it would be a promising good resolution for the new year to push digitization projects in invoice management or to adjust processes that have already been started. This not only eliminates problems in accounting or problems with the tax advisor, for example due to missing documents or a long processing time. It also creates the basis for putting actual business plans into practice.
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