In the current environment of distributed workforces, it is vital that your accounting department use a document management (DM) solution to simplify and automate accounts payable (AP) processes. According to a recent AP automation report by PYMNTS.com, “Restarting and reinventing the U.S. economy will involve accounts payable automation. Count on it. ‘Buyers need upgraded AP tools that provide detailed views of their finances and outstanding invoices to keep their operations running smoothly.’” Here are seven common benefits of using a DM solution that your accounting team will enjoy:
1. Guaranteed easy and fast access documents and high visibility: If your team can’t access the documents they need and don’t know when invoices are due, it’s difficult to process payments and predict cash flow needs. When you use a DM invoice approval software, all accounting documents, including customer and vendor communication, are securely stored in a centralized, digital repository. Distributed team members with authorized access can pull up documents from any location. They can search for a specific batch of documents based on any search criteria or build custom lists to see documents by due date.
2. Eliminate paper and manual data entry: Paper processes with a poorly integrated accounting system leads to wasting time chasing paper and doing manual data entry. Integrating your accounting software with a DM system automatically shares relevant information and reduces the need for manual data entry. You also eliminate manually indexing data on recurring invoices as the DM solution remembers each document’s indexing criteria.
3. Implement a disaster recovery plan: If you’re storing accounting documents on paper in one physical place, you’re risking irrevocable loss in the event of natural and other disasters. With a digital system, it’s simple and inexpensive to store redundant copies of important business information. If you opt for a cloud-based system, the process is even simpler. Your DM solution provider is responsible for creating secure system backups.
4. Use simplified, automated digital workflows: In many accounting departments, some processes only exist in the heads of certain employees. This always makes your department reliant on specific people being in the office. It's difficult to ensure that correct processes are always followed. When you set up AP workflows in a DM system, the correct process is followed automatically. Through task lists, email notification reminders and audit trails, you ensure invoices and other documents are getting routed and processed accurately and on-time.
5. Capture early payment discounts: Vendors offer discounts for early payments or additional charges for late payments. Slow, inefficient invoice processing makes it difficult to keep track of these discounts and meet their deadlines. A DM solution enables you to put workflows and automatic notifications in place to prioritize payments and capture discounts.
6. Be prepared for audits: In the event of an audit, you don’t want your team to spend weeks or months compiling and organizing files. In a paper-based system, employees pull individual files and documents from a filing cabinet and make photocopies. An electronic DM helps save enormous amounts of time as well as freeing you from costly fines for missing information. Your documents are organized in a secure system that makes it easy to quickly export or share the right files with auditors.
7. Realize that a DM and automated workflow solution pays for itself: Implementing a DM solution makes a huge difference in your accounting department’s efficiency, resulting in a substantial ROI. According to research by the Aberdeen Group, the most efficient organizations can process an average invoice within a day at a cost of $3.34. As a result, they’re able to capture 90% of available early payment discounts, realizing significant savings. The average organization spends much more per invoice ($6.29) and captures only 47% of these discounts. If you're one of these companies, increasing efficiency with invoice automation software could cut your invoice processing time and costs in half.
With digital document management, accounting teams improve efficiency and productivity with robust search tools and workflow automation, along with maintaining compliance and being well-prepared for audits.
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