Invoices have always been difficult to process. Every business faces certain challenges when it comes to processing invoices. To remain productive and profitable, these challenges must be addressed effectively. The following lines describe some common billing issues and how to resolve them.
Common Billing Issues
Traditional invoice processing is an error prone and inefficient process. Especially when it comes to manual invoice financing, it is the most inefficient and error prone process. Due to the inherent nature of the problem, there isn’t much room for improvement. Automation is the only solution to these problems, but it has some drawbacks. Let’s look at these issues first before discussing the solutions.
The most common invoice processing issues are:
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Errors and Omissions
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Vulnerable to Fraud
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Missing/Lost Invoice
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Inefficiency
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Lack of scalability
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Lack of transparency and visibility
Errors and omissions
Many errors can occur in the manual billing process. Errors can appear as soon as the invoice arrives at your organization. Invoice amounts, payment terms, dates, and all other important information can be entered incorrectly in your books. With multiple employees involved in the process, anyone can make a mistake. So there is always the possibility that the wrong entry finds its way. Duplicate invoices can result in double payments. Manual invoice processing systems cannot easily identify and correct these errors and omissions.
Vulnerable to Fraud
Manual invoice processing presents many opportunities for fraud. Falsification of invoices, intentional duplication, and falsification of billed amounts are possible. Since the process is offline, it is not easy to detect such fraudulent invoices once they become part of the process. Without access to the whole process, such fake invoices can easily enter your payment and cause financial loss.
Missing/Lost Invoice
Because manual invoice processing is an offline process, invoices may not reach buyers on time or at all. If payment is deferred, the seller will not be able to track the invoice prior to the actual payment due date. In this scenario, the missing invoices can be identified later. Also, invoices can get lost in internal processes. This problem is not easily resolved by manual invoice processing.
Inefficiency
Manual invoice processing is inherently inefficient. It tends to be delayed as it affects multiple human resources. The people involved in the process aren’t necessarily inefficient per se, but it’s the desk-to-desk manual workload that slows the process down. There are several possible reasons, such as the temporary absence of a particular data subject, workload priorities, delays in sending invoices between different desks, and lethargy. All these factors result in inefficient billing processing.
Lack of Scalability
Manual invoice processing is resource intensive, making it difficult to scale the process to meet workload spikes. The number of invoices a company processes is not always the same and can fluctuate significantly throughout the year. B. Special Occasions, Sales, or Surprise Requests. Therefore, dealing with these situations is not easy. You can’t increase or decrease headcount in the face of rapid change. This issue is also very common in manual billing scenarios.
Lack of Transparency and Visibility
Manual or offline billing processes are not always visible to everyone involved. This invisibility also poses a problem of transparency to the other party. Suppliers cannot easily keep up to date on know your invoice status. Even within an organization, not all stakeholders are always kept up-to-date. They all become dependent on slow, inefficient and invisible mechanisms. This creates a lot of inconsistencies and coordination issues. The above issues are faced by almost all organizations that rely on manual billing processes.
Many of these issues are not even addressed by traditional invoice automation solutions. Let’s see the solutions to these problems.
In this way, an invoice automation solution can eliminate most errors to a satisfactory level.
Reduce Vulnerability to Fraud
An automated invoicing solution provides transparency for all parties involved, greatly reducing the chances of bogus invoices entering the system. Duplicate credentials can also be accurately detected. Since everyone involved is connected to the online system in real time, no system vulnerability can be exploited. This keeps most fraudulent and fake invoices out of the system.
Eliminate the problem of missing or missing invoicesWith the right invoice automation solution, suppliers can connect to their systems to send/get invoices and effectively address the potential for lost invoices. Once an invoice is entered into the system, it remains there until the process is finished. In this way, automation can save companies from missing invoices and related records.
Solutions to Inefficiency
ProblemsInvoice automation systems do most of the work for your accounting staff. You don’t have to be at your desk all the time to complete relevant tasks. Tasks such as invoice verification, approval and payment can be performed from your mobile computing device on the go. Additionally, there is no need to manually forward/move invoices, registers and related documents to colleagues.
All relevant records are accessible online. These factors contribute significantly to efficiency. The latency factor is almost greatly reduced. It also makes follow up easier.
