Comparing paper-based and paperless invoice processing

Comparing paper-based  and paperless invoice processing

Electronic invoices are superior to traditional paper invoices in many ways. They improve the speed and security of your invoice management process and are much cheaper to use than their paper-based counterparts. To give you a better understanding of the benefits of paperless invoice processing, this blog will discuss the solution and how it compares with using paper documents.

What is an electronic invoice?

An electronic invoice is an invoice in digital format. It contains all the information you’d find in a conventional invoice, except it’s not printed on paper. Instead, you view and process it using a computer or mobile device. It’s usually in portable document format (PDF), although it can also occur in various file types, depending on the system being used to process it or the users’ preferences.

An electronic invoice is produced, stored, and managed using a document management system (DMS) solution like PaperSave. This invoicing software can even convert a paper invoice into an electronic one. If you have the PaperSave app on your phone or tablet, for instance, you can take a photo of a paper invoice using the camera on your device. The app will convert the data on the photo into a digital invoice, which will then be automatically sorted and stored in cloud servers.

One of the most remarkable benefits of electronic invoices is that they let you go beyond the limits of paper documents. For one, they can be transmitted via email or other secure communication channels that support file attachments. This is much cheaper, faster, and more convenient than coursing a paper document through snail mail or courier. Electronic files are also much easier to secure, unlike paper documents that are easily misplaced or damaged.

What does electronic invoice processing look like?

To better illustrate the merits of a paperless invoicing system, it’s best to compare it to traditional invoice processing and approval, which usually has the following steps:

  1. Your vendor prints an invoice and sends it to your company via courier or mail.
  2. Someone in your company receives the invoice. The document is sent to your accounts team.
  3. The invoice is recorded, filed, and processed for approval. This process includes three-way matching, in which the invoice is matched with the purchase order and the product shipping details.
  4. Once found valid, the invoice is sent to the approver.
  5. The designated person approves the invoice.
  6. Payment is processed and sent to your vendor.

Paper-centric invoicing is a manual process, which means it is not only slow, but it is also prone to error. Electronic invoicing eliminates many of these steps, especially those that invoice manual data entry and document filing, As a result, a paperless invoicing process usually looks like this:

  1. Your vendor creates an invoice. If it’s a paper invoice, it is sent via mail or courier. But if it’s an electronic invoice, it may be transmitted electronically and received within seconds.
  2. Your DMS can extract data straight from electronic invoices. For paper invoices, you can use a scanner or the camera on your mobile device to capture their data. The extracted information is automatically organized, stored, and even validated for approval.
  3. The invoice is approved.
  4. Payment is processed and sent to your vendor.

Like most paperless solutions, electronic invoicing can be conducted outside the office. PaperSave, for example, allows approvers to approve invoices using their mobile devices. This reduces the risk of delayed payments and helps you maintain a positive relationship with your vendors. What’s more, it may even help you qualify for discounts given to early payees, saving you a lot of money in the long run.

PaperSave helps boost the efficiency, transparency, and timeliness of your accounts payable process. Schedule a personalized free demo today to discover the many ways we can empower your business.