You may think that using paper for business is a thing of the past. After all, businesses of old primarily used paper to disseminate information company-wide and to communicate with stakeholders. For instance, it was not uncommon for businesses to correspond with their partners via snail mail.
In truth, the use of paper in modern businesses continues even in 2020.
What are the challenges of paper-based accounts payable processes?
Although digital alternatives such as accounts payable (AP) automation solutions are available, the challenges of paper-based processes have never been more apparent.
1. Inefficient processing
Paper-based processes require employees to move paperwork around the organization. Invoices also have to be manually encoded and shuffled from one department to another. This limits your employees’ productivity and efficiency.
Meanwhile, switching to digital AP solutions like PaperSave can speed up invoice processing. With PaperSave, you can:
- Receive invoices in PDF format and capture data from them.
- Take pictures of paper invoices and capture data from them.
- Eliminate the need for manual data entry, as all captured data is organized and stored in the cloud.
- Easily retrieve stored documents with a search function.
- Approve invoices via the PaperSave app.
2. Inaccurate invoice matching
To avoid making erroneous payments, you have to manually check the accuracy of each paper-based invoice. This is on top of double-checking manual data entry to ensure that the information was copied correctly.
In two-way matching, for instance, you need to match the information of invoices with purchase orders. Meanwhile, three-way matching requires cross-checking the invoice, purchase orders, and goods received. This can take some time to complete.
AP automation solutions, on the other hand, can efficiently match purchase orders and invoices without manually checking each one. You can even automate your purchase order system for more convenience.
3. Inaccurate exception invoice handling
An exception invoice is one on which the information does not match that on the purchase order. And if you’re already spending a lot of time on invoice processing, exceptions mean more work.
But through AP software, exceptions such as nonstandard invoices and documents with discrepancies are easily detected and routed for manual approval. What’s more, you can configure your AP solution’s flagging rules for better accuracy.
4. Increased travel
Relying on paper-based processes will increase the amount of travel required to finish certain tasks.
Just the act of picking up invoices and receipts from the supplier and dropping them off at the office requires an employee to travel. Multiple journeys throughout the year also translates into high costs. And with lockdowns in place due to the COVID-19 pandemic, traveling can prove more difficult.
Digital AP solutions, on the other hand, can help you easily receive documents from your clients via email and business communication apps. This not only shortens the time it takes for the document to reach you, but it also eliminates unnecessary travel expenses.
5. Reputational damage
Your vendors and clients trust in your ability to deliver timely goods and services. If you're not able to make good on your word, you can easily lose your reputation. And in an increasingly connected world, people expect speed and efficiency that only digital AP solutions can provide.
Paper-based processes have a higher probability of error. For example, handwritten documents require more administrative resources, can go missing, or be misread. Making repeated errors in transactions with your vendors and clients can damage your business’s reputation, making it difficult for others to trust you.
But with digital AP solutions, you can speed up payment processes, allowing you to pay early. This not only grants you discounts but also strengthens your reputation with vendors.
Digital solutions like PaperSave can help streamline your workflows to make them as efficient and cost-effective as possible. Our AP automation solution simplifies all your processes and boosts your workforce’s flexibility and productivity. Schedule your free personalized demo today to learn more.