Do you know how much time it takes to process an invoice manually? From the day the invoice is received until it is paid for? Any guesses?
Well, on average – 25 days.
This means it takes over three weeks for a single invoice to be cleared in a typical small-to-medium-sized business in the United States.
What’s more, it also costs anywhere from $10 – $30 to process each of these paper invoices.
So what can businesses do to improve the invoice processing times?
Enter electronic invoice management software (e-invoice management software).
E-invoice management software promises to cut down invoice processing times from 25 days to just 3 – 5 days while reducing human error and eliminating bottlenecks.
It’s not difficult to see the potential of electronic invoice management software and how it can revolutionize the game for many enterprises.
So, could it be time for you to make the switch from legacy manual invoice processing to automated systems? Certainly.
But before we make the case for e-invoicing here’s what you need to know about electronic invoice management software.
What is Electronic Invoice Management Software?
In order to understand what electronic invoice management software is, let’s first define electronic invoicing (e-invoicing).
In the simplest of terms, electronic invoicing is just a form of electronic billing i.e. digital-based IOU.
And electronic invoice management software is the technology that is used to handle incoming invoices from vendors from the moment they arrive until they are cleared.
One of the chief goals of the accounts payable department is to ensure suppliers are paid on time. Therefore, e-invoice management software is of great benefit to them.
We’re now going to explain why this is the case.
5 Reasons You Should Use Electronic Invoice Management Software
Legacy manual paper-based invoicing payment processes greatly hinder business efficiency, impairing teams, and leading to costly operations. Electronic invoice management software refines the entire invoicing process as follows:
1. Ameliorates Cash Flow Management
Invoice digitization encourages the optimization of working capital because it cuts down on the time it takes to approve invoices.
With manual paper-based invoices, the longer it takes to approve an invoice, the higher the price to process an invoice becomes. Already, enterprises are spending up to $30 to process invoices manually.
Therefore, it becomes extremely beneficial to replace these legacy systems with software that not only speeds up the entire process but allows you to mitigate costs, improve supplier relationships while giving accounts payables departments the freedom to take advantage of early payment discounts.
2. Improves Spend Visibility for Lenders
Nothing puts lenders off than a business whose financials aren’t in order.
If you plan on sourcing external funds to inject cash into the enterprise, it is in your best interests to make sure that you can easily pull up records for debtors to see that you’re responsible when it comes to credit and debt repayment.
Having a repository to fall back upon with carefully indexed records gives banks the confidence to trust you with a loan. Your enterprise’s risk profile receives an immediate boost.
3. Boosts Process Automation
Electronic invoice management software enables the automation of a recurring business function – invoice processing.
Automation of invoice processing streamlines an enterprise for simplicity, achieving digital transformation and directly influencing the increase in overall service quality and service delivery.
In addition, automation can also aid in rectifying any contract management issues the procurement and accounts payables departments may be having.
4. Enhances Efficiency Gains
Studies prove to us that there is indeed a positive impact on efficiency when electronic invoice management software is integrated into the operations of accounts payable departments. The most notable improvements are in data capture and entry and invoice approvals and matching.
Furthermore, there is compelling research that demonstrates the significant cost reductions that are had when enterprises switch to e-invoicing. For example, electronic invoices are nearly six times cheaper (at just over $5) to process than paper-based invoices (which cost approximately $30).
Manual paper-based invoicing cannot be compared to automated invoicing systems. So, stop working so hard and reduce your invoice processing by more than half the time with electronic invoice management software.
5. Lowers Enterprise Carbon Footprint
In the U.S., as many as 3 million trees are cut down every single year to generate the paper needed to make invoices. That’s not all but about 390 gallons of oil are then needed to produce one ton of paper.
Over in Europe, the figures are much higher – 12 million trees cut down to make paper-based invoices.
It doesn’t take much to see that electronic invoicing will significantly help companies lower their carbon footprint if they embraced technology as part of green initiatives.
Why should you use electronic invoice management software to streamline the invoicing process in your enterprise?
Well, as we have seen above, e-invoice software positively impacts efficiency rates, shortening the time it takes for an invoice to be cleared while also reducing human error.
The biggest bonus? E-invoicing systems are a very cost-effective solution as well.
And, what’s even better is that you don’t have to look far for all your spend management solutions because ProcurePort prides itself on being one of the leading providers of the best procurement software on the market and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
If you would like to discuss procurement software with a consultant or to schedule a demo of our solutions contact us today.