Timing is everything. From philosophers to athletes and business writers to investors, many a wise person has quipped about the importance of timing and bemoaned that lost time can never be reclaimed. In business, one place it’s universally true is invoice processing. Timing is critical to good cash management, and the costs resulting from lost time can never be recovered.

Ideally, payments are processed at the last possible moment to capitalize on pre-pay discount opportunities and to maximize positive cash flow—without missing deadlines that could result in penalties. Yet despite carefully laid plans, typically there are hidden expenses. The Institute of Management Administration (IOMA) reports:

Organizations typically spend $15-$25 to process each invoice, largely due to labor costs;

25% of all invoices are paid late, many resulting in penalties, late fees, or cessation of early payment discounts;

Nearly half have one or more discrepancies requiring resolution (contributing to high labor costs).

Navigating the sea of diverse documentation—paper, faxes, email attachments, and online forms— takes time. Many A/P departments are being asked to process more with fewer resources, yet they are receiving an increasing volume of documents and diverse formats as time goes on. Invoicing is more taxing than ever.

To avoid penalties, vital information must be extracted quickly and accurately, matched with supporting documents, and processed swiftly. Duplicate invoices must be identified and addressed; discrepancies must be resolved.

Technology offers significant improvements. Using and re-using captured data promptly, meaningfully, and repeatedly—wherever it has value—promotes invoicing speed and accuracy. Its efficacy depends on well-deployed browser-accessible electronic document management (EDM) and business process management (BPM).

The value of document management and BPM

EDM software ends manual hunts through disparate systems, centralizing access to diverse documentation and making it instantly available to those who need it. It lets you electronically gather, index, and store invoices digitally, capturing important information on each invoice or associated document and making it accessible from authorized workers’ desktops or preferred digital devices. Vital information such as supplier names and codes, invoice amounts, and due dates are extracted and stored so workers can search, access, and use it effectively as needed. Supplier contracts, receipts, and other items are available to authorized persons for review, editing, or action, adding convenience and saving time.

Business process management (BPM) takes efficiency to the next step, making data you extract from your documents dynamic and useful. Following your business rules, BPM automates unwieldy processes:

prioritizing invoices based on deadlines and early payment discount opportunities;

matching and packaging invoices automatically with supporting documents;

packaging and routing invoices and documentation to appropriate supervisors for review;

re-assigning work in response to deadlines, absenteeism, and alternate approval hierarchies, ending bottlenecks and ensuring timely processing.

Automating business processes puts an end to wasted time searching for files and extracting needed information. Instead, BPM mines the data for you. It pulls relevant information into the invoicing process at the appropriate time—sequentially—so workers who need it can complete their tasks in the right order, quickly. BPM eliminates the need to manually extract and reenter information into multiple applications for other processes that benefit from the same information. Data is used and re-used meaningfully wherever you dictate it’s required, saving time and eliminating errors. Problem invoices are quickly identified, allowing more time for research and resolution. Potentially fraudulent invoices are flagged during the verification and matching process, reducing the likelihood of fraudulent payments. Productivity swells; errors wane.

Routing for approval

Mailrooms sport a variety of invoices that must be sorted, categorized, logged, and routed to appropriate personnel for approval, signatures, or other actions. Although it’s a necessary part of the invoicing process, precious resources are wasted pulling everything together. Let’s consider routine invoices requiring a director’s approval:

A designated employee prioritizes invoices, deciding which are most urgent, and tackles those first.

The employee searches for the relevant purchase order for each invoice, along with emails and other pertinent records that confirm invoice validity and accuracy.

Relevant documentation is collected and consolidated, along with packing, delivery, or purchase receipts, and forwarded for review and sign-off. Data is extracted manually from documents in multiple repositories, email and software systems, fax logs and contract management systems, slowing turnaround.

Missing documentation inevitably results in delays and denied payments.

In contrast, integrating your A/P software with an EDM repository and other systems housing relevant information gives you centralized one-click access to all relevant documentation. After invoices are scanned/ imported and indexed, BPM alerts the supervisor that an invoice is ready for review via email, including a link to the invoice. Image enablement displays all pertinent documentation (receipts, packing slips, etc.) that is needed to approve/reject invoices or initiate exception processing. General ledger codes, signatures, and other criteria your company requires are assigned and within seconds the invoice is sent onward for processing, or to an exception queue for personalized follow-up. Workers have access to everything without leaving their familiar applications.

Browser-based EDM and BPM make invoice processing fast and convenient. Workers can import and scan documentation at the point of transaction; supervisors approve time-sensitive payment requests wherever they are, 24/7. No more delays.

The result: All the information each worker needs is available in one place with a few mouse clicks, letting staff accomplish their tasks quickly and effortlessly.

Finding discrepancies

Even though invoices and supporting documents come in multiple formats, after they are stored and indexed digitally, BPM can work efficiently with the document contents. Using the information stored in EDM, BPM can match, compare, and note discrepancies between invoices and supporting documentation, forwarding cases that display inconsistency to appropriate queues for handling. Invoices that result in exact matches can be automatically routed for processing. This saves time and eliminates the possibility of faulty or incomplete documentation being sent to a queue for approval and payment. By streamlining the number of human touch points and letting the BPM work with the raw data, fewer mistakes are made and significant time is saved.

The result: You provide better, faster, and more responsive service for a lower cost.

Processing payments on time

BPM follows your business rules and drives payment processing forward logically based on the data it receives. No payments are made too early or late. Invoices are automatically prioritized and forwarded for approval and payment at the right time, maximizing revenue and eliminating the risk of penalties. Instead of sifting through paper and using electronic spreadsheets and other systems to sort manually mined invoicing data from faxes, email attachments, and online forms, BPM extracts pre-specified elements such as due dates and terms of payment, using the data to drive processes forward. Check images and other proof-of-payment documentation are stored in EDM for instant reference in the event it’s needed, completing the information circle. A clear trail of access and transactional activity is available at any point in the process.

The result: Accurate and timely payment processing, stronger cash flow, easier compliance, and clear audit trails.

Summary

Making all of your information instantly, yet securely available—whenever and wherever it’s needed—helps people to do their jobs efficiently and cost effectively. Meaningful use and reuse of the vital data in your documents dramatically increases information accuracy and sound decision making. By directing the flow of work and using BPM to ensure your rules are followed consistently every time, errors are avoided. Accurate and timely payment processing maximizes your revenues, increasing profitability.

Swim against the tide of rising invoice processing costs. If you put technology to work, you can remove the burden of time-consuming and unwieldy paperwork from your staff so they can be more productive and you can compete cost-effectively. After all, timing is everything. With EDM and BPM on your side, your timing will be tough to beat.