Why You Should Switch To An Automated Invoice Processing Solution

An invoicing automation solution is a software solution that automates the collection and processing of invoices , which includes matching invoices with purchase orders, sending them for approval and payment, and accounting for them in the general ledger.

Can invoicing be automated in all types of businesses?

Yes, from restaurants and pubs to startups and accounting firms, there are many businesses that have switched to an automated invoice processing solution to save time and money. If you're running a small business and don't have many employees, then it might not be necessary for you to use an automated invoicing solution because it would take too much time to learn how to use it properly. But as soon as your business start growing and you start considering hiring an accountant,

Manual invoice processing is a time-consuming, inefficient, and costly process that holds back small businesses. Small-to-mid-sized organizations that rely on manual methods take between 10 and 25 days to process an invoice from receipt to payment.

A manual invoice processing system is slow and inefficient because it requires people to manually enter data into multiple systems, often resulting in human error or confusion over what information needs to be entered where. Data entry alone can consume the majority of time spent on accounts payable, and 20% of invoices are paid late; this often incurs financial penalties.

Meanwhile, companies with automated workflows take just 5 days — an improvement of nearly 90%.

Not only manual invoice processing is a huge time drain, it can be costly too. In fact, the average cost of manual invoice processing is between £4 and £25 per invoice, according to research firm Gartner. That includes staff costs and auxiliary expenses such as stationery and postage, storage, late fees and lost discounts. That's a lot of money that could be used elsewhere in your business.

On top of the "What are the benefits of automated invoice processing?" question is cost reduction. According to Levvel Research, an AP automation solution like Libeo helps teams save £13 on average for each invoice processed.

Automating accounting systems can save accountants and businesses a substantial amount of money. The investment pays for itself in as little as 18 months, MHC A.P’s accounting software statistics shows.

Automation further minimizes the chances of human errors and inaccurate calculations. The benefits include:

• Increased productivity and accuracy
• Reduced need for manual entry of data
• Reduced costs, since you no longer have to hire additional staff to process invoices.
• Improved customer service, since you can respond faster to questions or concerns they may have.

Sage Practice of Now 2020 reveal that, out of the accounting professionals who already use automation, 41% said it had made their staff more competent and confident. 35% said updating their technology had helped them keep pace with client expectations and increased retention rates by:

• Automating tasks so they're not spending time doing repetitive work.
• Setting up invoice approval workflows and automation rules for recurrent payments.
• Freeing up staff for other roles, such as advising clients or working on statutory accounts.
• Reducing errors due to human error or lack of knowledge.
• Streamlining processes by automating tasks so they happen at the right time.

Invoicing is a critical function of any business. But between external and internal fraud, late and missed payments, errant forecasting and lack of audit trails, to say that these processes are challenging is an understatement.

That's why companies are increasingly turning to automation to help streamline their invoicing processes and make sure that their billing departments are always up to date with their customers' payment status.

By reducing the time spent on paperwork and accounting, invoicing automation allows companies to increase their profit margins and spend more time on core business activities and your company faster.

Report from Xero shows that companies that exclusively use cloud accounting add five times the number of clients than companies that do not exclusively use cloud accounting.