02
March
2020
|
10:22
Europe/Amsterdam

How do you turn invoice management from an administrative burden into a competitive edge?

Summary

In business, there is in fact such a thing as a burden of success: In many cases, it comes in the form of invoices – lots of them. And these invoices need to be managed. As businesses grow, so does their network of customers and suppliers. And when production chains and value creation become ever more globalised, complexity increases while regulatory demands grow. Manual processes may have taken a business so far – but at a certain point, they start to become excessively labour-intensive, error prone and act as a drag on the organisation as a whole. And they become costly: On average, it takes €8.47 to process each invoice, but this cost is more than doubled for the least effective companies.[1] The solution? Automation is key to boosting reliability and slashing the time and cost required to process invoices – and it is easier to implement than one might think. Konica Minolta’s Managed Content Services help customers take control and streamline their invoice processes with digital invoice management solutions.

In the majority of companies, Accounts Payable departments still run on manual processes that are incredibly labour-intensive. This is complex and time-consuming work and there is far more involved than meets the eye. For example, arriving invoices have to be matched with existing purchase order forms and delivery records, they are passed for approval, payment is made, and order and stock systems are updated. When the invoices arrive, be it on paper where scanning would be involved, or electronically as a PDF, some level of capture would improve the routing of the invoice, and additional information such as order number, customer reference, and even line items could be recognised and checked. No wonder, therefore, that Accounts Payable (29%) is the most popular capture-enabled process application.[2]

International business serves to compound the challenges in invoice management by adding multiple currencies, time zones and a diversity of local laws and taxation regimes. Meanwhile, the demands of auditors and regulatory compliance requirements mean that every step in the process has to be correctly handled and documented to ensure secure, accurate records that can withstand later scrutiny.

As a result, Accounts Payable processes tend to be slow, arduous and repetitive. This is inevitably fertile ground for human error and most professionals working in Accounts Payable departments will have stories of invoices being left unpaid or even paid multiple times on account of a colleague wrongly executing a simple data entry task.

In addition to such risks, sluggish invoice processing times can have a significant material impact on a company’s bottom line through interest on arrears or fees for late payment. Conversely, businesses that are behind the pace for invoice processing are leaving money on the table.

It’s also important to note the costs involved in all this human effort. The time taken to process an invoice is on average 8.8 days, with the worst performing companies taking up to 14.3 days.[3]

Of course, the key takeaway is just how much better the best-in-class companies do in terms of processing time and costs. And even more striking are the staggering improvements made possible through automation.

 

 

 

 

Taking invoicing processes into the future with automation

However, beyond this clear objective, automating the Accounts Payable process proves attractive for a range of reasons. From an IT perspective, an Accounts Payable project can be run as a closed project to very tight timescales by applying well known technologies. At the same time, the dramatic cost reductions that can be realised offer a clear business case for finance and senior leadership. For the Accounts Payable departments, these systems reduce the repetitive and laborious part of their work and can thus increase productivity and allow for focus on activities that are more strategic and valuable to the business.

Achieving operational efficiency with Konica Minolta

Konica Minolta works with its clients to move beyond the limitations of their legacy Accounts Payable processes through its Managed Content Services offering. From consulting to integration into IT systems, they offer a complete solution from a single source. Experienced consultants work with the customers to provide both strategic insight and practical hands-on assistance. Konica Minolta takes a comprehensive approach to help the whole organisation implement a highly efficient digital invoice management system able to deliver decisive competitive advantage.

Digital capture, check and approval of incoming invoices for greater transparency, speed and cost-saving

Konica Minolta’s digital invoice processing can help to save time and money by optimising business processes. Thanks to digital and automated editing, management and distribution of billing data, sources of error can be removed while also preventing the “information silos” that result from the local management of data. The solution can also be seamlessly integrated with existing ERP systems. A fully digitised workflow also helps to improve collaboration by empowering mobile workers and remote offices.

Konica Minolta’s solution offers the following key benefits:

  1. Structured capture for greater transparency

    The digital capture of all incoming invoices in the company guarantees that all invoices are displayed correctly in the system. It even makes use of existing document scanners or multifunctional systems to digitise paper documents (such digital workflows can help reduce paper consumption and an organisation’s CO₂ footprint).

     

  2. Read intelligently and distribute automatically

    Using text recognition and intelligent algorithms, the relevant billing data (delivery, date, invoice number, etc.) are read out and recorded in the system. Forwarding to the corresponding department and the comparison with the ERP system and financial accounting takes place automatically and more quickly.

     

  3. Expedited approval workflows

    Rules defined in the system regarding invoice verification and approval ensure fast and accurate invoice runs. A clear user interface makes it easy for users to process the invoices, with sub-examinations and adding comments to the documents also made possible. Account assignment stamps, manual signatures and mail envelopes therefore become redundant.

     

  4. Transparent, traceable, audit-proof

    The approval processes are logged completely and thus every processing step can be reconstructed. The status of an invoice can be checked faster and more easily when in the search for documents. Especially in terms of auditing and compliance requirements, this factor is of high importance.

 

Customer voices: TON INC.

The Czech company has been producing bentwood furniture since 1953 and preserves the same quality craftsmanship that furniture innovator Michael Thonet originated in 1861. TON’s products have won various awards, including Good Design, Red Dot Design Award and Czech Grand Design. It meets global demand through its own sales network as well as remote employees. The company needed ever-greater agility, while facing an increase of email traffic and the challenge of inefficient paper-based legacy systems that had proved a significant issue for invoice processing. In collaboration with Konica Minolta they implemented a solution that exactly matches their needs.

“We had a major problem whenever an employee was out of the office for several days and couldn’t approve or verify a particular document or invoice and we were unable to enter it in the books,” recalled TON’s Sales Director, Robert Valentík. “When I see that the managing director can now approve invoices received on his mobile phone when on business trips abroad, it confirms to me that we made the right decision.” By cutting out the burden of searching for paper documents, TON has achieved an estimated daily time saving per employee of fifteen minutes. 

Unlocking the potential

“Even now, too many businesses are effectively working with one hand tied behind their backs,” commented Marcel Cobussen. “There is so much potential in accounting departments that is squandered on repetitive and very laborious tasks. With Konica Minolta solutions for invoice processing, we can help businesses remove the financial overhead of this activity while freeing up IT and accounting departments alike.”

 

[1] Leggett & Platt® Incorporated

[2] Comspec Consulting & Konica Minolta, Improving and automating business operations through information management – a benchmarking survey, 2018

[3] Leggett & Platt® Incorporated