For people in accounts payable, the ideal workday might consist of several key tasks ranging from orchestrating invoice payments, conducting spend analysis, fostering favorable vendor relations, and so on. But instead, what many people in this position actually end up spending most of their time doing is sending invoice approval reminders over and over again, manually keying in data, fixing invoice processing errors, and the like. If the latter sounds like the cycle your accounts payable team — or your one-person financial department superstar — is stuck in and you’re ready to break free, then keep reading.
In this guide, we’ll show you several different methods for how to keep track of invoices, no matter your business size, stage, or need.
How to Keep Track of Invoices: What Does That Mean Exactly?
When we talk about “how to keep track of invoices” what we’re really talking about is the concept of invoice management.
What Invoice Management Is
Invoice management is the process of tracking an individual invoice from the time your business receives it to the time you pay it.
During this process, some of the steps may include verifying that an invoice is legitimate and correct, conversing with the right parties to get approval to pay the invoice, and recording the payment in company records to keep your overall accounting accurate and up to date.
Not only does invoice management have many moving parts, there are also many sources from which your business can receive invoices — vendors, consultants, suppliers, and more.
No matter the size of your business or whether or not you have a full-on accounts payable (AP) team, there’s a lot that goes into how you keep track of invoices. And with that, here’s why it’s time to prioritize developing a system that streamlines how to keep track of invoices in your organization.
How Invoice Management Typically Happens
Many companies have automated at least part of their accounts payable process, such as with scanning invoices. But when it comes to how to keep track of invoices, far too businesses are still doing things manually.
Manual invoice management might start with an invoice being emailed in, which AP automation software is perfectly poised and input into an accounting system. But for companies that adhere to largely manual AP processes, they might follow the receipt of an emailed invoice by printing it out and performing tasks themselves such as three-way matching invoices, purchase orders, and receipt reports, or requesting payment approvals.
The good news for companies that haven’t fully automated their AP operations is that it’s easy to pick up the baton from whatever a company has automated so far and finish the job. We’ll explore in a bit how Stampli can help make this happen.
Why Invoice Management Matters
In a short, if a business doesn’t manage its invoices effectively, those invoices might manage the business. In fact, research has found that more 80 percent of companies can be overwhelmed by invoice volume and formats.
Slipshod invoice management isn’t pretty. A company will find itself losing track of vital invoices and missing early B2B payment discounts and even regular deadlines, which paves the way for late fees. It will need weeks or months insteads of hours or a handful of days to process invoices. This can also drive up the cost to process each invoice.
Processing invoices expeditiously and cost-effectively starts with having keen focus on how to keep track of invoices.
3 Reasons to Prioritize Better Invoice Tracking
There are many steps when it comes to the invoice procesing, as highlighted above.
Of course, every business will need to put its own spin on this list, likely rearranging and sometimes even adding steps to complete the invoice management process in a way that aligns with their business needs and practices.
But here are a few commonalities among businesses for why it pays to prioritize methods for how to keep track of invoices.
1. It Will Save Your Time
An ineffective invoice management process is one that consumes a lot of unnecessary time for accounts payable staff. Staff might labor over keying in every invoice to their accounting system by hand. Or they might dread the treks down to the filing room to try to find POs and receipt reports to match with invoices.
Another vampire of time with an out-of-tune invoice management process can be waiting for approvals. A study by Stampli and AP Now found that 72% of companies experienced slow invoice approval internally on a regular basis.
Needless to say, AP automation can dramatically save time when it comes to invoice management. These days, it’s built to automatically key in invoices, match them with other key documents, and gather approvals, among a number of other time-saving benefits. Forget the malaise and redundant tasks for AP staff.
2. It Will Save Your Money
The average cost of manually processing a paper invoice is $30. Why? Lots of reasons, including employee time spent tracking down invoices, entering data, and doing rework; money spent on late fees, lost discounts, legal fines; and more.
However, with a system in place that dictates how to keep track of invoices across every team member, every time — you’ll be able to really streamline your processes to save not only time, but also money.
Top-performing accounts payables departments can process their invoices at a fraction of the cost cited above. Provided a company has a sufficient volume of invoices, AP automation software might even pay for itself.
3. It Will Save Your Sanity
Unfortunately, the majority of teams that handle invoice processes feel overburdened.
Not only are they engulfed by almost unmanageable amounts of invoices to process each day, the fact that these invoices are in tons of different formats — which is mentally taxing — doesn’t make anything any easier.
The bright spot here is that how you decide to keep track of invoices can turn a once overwhelming task into a surmountable one with tools and tricks that empower your team to handle anything vendors throw at them on a daily basis.
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