Invoice Process Improvement

 Perhaps your company struggles with late payments or days outstanding for invoices, two problems that have increased for businesses in recent years. And it’s long been clear that companies can experience a whole range of invoice-related issues, from missing data to snail’s pace approval rates.

Today, we’re going to offer a better path. Join us as we discuss invoice process improvement: a few basics of what it is; why accounts payable (AP) automation should factor in; and how Stampli can help companies thrive.

Invoice Process Improvement Basics

When we refer to invoice process improvement, we’re not just talking about whipping up slicker invoices for AP departments to send to vendors. Invoice process improvement can cover everything from when a company and vendor decide to do business to when an invoice is paid and reconciled.

Let’s look at a few basics of invoice process improvement.

Why Invoice Process Improvement Matters

The average company gets hundreds, if not thousands of invoices each month for everything from printer toner to break room coffee. A survey by Stampli and Treasury Webinars, “AP Today: Bottlenecks, Benchmarks & Best Practices” found just 8% of companies surveyed were getting under 100 invoices each month, with 54% getting over 500.

Without a solid invoice process improvement plan, serious AP backlogs can quickly start to ripple across companies.

Invoice process improvement helps keep operations running smoothly. It also helps at a tough time. PYMNTS.com noted in August 2021 that “as many as three-quarters of businesses with revenues between $25M and $100M said that late payments have been exacerbated due to the pandemic,” while 60% of small businesses had seen their days outstanding for invoices increase.

What Typically Holds Up the Invoice Process

To someone who’s never worked in accounts payable, the work might seem simplistic enough: get a bill, pay it, repeat. But invoice processing is far more complex and not surprisingly, many things can cause it to stall.

A survey report by Stampli and AP Now, “Common Invoice Problems: How to Deal with Them” quantified various invoice-related issues experienced by companies, such as:

• Slow internal approvals, experienced by 72% of respondents;
• Missing purchase order numbers or requisitioner names, experienced by 71%;
• Invoices sent to wrong people or places, experienced by 65%;
• Manual data entry required for the invoice, experienced by 50%;
• Duplicate invoice submission, experienced by 50%.

Even with smart and capable accounting staff, companies can lag and need invoice process improvement if they don’t have the right tools.

Strategies for Invoice Process Improvement

The first step in invoice process improvement is awareness, acknowledging that things could be running better. Rather than just simply flogging staff to try harder, a smarter solution is a combination of training, communication, workflow, and technological upgrades.

Companies can work to get everyone on the same page with what needs to happen when an invoice arrives. Executives, rank-and-file accounting staff, and even vendors can have shared understanding of precisely what should occur with each invoice, from when and how to match it with purchase orders and receipt reports to an acceptable number of days to get it queued for payment.

Too often, AP procedures might not be codified. Insisting on good communication and workflows helps counteract this, dictating the most logical methods for processing invoices. Companies can also take the opportunity to train staff in how to follow these workflows, with Stampli and Treasury Webinars’ survey report, “Drivers of AP Success: Metrics, Collaboration, Influence” finding that 47% of respondents were at companies offering formal training in-house.

Of course, training, communication, and crafting smarter workflows can only go so far. Next, we’re going to look at why AP automation software is needed for true invoice process improvement.