Are you fed up with manual accounting processes and paper invoices? Once seen as a task-focused cost center, accounting has transformed from a tactical to strategic enterprise and is now expected to contribute to the company’s bottom line by driving savings through discount capture, penalty avoidance and lower labor costs.
Paper processes can make it difficult for accounting departments to achieve these goals. Paper invoices that are passed from desk to desk for approvals can easily get misplaced and can take weeks to process; manual accounting systems, which rely on human accuracy, are prone to errors; and gathering the right information to close books each month or in the event of an audit takes longer without systems that easily surface the right information. Here are five reasons to say goodbye to manual accounting processes:
Paper invoicing requires more hours to manage
In addition to mail handling and data entry activities and costs, each invoice being sent out requires a cross-reference check to ensure accuracy, which entails a manual comparison of the invoice to a PO or contract. Invoices can also require multiple levels of approval, and sending a paper invoice manually from desk to desk can take weeks. By automating this processes, invoices can be referenced and scanned on receipt and then attached to electronic forms that route the invoice to the right people for authorisation. Once approvals are obtained, the information is then sent to a financial system for payment. This can reduce the time needed to process invoices from weeks to days or even hours.
Multiple sources increase the chance of error
Invoices requiring manual processing can come through a variety of sources: mail, email, courier, fax, Web-based forms and other electronic formats, each of which needs to be manually integrated into one core system. This not only adds to the processing time, it also increases the chance that mistakes will be made, like paying duplicate invoices, paying invoices for which the goods or services haven’t been delivered, paying incorrect amounts, or paying an invoice too late, which can result in late-payment penalties or losing early-payment discounts. An automated invoice process ensures that invoices can be processed and accessed from a central location, reducing confusion and the chance of error.
Paper invoices are hard to monitor
We’ve all done it: there’s a bill you have to pay, but you’ve brushed it to the side and then – lost it. In today’s fast-paced work environment, it’s all too easy to misplace a hard copy. This can result in valuable time spent fielding internal and external queries about payment status. It can also burn bridges with valued suppliers who get fed up with late payments. Automated solutions can help by providing customisable electronic forms that keep information from getting lost in the shuffle, as well as alerts and notifications that help you remember when a payment is due. Some also provide advanced escalation capabilities that automatically reroute an invoice to another employee or back to a manager if an invoice is not processed within a designated time period, ensuring that payments are always made on time.
Audits are a nightmare
Audits are the bane of every organisation’s existence, and paper-based processes make it even worse. Digging through files drawers to find the right information and pull it together for auditors is time that could be saved with electronic forms that can be accessed from a centralised location. In addition to forms, some automated solutions also come with auditing capabilities that automatically track all steps within an accounting workflow, including when an invoice was sent, received, approved and paid; who completed each step in the process; and how long it took for each step to be completed. Having this kind of information readily available can make it much easier to gather the information auditors need to complete their assessment.
Inaccurate budgeting and forecasting
Not having easy access to information can also make it difficult provide accurate budgets and forecasts. Some automated solutions come with out-of-the-box reporting capabilities that give you transparency into your accounting processes, making it easy to see how and where money is being spent. This makes it possible to see where the organisation can eliminate inefficiencies and cut down on costs. Detailed reports also provide the information needed to more accurately predict budgets for the coming year and keep track of how the business is performing year over year.
Work smarter, build faster
K2 makes it easy to build accounting solutions to fit your company’s needs through no-code visual tools that allow you build and deploy applications in minutes or hours instead of weeks and months, so you can start seeing immediate benefits. Once your solution is up and running, leverage your investment to automate other business processes, such as employee on-boarding, travel authorisations, vacation requests, and case management and compliance. Your business, your way. With K2, the possibilities are endless.