In far too many organizations, the invoice reconciliation and approval process within the Accounts Payable department is the most laborious, time-consuming, and error-prone step of the procurement cycle.
Many organizations still rely heavily on paper and manual processes for their accounts payable, including managing invoices that are often received via email, regular mail, or fax. In some cases, personnel are required to be on-site, which can prove difficult during times of remote work. Even when invoices can be provided via email or fax, they may be sent to the wrong person, adding even more time and confusion to the process. Once in the right hands, to log the invoice into the organization’s financial system, the data is manually entered and the documents are scanned and uploaded. It is a tedious and cumbersome operation.
The sheer volume of invoices and the variety of sources that they come from make the accounts payable process a daunting task for organizations that are still utilizing paper documentation. It’s often required that one or more full-time employees remain dedicated to entering and reconciling hundreds or thousands of invoices on a weekly basis. Fortunately, advancements in technology, namely the widespread use of cloud computing and increased accessibility to e-procurement solutions, are changing the dynamics for invoicing.
EqualLevel’s e-invoicing solution provides a means to seamlessly and electronically exchange invoices between software systems and automate key portions of the invoice reconciliation process. With e-invoicing, suppliers may generate an electronic invoice from their own system, or from a system made available by the e-procurement provider who services the buying organization. All invoices can then be sent electronically, directly to the buying organization’s e-procurement application, regardless of the supplier’s technical sophistication, greatly simplifying the process.
The e-invoicing solution may be integrated with an organization’s existing accounting or enterprise resource planning (ERP) system to replace an inefficient, paper-based invoice approval process with a convenient online system. The invoice reconciliation and approval process may take place in the e-procurement system, the organization’s ERP system, or in both through a two-step hybrid approach. In the hybrid approach, the e-procurement system will match the invoices and automatically reject those that violate predetermined exception rules, including but not limited to invalid invoice items, incorrect tax or shipping additions, and substantial price increases. Invoices that pass these initial rules are then transmitted to the ERP system for final reconciliation, where less critical exceptions can be routed for manual review before payment approval..
Options for transmitting invoices to the ERP system will depend on the flexibility and robustness of the solution from the e-procurement provider, but some possible options include sending the invoices via cXML, pulling the invoice data via an API integration, or an automated export/import of an invoice data file.
Automating this process helps organizations more easily manage the entire invoicing lifecycle. Some of the key benefits of e-invoicing include:
- Automating the invoice entry and reconciliation.
- Receiving structured and uniform invoices.
- Reducing data entry and document handling costs.
- Reducing errors caused by manual data entry.
- Monitoring transactions in real-time.
- Slashing the invoice processing time.
- Eliminating late payment charges.
- Taking advantage of early payment discounts.
Digitizing the invoicing process streamlines the entire workflow and frees up valuable time for financial professionals to spend on more strategic tasks.
Are you ready to get started? For more information, visit https://equallevel.com/invoice-reconciliation/.
