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, this requires personnel 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, which adds time and confusion to the process. Once in the right hands, to get the invoice into the organization’s financial system, the invoice data will have to be manually entered and the documents will need to be scanned and uploaded, which requires a tremendous amount of time and effort.
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 doing it manually. This process may entail one or more full-time employees dedicated to entering and reconciling hundreds or thousands of invoices on a weekly basis. Fortunately, advancements in technology, including the widespread use of the cloud and increased accessibility of e-procurement solutions, are changing the dynamics for invoicing.
EqualLevel’s e-invoicing solution provides a way to seamlessly and electronically exchange invoices between software systems and automate 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 technical sophistication of the supplier, greatly simplifying the process.
The e-invoicing solution may be integrated with the organization’s existing accounting or enterprise resource planning (ERP) system to replace a cumbersome, paper-based invoice approval process with an efficient 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 preset exception rules, such as invalid invoice items, tax or shipping incorrectly being added, or 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 approval for payment.
Options for transmitting the 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/.