How invoice automation can help you create a paperless office
Despite easy access to document processing technologies, the paperless office still seems as futuristic to us as, say, artificial intelligence (AI) did to moviegoers in 1968. If you’re interested in completely digitizing your business, you can do so right now. Even if you haven’t given much thought to paperless workflows, you may want to know about the benefits they can create across your company. In this post, we’ll explain what eliminating paper can do for your company. You’ll also learn how to kickstart your paperless initiatives with invoice automation and improvements to your accounts payable (AP) processes.
Imagine your business was 100% paperless. Before you continue reading, take a moment to picture your work environment completely devoid of printouts and copies, staplers and paper clips, and printers and shredders. No file cabinets, no magazines or newspapers lying about on desks or the reception area. You can’t avoid mail, but let’s say you scan and recycle all paper invoices, receipts, and other business documents as soon as you receive them.
Whether you find this easy or difficult to envision, you’ve probably got an idea of the advantages of such a scenario.
That ’70s Paperless Office
Office automation is far from a new concept. In 1975, BusinessWeek published The Office of the Future, “an in-depth analysis of how word processing will reshape the corporate office.” At the time of publication, office automation had taken the corporate world by storm in just months.
Many industry leaders were making predictions that seemed bold, even brazen, at the time. A few examples:
George Pake, Head of Xerox Corp.’s Palo Alto Research Center: “I’ll be able to call up documents from my files on the screen [of a TV-display terminal], or by pressing a button. I can get my mail or any messages. I don’t know how much [printed paper] I’ll want in this world.”
Vincent Giuliano, Arthur D. Little, Inc.: “The use of paper in business for records and correspondence should be declining by 1980, and by 1990, most record-handling will be electronic.”
The article indicates that an equal number of experts believed the transition to the paperless office would take quite a bit of time, but even they may have expected automated document processing to be commonplace 45 years into the future
The Importance of Office Automation
Your company can gain multiple benefits from going paperless, some of them more obvious than others.
Cost savings and increased profitability
Ultimately, the biggest issue with paper-based systems is the cost. Your filing system requires investments in equipment and materials like file folders, cabinets, and shelves. Printers need ink, maintenance, and, of course, paper. You also need to factor manual labor into the total cost of operation (TCO) of paper-based processes.
Automation helps reduce this TCO dramatically, with cost savings potentially translating into higher profit margins.
Time savings and increased productivity
Manually organizing, processing, updating, and recovering paper documents is dull, resource-intensive work. Lost, misplaced, or damaged documents can take up a lot of valuable man-hours that could be better spent creating value for your company.
Digital document processing solutions create opportunities for several functions in your organization to play a more active role in helping your company achieve its business objectives. For example, automating your accounts payable (AP) workflow frees financial experts to focus on value-generating activities including
- improving spend management
- strengthening vendor-customer relationships
- driving financial visibility to stakeholders
Paper production continues to take its toll on the environment. The process consumes an obscene quantity of fossil fuels and water, and is a key contributor to deforestation, air and water pollution, and, ultimately, climate change. Even if you’re recycling religiously, a lot of people and organizations are not. You also need to take the effects of inks and toners into account, as most contain environmentally-unfriendly chemicals.
When you reduce or eliminate paper from your operations, you decrease your company’s carbon footprint. This can be valuable to corporate social responsibility (CSR) initiatives in your marketing, recruiting, and stakeholder relations strategies. If you’re based in the US, going paperless could earn you tax breaks – visit the US Department of Energy to see the tax credits and rebates you could be eligible for.
Why start your paperless initiatives with AP?
For many companies, invoices are the most common type of business document. Depending on the size of your company and the number of vendors you work with, your AP team could be receiving hundreds to thousands of invoices every month. While they may be receiving a lot of these documents digitally, they’re probably also getting a large quantity in paper format.
The hazards of traditional invoice capture methods
The process of scanning invoices and either entering data manually or capturing data with a template-based OCR system is costly, inefficient, and error-prone. This can have a negative impact on other business operations; for example, delayed payments can damage vendor relations, resulting in late or canceled delivery of goods or services, which can set production back, leading to postponed or canceled releases. Continuing this sequence, you could also end up wasting marketing and PR budget, disappointing customers, and harming your company’s reputation.
A better AP process leads to better business
Invoice automation technologies can help you avoid this nightmare scenario while streamlining your AP workflow cost-effectively. You’ll also improve accessibility to invoice data for other teams, including:
- Customer Care so they can check claims for exchanges or refunds
- Supplier Relations so they can investigate claims for missed or late payments
- Financial experts when preparing reports for auditors and tax authorities
Reducing paper, one department at a time
Once you’ve reduced or eliminated paper from the AP process, you may notice opportunities to do the same in other operations that require document processing, including, but not limited to, Accounts Receivable, Legal, and Human Resources functions.
Before you transform your AP process
To get an idea of what a paperless AP process can do for your company, you can give our cognitive data capture solution a try right now. Once you’re ready to make the switch to automation, there are a few steps you should take to ensure the transformation delivers on all its promises.
Determine your KPIs
To start, establish your KPIs. For AP, you’ll want to look at the following:
- Average time it takes to process one invoice
- Average monthly number of invoices processed per employee
- Days sales outstanding
- Invoice exception rate
Evaluate your current AP process
Break your entire AP process down into basic steps, from invoice receipt through data extraction to reporting. Look at details like how long it takes to complete each step, the quality of the output, and the required resources. This will help you identify where errors and/or bottlenecks may be occurring.
Identify opportunities to reduce or eliminate paper within AP
You may be in a position where you can get vendors to switch from paper to digital invoices. If not, you could work with your AP team to set up a digital workflow that starts with scanning paper invoices on receipt, or on a specific day of the week or month.
How to automate AP effectively
Implement PO matching
A PO matching system delivers many benefits, such as stronger fraud prevention, accelerated approval, and increased transparency in reporting. An automated invoice processing solution that takes care of this can recover a significant number of man-hours.
Work in the cloud
A cloud-based invoice processing platform facilitates efficient cross-functional collaboration, saves you the time and trouble of backing up your data, and offers security that is superior to that of corporate servers.
Get IT involved
Your colleagues in the IT department can support you in calming any security concerns you or other decision-makers may have about a cloud-based invoice automation platform. They should also keep you on top of the solution’s integration with your business systems, such as your accounting software and enterprise resource planning system. This knowledge will help your AP team better support other departments following onboarding.
Choose the right automated invoice processing software
Rossum can help your company go paperless with its automated invoice processing solution. In addition to cost-effectiveness, Rossum meets the fundamental criteria that ensure a successful transformation: the platform is easy to integrate into your business operations and its intuitive UI ensures fast onboarding that requires little to no training.
Kickstart Your Paperless Initiative with Invoice Automation
Going paperless seems like a no-brainer. The gains in efficiency, productivity, savings, and sustainability are clear, and the technology is available right now.
You probably need to keep hard copies of certain documents for legal or historical reasons, so a 100% paperless office may be unrealistic at the moment. However, office automation can eliminate enough paper usage to get you close to the ideal. The transition to this near-total digitization will take some time, training, and the right tools.
You may want to start with the digitization of paper-based AP processes. The far-reaching benefits you gain doing this could help drive the automated processing of other documents. With a Rossum Dedicated AI Engine, you can move beyond invoice automation to completely paperless document processing across your organization.