The tip of the iceberg
So, what do I mean by touchless invoice processing? The definition of a touchless process is that there is no manual input required at all from the time the invoice arrives to the time it is posted to the ERP. In other words: no manual work by the AP department, nor by anyone else in the organization.
This means the invoice will be automatically matched against a supporting document (purchase order, goods receipt or contract) and sent for payment with no human touch whatsoever.
The obvious benefits, and the benefits usually discussed, are shorter lead times and less manual work. And most companies find very attractive business cases to automate their AP process by that alone. But once companies have reached a certain level of automation, they realize there is more where that came from.
It’s what’s below the surface that really matters
What is interesting is that the best-in-class companies see other, even more important benefits that add value for their business in a tangible manner.
1. Improved forecasting
Shortened lead times and automated coding support enable more timely and accurate financial and cash flow forecasting, which in turn has a positive effect on monthly and annual closing procedures.
2. Accurate pricing and cost analysis
With an automated, accurate and detailed invoice process, companies see a great opportunity to make better decisions in supplier selection, pricing of their products and cost analysis because of the more detailed and structured cost allocation to items.
3. Less errors
Companies with a high automation rate will reduce the errors made in a manual process, creating time for higher value activities rather than backtracking and correcting mistakes.
4. Cash discounts
For some, what matters most is their ability to capture cash discounts from suppliers by paying invoices rapidly. One of our clients reported that the cash discounts that they had been able to realize after implementing MediusFlow would cover the investment in less than a year.
What values do you see for your company? I would love to discuss your challenges or experiences on this topic. Feel free to get in touch (my contact details can be found below).
Also, if you want to learn more about how to take touchless invoice processing to the next level, check out this webinar recording where I discuss key KPIs to measure and tactics to deploy: “How to reach 95% touchless AP invoice processing