Invoice management is often a bane for a small business, frequently creating challenges at the last minute between retaining sufficient cash flow and keeping suppliers happy with timely payments for goods or services provided. For the most inefficient small businesses, the processing time to take an invoice from receipt received to actual payment issued is an average 16 days. At the same time, the cost in labor expenses for processing reach as much as $12 per invoice. That’s an expensive amount of work for what should take only a few minutes to review, reconcile, and pay off.
So what’s the hold up if a company has sufficient reserves to pay an invoice timely? First off, culture is a big issue. If company staff don’t take the accounts payable process seriously, their employer is going to suffer the effects with unhappy suppliers. Second, having too many hands in the cookie jar makes things complicated. There should be one office to process invoices in a centralized manner. This ensures better internal control, batch processing, faster verification against supplier records, an easier reconciliation processing for funds balancing, and a reduction in fraud due to avoiding decentralized duplication. Finally, being unable to integrate invoices with ordering means people are guessing what they need in supplies versus knowing accurately what is necessary. The difference can be big and costly.
An ERP system like Microsoft Dynamics GP solutions can resolve much of the invoice processing logjam, and now small businesses more than ever can access ERP tools that are affordable and flexible. ERP solutions can provide:
- Easier invoice visibility and tracking
- Faster identification of outstanding A/Ps due
- Easier cash flow management
- Increased coordination between programs sharing invoicing data
By creating networks that enhance internal relationships, the familiar boondoggle with paper-based invoice processing and routing starts to disappear. Instead, all hands on deck are involved, and invoices are identified, reviewed, scanned and processed in hours and days versus weeks. For small businesses who rely heavily on their supplier relationships to carry them, these ERP solutions can literally re-engineer a company.
Source: Aberdeen Research