Even with superior electronic technology already taking over the invoice management operations with improvement in speed and security at a very cheap price, many businesses are still hanging onto the traditional paper-based Invoicing. This article is aimed at acknowledging such businesses the most common problems that they can avoid if they drop Paper-based Invoicing. Taking up the inherent part of businesses, invoice processing is still manual with the use of PDFs for sending and receiving invoices. Businesses will also have to hassle much and spend more on resources, causing delays in invoice processing and hindering cash flow visibility.
Being time-intensive and error-prone, the cycle time for paper invoicing is too vast with imperative steps that make digitization much sense. Even with all the excellent work put forward by each business, an improperly-working invoice functioning can spoil the whole business results. Being the foundation of your business, invoicing demands accuracy and timeliness, leading to late payments for the products or services negatively impacting the cash flow without ensuring compensating employees or covering the overhead. The errors thus left behind increase the customer’s suspicions about the business practices. OURS GLOBAL’s Finance and Accounting Services helps businesses in eliminating invoice errors, instilling proactive steps for eliminating all possible invoice errors with unerring confidence over their customer bases.
Following are Nine Problems That Businesses Face With Paper-Based Invoicing:
1. Missing Invoices
Businesses can never guarantee the payments for their products and services if the invoices are not directed to intended recipients. Incorporating net 30 payment terms with clients, businesses won’t receive automatic confirmations of the receipt. After a month or so, businesses won’t realize their invoices are missing negatively impacting cash flows. This is a clear indication that businesses will have to start the whole invoicing process all over again. Application of financial software to such accounting requirements helps businesses to automatically mail or send invoices directly to the right clients. This will also alert businesses whenever customer invoices are opened or viewed. Making sure the email addresses associated with each customer account is correct and time-to-time checking of unviewed invoices. Thus businesses can ensure businesses their clients are getting received or unviewed invoices. The use of automated systems can set red flags and alert businesses of unviewed invoices over a certain time period.
2. Confusing Invoices
Businesses must always strive in making their invoices confusing for clients. The languages used by business invoices are not clear enough for their clients as they are forced to have a different perspective. This niche of confusion over invoices can lead to problematic scenarios especially for businesses who deal with multiple different products for the same customers and invoicing them multiple different times. Using a clear possible language along with the invoicing format with the original purchase order (PO), job quote, or other documentation to come up with your descriptions helps in making understandable invoices. This clear understanding will also ensure approval processes to be more smooth as the approver and accounting department will have a clear view of the payments.
3. Missing Data
On-time invoice payment and achieving additional human intervention require the invoices to have optimum accuracy. If a customer finds it hard for processing invoices or finds missing data in them, there’s a quite probability that they will fall back without payment, until someone associated with the accounting department figures out the whole problem. Without indicating details such as upon receipt for the due date, businesses must choose to be much specific in communicating through invoices. With such an approach, businesses can guide their clients to effective management of their payment schedules without worrying about the due dates. Thus all details such as discounts, incentives, late payments, and type of payments accepted will nourish the client-business relationships. The cruciality of making business data consistent and updated with an enterprise resource planning system, helps businesses to be aware of issues if any. Such automated systems can notify businesses of varied types of issues and help them in reviewing and assure all fields have relevant and logical information, even before being forwarded to clients.
4. Errors in The Invoice
Business processes are always prone to mistakes and it’s best for itemizing services that team members are required to perform and have an accurate realization of how invoices should be submitted in specific ways. There are also chances that businesses will charge twice for the same product/service or comes with errors. Using an automated financial platform will nurture efficiency across accounting processes, and ensure vacant fields in forms, and incorporating customer-specific requirements. Double-checking while management of invoices. This can also reduce remittances and delay invoice errors.
5. Recurring Invoice Mistakes
Incorrect variations on pricing, math, missing payment, due dates, and other oversights will make businesses subject to payment delays. With such mistakes happening over, again, and again, it’s much probable that the customer base will move towards the distrust towards the brand. These problems curb up valuable business time in identifying the problem, affected cycles, calculation of necessary adjustment, and taking steps in the prevention of its future occurrence. This can assure businesses to avoid even the unintentional errors preventing damage to client relationships. Safeguarding the reoccurrence of common errors demands the businesses be compiled root causes from the problems. Thus having second checks over accounting information even after the accounting procedures will nullify all common problems. This will also make businesses maintain happy customers who drive prompt payments.
6. Wrong or Missing Contact Information
Wrong and missing information catered to the wrong clients will lead to invoices that never get paid. To overcome this problem, most businesses assign specific employees or email boxes for receiving all incoming invoices. Only in large-scale businesses, these requirements are catered to appropriate corporate divisions. Payment expectations of invoices over 30+ days will require a month minimum just for identifying the problem. Businesses can solve this issue with proactive confirmation and reconfirmation while assigning recipients for invoices. This must be done even if businesses have already assigned multiple professionals for accounting as per diverse products & services. By reviewing and updating contacts on a regular schedule every six to twelve months, businesses can avoid the issue.
7. Labor Intensiveness
Businesses spend huge time on paper handling, data entry, manual cross-reference for validity. Quite a time-intensive as AP professionals are required to compare invoices with a PO or contract. The unavailability of such information will force businesses to divert it to responsible authorities for cross verification. With respect to the firm size, there can be vast invoices that should be sent around the firm and can be waste of time for personnel involved.
8. Difficulty in Monitoring
Loss of invoices is quite normal. Unless paper invoices are stored in the right place or converted to files, businesses are prone to get lost in their data. AP personnel have to give much attention to monitoring each invoice and also spend much time tackling queries from suppliers about payment status. With an integrated P2P process, businesses can compare order data, advance shipment notice, goods receipt, and invoice data for easy identification and automation. Businesses can attain more efficiency across their accounting processes with this approach with a significant reduction of processing times.
9. Lack of Transparency
With a lack of transparency, varied business departments will have unclear invoice processes without having knowledge of its current status. Being not aware of the status of individual stages and the time frame involved for the supplier and customers will lead to inquiries. This will also burden the whole accounting process and delay the whole process. Invoicing solutions help businesses to make current invoice status for transparency among all parties, indicating potential errors and appropriate corrective measures. Thus businesses can maintain higher levels of transparency, efficient and faster & improved accounting processes.
Businesses if find competency in addressing such invoicing mistakes & errors by incorporating digitized invoicing can easily drive efficiency across their accounting processes. Addressing such errors will improve cash flow and the bottom line as businesses can be aware of the negative impacts of their customer relationships. We believe our efforts to sideline invoicing issues can help businesses in improving their customer relationships and running a profitable organization. OURS GLOBAL’s Finance and Accounting Services will compile critical information from the preceding documents, shipping notifications, and goods receipts, eliminating errors by pre-attribution of corresponding invoice fields accelerating processing, clearance, and payment. Ping us right away!