[Celebrate World Paper Free Day] 4 Steps for Going Paperless With Your Invoice-to-Pay Process
Are you tired of the mountains of paper on your desk? Are you fed up with having to search through piles of paper invoices just to find the one you need in order to make a timely payment? Are you overwhelmed and frustrated with the time you need to allocate to organizing and filing the mounds of paper once you are done handling the invoice and making the payment?
Did you say YES to any of these questions?
So, why not join millions around the world in celebrating World Paperless Day on November 4th, by finally making the decision to move to a paperless invoice-to-pay process.
But what does this mean or even entail? It is easier than you may think.
Deciding to go paperless is the first step in getting a handle on invoicing-to-pay.
Accounts payable automation system gives businesses a way to go paperless in both handling, organizing and "filing" invoices without the inundation of mountains of papers, AND also offers a way to make payments without the cost and time associated with printing, stuffing and mailing paper checks.
Need more information to help get management comfortable with fully automating accounts payable?
The following is both a template and goal-setting approach to get the buy-in at every level of the organization. It is based on recommended steps by the Institute of Finance and Management for transitioning to paperless invoice-to-pay.
4 steps (and a plan of action) for going paperless for invoice-to-pay process
1. Set realistic and achievable goals and objectives
Go for short- as well as long-term goals. For example, common goals include objectives to:
- Integrate accounts payable with other systems for quicker approval and better visibility with budgeting, inventory management, and so on.
- Eliminate manual keying and paper handling and cut down on transcription errors.
- Reduce labor costs and the drudgery of data entry.
- Enable invoice approval by employees off-site.
- Improve supplier access to invoice status for better product and inventory flow/management.
2. Clearly define the processing requirements and your people, too
Mapping current business processes can be the biggest challenge in going to an AP automation solution. This requires a thorough volume and task analysis of the invoices and other billing documents the automated system will capture and process as well as an analysis of:
- The types of invoice documents to be handled.
- The actual processing that must be done.
- The people in the organization who will participate in payment approval.
- It is crucial to involve front-line staff members in developing the functional requirements. They can provide the insights into the types of challenges they face with existing paper-based processes. Moreover, involving those who will use the new system every day is an application of the old military philosophy, "Those who plan the battle won't battle the plan."
- Also, "clearly define" means avoiding the temptation to compile haphazard checklists or nonconstructive, self-serving vendor gripes and feedback. The key is to stay on track with the system requirements most important to stakeholders and users, so they won't drive a stake into the planning effort.
3. Make a business case for paperless AP automation, and make sure it covers all the bases
The "business case" for paperless AP automation must include the following:
- Hard savings in labor costs, storing paper documents, and software licensing — that is, all quantifiable costs.
- Soft savings, such as process efficiencies, operational improvements, better customer relations, mitigating risk through fewer lost invoices, better document control and tracking, and quicker reporting and disaster recovery
- Hard and soft savings estimates need to include the spectrum from conservative to aggressive. Calculations should also include the current cost per invoice and overhead costs. Include the costs of everything involved in the current AP system down. Again, rely on input from front-line workers for the best insights on costs.
4. Plan for a smooth and quick implementation
The large majority (over 80 percent) of AP departments typically report that it takes less than a year to fully transition to AP automation. The above-mentioned white paper has this important transition advice:
- "It’s also important to deploy the system in controlled phases, rather than all at once, which increases risk. A smooth implementation has a significant impact on achieving payback on AP automation investments."
- That's why we recommend starting with the payment side. Implementation of paperless payments should minimally impact your IT resources and could and should be completed in less than 60 days.
The bottom line
Manual, paper-intensive AP processes drive up costs and errors, and add unacceptable delay in approval processes. The delay, in turn, adds decision lag time and reduced visibility to the actual financial health of the organization.
Consider these criteria in selecting a payment automation service. The service should:
1. Pay cash rebates on a monthly, rather than on a quarterly or an annual basis.
2. Integrate into and work within existing accounting standards of the existing ERP system.
3. Make the transition to virtual AP seamless, uncomplicated and manageable.
4. Minimally impact the AP team and not be perceived as a system with a high learning curve.
Subscribing to a paperless, payments system including virtual credit card payments is the one and final step in migrating from paper-based, ERP-constricted payments.
Find a system that is turnkey, which is bank-independent and can accommodate both Automated Clearing House payments and fund wire transfers.
- 5 Myths Holding Companies Back from A/P Automation
- How Payments Impact Your Business and Relationships
- Virtual Cards - When You Don’t Use Them, You Miss a New Revenue Stream!
- Top 5 Reasons to Automate
- Is Converting to ePayments Worth the Investment?
Want to learn more?
OnPay Solutions is the provider for paperless accounts payable payment automation that meets the above criteria. Get in touch with the OnPay team, and see why our clients rely on OnPay Solutions to enable their accounts payable automation.