Small- to medium-sized businesses (SMBs) could be losing thousands of dollars every month due to inefficient invoice processes, according to a new study which found that invoice duplication alone can cost a typical SMB more than $12,000 every month.
According to the study by US expense management services provider Concur duplicate invoicing is a big problem in the SMB space.
“When businesses accidentally pay the duplicate invoice, the costs mount up fast, not just in terms of overpayment but in the time it takes to rectify the error. SMBs need to focus on growth and profitability; paying duplicate invoices is a burden they need to avoid,” says Matt Goss, managing director, ANZ, Concur.
Concur maintains that automating invoice processing and disbursements with a single system for managing all business spending can help avoid unnecessary costs, while saving SMBs time and money.
{loadposition peter}And Concur says paper-based invoices create hidden costs around manual processes, errors, poor cash flow visibility, ineffective spend management, too many exceptions, increased risk of fraud, and fragmented systems.
“Automation lets accounts payable departments extract data from invoices received in any format, from any location. It can match invoices with purchase orders or receipts, electronically route them based on pre-set workflow rules, initiate payments, and provide reporting. This process virtually eliminates the risk of paying duplicate invoices,” Concur says.
“Automating invoices instantly reduces the cost of processing them by between 30 to 50 per cent, according to AIIM research. Then, when you add in the savings delivered through fewer overpayments, SMBs are starting to look at some very significant savings,” Goss says.
“If automation reduces invoice processing costs by 30 per cent, then a business processing approximately 10,000 invoices a month at an average cost of $10 per invoice can save approximately $300,000 per year. According to Aberdeen Group, combining automation with best practice delivers even bigger savings: it costs best-in-class organisations an average of just $3.34 to process a single invoice from receipt to approval.
“SMBS often operate close to the bone when it comes to cash flow. Reducing costs through automation and avoiding double-payments can make a big difference to cash flow,” Goss concludes.