Accounts Payable (AP) represents more than a revolving door where invoices flow in and checks flow out. AP is a liability on the company balance sheet. It is money owed for goods or services rendered. The process of ensuring that balance sheet is even can be complex and time-consuming, if seemingly simple in concept. Fortunately, there are commercial off-the-shelf (COTS) applications available to help the accounting team process invoices in a more accurate, timely and efficient manner.

Let’s take a look at the top five reasons your organization should automate its manual AP capture workflow with Ephesoft Transact, a leading enterprise content capture and data discovery tool.

1. Exceptions: The Bane of a Timely Processed Invoice

According to the Aberdeen Group, 8 out of every 10 invoices a company processes has at least one exception. This can come in the form of an incorrect amount for a line item, total due, discount level or vendor company detail. And no one knows better than the accounting team that bad data can lead to disaster.

With technology that automates the ingestion and capture of invoices and other AP document types, exceptions can be identified before a clerk even looks at the document. While analyzing the textual content of a document during the data extraction step of a capture workflow, Ephesoft Transact incorporates a fuzzy database look up to ensure that vendor information such as address, ID or account number is correctly populated.

This means the accounting team can rely on technology to verify that the details provided in the invoice match the vendor’s information stored in the backend ERP system, or other similar application, instead of manually comparing the two disparate sources of information and potentially overlooking mistakes.

2. Slow Document Routing

Companies are often at the mercy of their vendors where invoices are concerned. The standardized or templated invoice is the unicorn of the AP world. And this lack of uniformity applies to not only the document itself, but also the delivery methods. Electronic delivery – email or vendor portal – allows for the most expedient processing of invoices, as the accounting department can simply open an email attachment or download a document from a queue directly. Physical delivery – snail mail or fax – leads to delays in process turnaround time.

An AP benchmark report states that it can take up to 5 or more days for the accounting department to even receive the invoice after it arrives. Despite the cross-industry effort for digital transformation of standard accounting processes, many invoices are still submitted on paper.

When you consider enterprise organizations that receive large volumes of paper documents and correspondence, delays in mailroom processing, document sorting and scanning are understandable. Fortunately, Ephesoft has an answer to the mailroom bottleneck. With Ephesoft’s platform, manual organizational processes like incoming document sorting, scanning and routing can be accelerated through automation. By performing a comprehensive analysis on the full document rather than relying on document templates or textual pattern matching, Ephesoft Transact automatically identifies the type of document (such as invoice, credit memo or purchase order), regardless of how the vendor formats their information.

Once the document type is identified, the file can be renamed and routed to the appropriate department’s folder or line of business application for processing. This means the AP team has more immediate access to invoices and related documents for review, approval and payment.

3. The Overworked AP Clerk

According to a 2017 AP report from the Institute of Finance and Management (IOFM), automation makes all the difference. Industry studies show that with little-to-no automation in the accounting department, the average full-time employee could process 1,350 invoices each year. However, with a significant amount of process automation (like machine-assisted capture and document routing), a full-time employee could process nearly 23,000 invoices annually. In fact, one of Ephesoft’s customers is able to process 135,000 invoices per year with two employees in the AP department.

With an intelligent capture tool like Ephesoft Transact, many of the time-consuming manual tasks associated with invoice receipt and processing are automated, allowing the average employee to improve their performance throughput.

For example, the process for reviewing, approving and submitting payment on an invoice may begin with a mailroom clerk or accounting employee scanning a paper document, naming the file, uploading the document to an ERP system, and then keying in index fields for document values such as “Total Due.” Only then, can all other payable activities, such as special discount validation or payment method approval, take place.

Ephesoft Transact executes these manual tasks automatically with little to no interaction required from the employee. Moreover, organizations are able to embed this intelligent capture workflow into an existing process by utilizing Ephesoft Web Services or through one of the out-of-the-box application connectors for exporting content to 3rd party applications.

4. The cost of an invoice is more than the Total Due field.

An industry survey by IOFM found that the cost of processing an invoice ranges from  $1.77 to $8.78, depending on how much or how little of that process has been automated. Considering the time spent capturing, reviewing, double-checking, and routing each invoice, it’s no surprise that the cost to process can be as high as nearly nine dollars. Or looking at the big picture, that’s nearly $90,000 for every 10,000 invoices your organization receives. Another source, Levvel Research (previously PayStream Advisors), reports that on average, invoices range from $15 for novice companies to $2.36 for innovative companies.

Therefore, it’s common sense to eliminate those repetitive capture tasks with automation tools. The less time your high-salaried AP employees spend performing manual activities like data entry and document separation, the less expensive it will be to pay your vendors. Moreover, unlike many capture tools in the industry, Ephesoft Transact is licensed by server core, not by page count. If the invoice and purchase order (PO) volume processed or generated by the AP team increases, your calculated “per page” cost of automatically capturing, categorizing and extracting data from each document will decrease.

5. Capturing Accuracy

In addition to the time spent addressing mistakes, a misplaced decimal or mistyped sum while processing invoices or – in the realm of accounts receivable – purchase orders can lead to accounting imbalances. Financial repercussions, as well as damaged customer or partner relationships, is also a common result. These are just some of the reasons your accounting team spends so much time checking and re-checking every detail of an invoice and why the cost to process each statement can be so high.

Ephesoft Transact helps minimize this risk by reducing the potential for human error during the document capture, classification and data extraction portion of the AP workflow. Machine assisted capture mechanisms like key-value extraction, pattern matching and content analysis allows for the automated indexing of invoice values. These values can then be used in downstream processes or simply displayed as metadata alongside the document in your organization’s ERP system.

There are many reasons to automate your AP process, and the Ephesoft platform can help your organization achieve those digital transformation goals to expedite and improve invoice processing. Interested in learning more? Contact us with questions or to request a quick demonstration of Ephesoft Transact classifying and extracting invoice data.

Learn more:

The ABC’s of Invoice Processing

Infographic: The Hero’s Guide to Overcoming AP Chaos

Ephesoft Transact for Accounts Payable

5 Simple Tips for Getting Started with Smart Document Capture Software