The dematerialization of vendor invoices allows you to convert paper invoices into digital invoices. More than just a simple administrative action, this process enables important productivity gains and substantial savings. When referring to dematerialization, we are not talking about merely emailing invoices. Much more than that, it is a real accounting system that lets us automate the process of sending vendor invoices in either EDI (Electronic Data Interchange) or PDF format, complete with an electronic signature. This operation, in part, is made possible thanks to the development of OCR (Optical Character Recognition) technology.
Why dematerialize your vendor invoices ?
Naturally, the dematerialization of vendor invoices responds to the issue of having to physically archive paper invoices. However, going beyond the practical aspect, establishing your accounting operations with a system based on OCR vendor invoices takes the process of dematerialization to another level. For instance, let’s say that emailing an invoice in PDF format is year 0 of the paperless age. In order to advance onto the next stage of evolution, you must have an integrated system capable of extracting data detected by optical recognition and linking it to a vendor invoicing database. In this regard, dematerialization is much more than simply getting rid of a sheet of paper; it frees your entire invoicing process from the limitations of the physical format!
This improvement is essential for optimizing your team’s productivity and performance. By delegating the tedious tasks of verifying and recording invoices to artificial intelligence, you will greatly reduce the rate of errors and missed payments. Automating your accounting process ensures higher reliability of your operations and thus allows your business to benefit from an enhanced professional image – enjoy higher levels of trust by guaranteeing that all your suppliers are paid on time.
Paper invoicing: a tedious process
Were you aware that the manual processing of a vendor invoice takes up to 14 days, on average? Imagine just how many mistakes and delays can happen in such a timeframe. Your administrative and accounting teams can easily get over encumbered by a plethora of documents, such as processing expense reports or preparing complex invoices and paper receipts. By opting to dematerialise vendor invoices, you considerably reduce an invoice’s processing time. In more concrete terms, an invoice that took 14 days to be manually processed by your staff, will be ready in less than 3 when it goes through a system equipped with a vendor invoice OCR.
These numbers alone should be sufficient to convince you to dematerialize your invoicing system. Though if you need an extra push, consider this: dematerialization reduces your costs of operation as much as it saves you time… Processing your invoices through OCR costs you 5 times less than doing it by hand. Time is money, and you save both!
Going paperless: an eco-friendly solution
Without a doubt, dematerializing vendor invoices also has a positive impact on the environment. Choosing a paperless solution is an ethical and ecological decision. In Europe alone, if all paper invoices had been processed electronically, it would have saved 13 billion liters of water, 5.4 billion kWh and 12.6 million trees… At this rate, you could have a forest named after your company!
An inevitable digital transformation due to COVID-19
The COVID-19 pandemic has highlighted the limitations of physical communication and paper correspondence. In the face of the worldwide health crisis, paper exchanges have become increasingly difficult. According to sanitary guidelines, some envelopes must even be left aside for 24 hours, while employees that handle them ought to be equipped with protective gear.
The pandemic has rendered the need for a digital transformation inevitable. Not only will the dematerialization of vendor invoices facilitate processing time, but it will also allow employees to perform in a safe and healthy environment.
Increase productivity and efficiency
Among the principal benefits of dematerializing vendor invoices, we can observe the simplification of processing the documents. You will be able to slash operational costs and manage your cash flow more efficiently by relieving your accounting team from the tedious task of manual invoicing.
Employees in charge of accounting tasks will also have a chance to work from anywhere, as IT tools facilitate the flexibility of working from home. As such, you would no longer have to fear the interruption of your operations in the event of a lockdown, effectively saving your company from the loss of productivity and the embarrassment of late payments.
It has been demonstrated that efficient supplier management heavily relies on an optimized account tracking system and the prioritization of payments. On top of that, if you pay your invoices on time and flawlessly meet all your deadlines, you can often enjoy discounts from certain vendors or negotiate competitive rates on certain purchase volumes. Reputation sure has its benefits!
What vendor invoice dematerialization solutions are available to you?
Now that you have become familiar with the financial and production-related benefits of paperless supplier invoices, here are the main three options that are currently available on the market:
The basic solution: scan and send
As mentioned at the beginning of this article, the simplest solution is to just scan paper invoices and email them. While this solution is indeed as basic as they come, it is far from being the most efficient. Though it does eliminate the transfer of physical documents, it also requires a tedious, repetitive action to be performed by an employee, which in turn increases the risk of error.
The OCR vendor invoice solution
OCR vendor invoicing refers to the process of converting invoice information into PDF, using optical character recognition. Beyond simply reading the information, the OCR system allows you to render any document compatible with your accounting software. Having undergone dematerialization, it becomes much easier to look up certain pieces of information within the document, thanks to OCR technology transforming an image PDF into a text PDF, which greatly facilitates textual research when needed.
The complete solution: electronic invoicing
Scanning and OCR vendor invoicing are both good first steps on the path toward achieving a paperless environment. However, an all-around electronic invoicing solution is perhaps the most efficient and cost-effective option for a company that wishes to optimize its accounting operations. As stated above, electronic invoicing is based on the Electronic Data Interchange (EDI) system, which consists of sharing invoices, proof of payment and other documents between computers. It is a complete solution, covering the entirety of the accounting cycle, from invoicing to the quote and the electronic payment. By choosing to adopt this technology with your suppliers, you are making an amazing leap into the future of accounting operations.
The electronic invoicing solution is made possible thanks to ERP system integration. If you wish to implement the vendor invoice dematerialization solution optimized for your business needs, contact our CRM and ERP specialists to find the right tool to increase your company’s productivity and profitability.