Do you know how much it costs your company to process a single invoice?
There’s a number from the Association for Image and Information Management (AIIM) that says the average is $12.90. For a single invoice! But that number doesn’t tell the full story. It doesn’t take into account the increased cost if the invoice can’t be matched to a purchase order. It doesn’t take into account the increased cost if the invoice isn’t electronic, or if the paper invoice lands on an employee’s desk who’s taking a two-week vacation. And, if you’re trying to avoid those exceptions by only working with vendors who are members of a buying group, vendor network or submit their invoices according to your best practices, it doesn’t take into account the loss of savings you might have been able to procure if you had the flexibility to buy from any vendor who could deliver a quality product or service for less regardless of their method of invoicing.
It also doesn’t take into account the lost productivity potential of having highly competent employees doing menial data entry work when they could be serving the company in a much higher capacity resulting in higher productivity and employee satisfaction.
Nor does it take into account the fees when invoices are paid late or the cost of inefficiency when you could negotiate significant savings by guaranteeing a 10-day net but your system can’t always turn that invoice around in 10 days. (The whitepaper The Single Solution to Invoice Processing Headaches that we co-authored with IOFM reports that few businesses meet their goal of paying 90 percent of invoices on time.) And of course, it doesn’t take into account the costs of exceptions and errors and there is no way to calculate the cost of lost sleep because of lack of transparency or increased risk exposure.
If you’re saying, “Oh, I hadn’t thought of that,” know you’re in good company. Most of our clients hadn’t thought of that either, but once they started looking into it they were surprised at how much it was costing their bottom line. All those costs add up. Whether it’s direct costs or lost saving potential, not converting to automated invoice processing is likely pushing your per-invoice cost far higher than AIIM estimates.
So now that you are thinking about that let’s break it down.
OCR is definitely a viable solution for converting all of your invoices into a single electronic format. This streamlines the payment process and provides complete transparency in your reporting. I say this with two caveats:
- One – It doesn’t reduce costs to implement OCR processing in-house only to find that you have replaced menial data entry with menial scanning, or even worse, huge support costs and low accuracy. And, while your staff understood data entry, OCR processing is a new beast and they are now locked in a losing battle with it. You will have invested huge amounts of money in technology which now has to be integrated (your IT Department may not be your greatest fans about right now either) and which will be outdated before your employees even have time to get cozy with it.
- Two – No matter what your technology provider tells you, OCR accuracy seldom tops 40 percent out of the box. That means your staff will still be involved in figuring out what the scanner couldn’t make sense of before the electronic file is finalized.
I know, it was sounding so perfect wasn’t it?
And it can be, just not by taking OCR in-house and trying to integrate it with your existing systems.
My vision, when DataServ began developing our Single Stream P2P process, was that much in the same way that you put paper, plastic, and cardboard into one container and trust that they will all end up in the proper bin and routed to the proper destination, our clients would be able to send all their invoices through our Digital Mailroom (paper, E-Invoices, PDFs, emails, you name it…) and trust that they would be returned as electronic records with 99 percent or greater accuracy and an Exception Queue ready for your AP staff to work. I believed that we could marry a SaaS solution, which is where most of our competitors stop, with human judgment to create a new standard in ease, accuracy, and exceptional service.
And that is exactly what we’ve done. Do your research—download the whitepaper or watch the webinar and then add up the hidden costs you’re paying today and give us a call to chat about how you can eliminate all or most of those costs by partnering with us to implement Single Stream P2P functionality in your business.