Accounts Payable invoice automation solutions are comprised of many components – Digital Mailroom, optical character recognition, pre-ERP three-way match, etc. – and as a solution provider, you’re sometimes surprised at which specific component is going to resonate with a particular organization.
We learned this recently when the “direct ship” automation component of our AP automation solution was a significant factor in us winning business from a major industrial distributor.
What is Direct Ship Automation, you ask?
Direct shipment is a method of delivering goods from the manufacturer to the customer directly, bypassing the distributor in the middle that took the customer’s original order. DataServ can act as an automation service for the distributor by receiving direct ship invoices from the manufacturers, automating the processing of the invoice, and then automatically sending that invoice data to the distributor’s ERP. This data feed can then trigger the generation of an invoice to the original customer. Not only does this cut out the middle man by having the invoice go directly to our client’s customer, but this streamlined process significantly reduces DSO (days sales outstanding).
The primary benefits of Direct Ship Automation are:
- The distributor is able to eliminate manual keying for accounts receivable (AR) to direct ship entry
- Reduced time to bill the client
- Reduced paper routing between accounts payable (AP) and AR, as the AP data is made available immediately for AR billing
Without Direct Ship Automation, a company:
- Would have to be manually keying in this invoice data
- Would take longer to bill the client, leading to greater DSO
- Would have lots of paper to route between AP and AR
We realize this feature isn’t applicable to all organizations – it’s primarily geared toward distribution companies that take advantage of the benefits of direct ship from a manufacturer – but for distributors that experience the pain of routing invoices through multiple channels and long DSO times, Direct Ship Automation can be worth its weight in gold.
To find out more about Direct Ship Automation and how it can benefit your organization, contact us.