Streamlining Invoicing Processes in 2024 for Efficient AR Collections

As the world transitions towards paperless systems, automated invoicing processes have evolved, reshaping the dynamics of business operations. In the B2B payment landscape, paper-based documents lack trackability and consume more time and resources for processing invoices. While paper-based invoicing systems generate clutter and contribute to paper waste, they are also prone to oversight, resulting in inefficiency. All these pain points necessitate a clutter-free invoicing system that is trackable, efficient, and does not consume too much storage space. As 2024 approaches, it's time to opt for an environmentally friendly and efficient paperless invoicing system that contributes to maintaining your cash flow. In this blog, we will explore the common challenges associated with invoicing processes and offer solutions demonstrating how automation resolves these issues while enhancing the efficiency of your accounts receivable (AR) collection processes.

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Automation Solutions to Paper-based Invoicing Process

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You may face many challenges when using a manual paper-based invoicing and recordkeeping system. Following are some common challenges you face due to the lack of automation systems and how automation can resolve those.

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Challenge 1: Missing Paperwork and Displaced Documents

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Over decades, paper-based systems and documents have been used for invoicing and recordkeeping purposes. Though businesses moved to computer systems in the early 2000s, many small companies still rely on paper-based systems in the finance department. Let's face it: Using paper contributes to mistakes, errors, and the likelihood of missing information, making it difficult to search and retrieve. Even document records are paper-based, which necessitates locating and aligning pieces of information to track a document.

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In the finance department, it creates inefficiency. It consumes precious hours of the finance teams to search for information, which delays your invoice-to-cash cycle and bottlenecks your cash flow. Missing paperwork not only frustrates your finance teams but can also create frustration for clients, resulting in negative experiences. 

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Solution: Transitioning Away from the File Cabinets

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Implementing automated invoicing software that integrates with your enterprise resource planning (ERP) system is the way to overcome this issue. It replaces file cabinets and paper-based systems for invoicing and recordkeeping with digital systems. This adds efficiency to your AR processes and frees up your finance teams by replacing manual invoicing with automation. Implementing invoice automation software comes with a cloud-based system, allowing your finance teams and CFOs a flexibility to track and access invoices and bills from anywhere, regardless of the location. 

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Visibility is a significant advantage of invoice automation systems and it is a trend to consider for the future as it allows you to identify potential invoicing issues so you can manage proactively without delaying the process.

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Challenge 2: Hiring Resources for a Large Number of Invoices

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With the number of customers growing and your organization experiencing customer inflow, you need to increase the number of resources for invoice creation. This increases your operational costs, requiring additional hours from your finance teams and manual efforts to create invoices. Appointing new resources for invoicing processes takes a longer hiring process, which also requires resources. Paper-based invoices also restrict visibility in tracking invoices throughout the process. This limitation implies that you cannot effectively monitor your invoices, hindering the scalability of your invoicing operations, which typically demands substantial investments.

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Solution: Embrace Invoice Automation is a Scalable Solution

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With a B2B invoice automation system, you can resolve scalability issues because it can be scaled to an enterprise-level solution without substantial investments. This solution doesn't demand additional human resources to cope with the growing volume of invoices and payment reconciliation. Moreover, you can leverage the consolidated invoicing feature without hiring extra resources. This automation system not only caters to your future business requirements in terms of cloud storage but also provides a means to monitor the efficiency of the invoicing system and the overall financial health of your organization.

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Challenge 3: Fraudulent Invoices and Suspicious Activity

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While you may feel at peace with your documents stored in a locked cabinet as secured, little do you know the heightened risks associated with paper-based invoices and check-based payment methods. These vulnerable processes may affect you in the following number of ways.

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• Little or no control over duplication of documents, including invoices
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• Snowballing of errors from one document that is followed in the next 10
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• Exposure to customer's sensitive information and data
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• There is no way to trace who accessed the documents
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• Lack of security or authorized access

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Given the risks mentioned above, paper-based invoices can lead to financial losses, directly impacting your business and causing a loss of customers due to a lack of trust. Fortunately, the automation system provides a solution for this issue.

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Solution: Implement Digital Document Management Systems

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Organizations relying on traditional systems can implement a digital document management system for added security and limiting unauthorized access. However, implementing an invoice automation system provides an integrated documentation system while simplifying invoicing processes with a highly secured electronic invoicing system. It records access logs while authorizing access to your finance teams. Any suspicious activity can be flagged or tracked, allowing you to secure your documents. 

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Challenge 4: Material Loss Due to Natural Disasters

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Floods, fires, hurricanes and tornadoes can surprise you in a way you cannot imagine. Without a contingency plan, your organization may face significant challenges, particularly with paper-based documentation and invoicing systems. This vulnerability can lead to a downhill trajectory, especially during crises like a pandemic that forces office closures and restricts document access. The risk of losing years of documentation and recordkeeping is substantial without a reliable backup. Papers are not resilient to these elements, underscoring the need for a dependable backup solution.

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Solution: Benefit from Cloud-based Storage of Invoice Automation

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Removing paper-based documents from the equation can help you mitigate this issue. Invoice automation system uses a cloud-based platform while offering flexibility to access from anywhere, regardless of the location. With authorized access you can save your documents and sensitive information from fraudulent activity. In case of natural disasters, you can retrieve data backup from cloud storage for a charge or without it, depending upon your subscription. Nevertheless, this is a way out and it resolves issues related to loss of documents or damaged systems in case of a mishap. By accessing the backup, you can restore your work from where you left, without affecting the records which is very difficult with paper-based systems. 

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Final Words

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Invoice automation revolutionizes the invoice processing workflow by providing a software system that auto-creates, and validates invoices. Subsequently, the system inputs the data into your accounts receivable or ERP systems. Implementing invoice processing automation can significantly cut down the time required for invoice processing, simultaneously enhancing efficiency throughout your business operations.