Does your company receive all sorts of cash discounts that you can take advantage of on a regular basis? If so, according to a survey by Levvel Research, you are one of the 33% of companies that do. Around 16% of companies never manage to get any discounts at all.
There are various reasons why invoices are paid too late and therefore cash discounts are missed. But the recipe for changing this is practically the same in all cases. Thanks to modern technology, invoice processing can be automated and the time that passes from the receipt of an invoice to payment can be significantly reduced. An invoice that arrives in the morning can sometimes be paid on the same day and thus benefit from a cash discount. Although such a discount is usually only around 2%, you should not ignore its relevance. If your company is dealing with larger amounts, these 2% are quickly worth significant cash.
If you have problems benefiting from these discounts, then you can read below how you too will not miss out on a discount in the future anymore.
Reasons for late payment
For larger companies that receive numerous invoices every day, it can be difficult to keep track of everything and to be able to pay them all on time. In addition, there are always challenges in the process that further delay the payment of an invoice.
The most frequently cited reasons, which emerge from the aforementioned Levvel Research survey, can be seen in the chart below.
Routing
Sometimes the most common reason for late-payments and missed discounts is routing – the process of assigning invoices to the right departments and people. With a large number of different invoices, manual routing usually takes a relatively long time, which makes it difficult to receive discounts. So, in order to benefit from discounts, the processing time must be reduced.
The routing process can easily be automated with a document management system (DMS). Thanks to configurable rules and workflows, incoming invoices reach the responsible department immediately. In addition, many of the necessary checks and approvals can also be carried out automatically.
Invoices can thus be approved much more quickly, resulting in a much shorter processing time and a much more likely realization of the discounts granted.
Manual data entry
73% of companies let their employees enter invoice data by hand. Another report even estimates that around 90% do so. This is undoubtedly extremely inefficient and also prone to errors. That’s where modern OCR solutions can help big time. This not only relieves employees of tedious, repetitive work but also helps to further reduce processing time in a meaningful way.
You can read more about how processes can be optimized with document extraction software here.
Automated order reconciliation
If you have a solution for automatic data extraction from invoices and the like, you can, for example, also perform order reconciliations automatically. Automating order matching allows the invoice to go through the invoice processing process without having to manually enter or verify information. This in turn leads to shorter processing times and therefore discounts are another step closer.
Centralized scanning
Central scanning is another way to speed up the invoice processing process. For frequently performed processes (e.g. accounts payable), a separate mailbox and e-mail are created where all documents are sent to. This can as well lead to shorter processing times and higher productivity. To read more about centralized and decentralized scanning, you can read here.
Conclusion
You see, there are several ways to reduce invoice processing times and thus to be able to pay the invoices earlier. Automated document extraction is one of the core elements that can help you do this.
Such a solution pays for itself and also offers other advantages, which you can look up in this article here.
If you would like to optimize your processes yourself, thereby reducing throughput times, costs and error-proneness, and benefit from valuable discounts, then register for a 14-day free trial account via the banner below and see for yourself the effectiveness of a modern extraction solution that will help you achieve greater operational excellence.
