Reduce Invoice Validation Time by 50%
We can help you reduce your invoice processing time.
The time it takes to validate an invoice can have a significant impact on an organization’s efficiency, productivity, and bottom line. Invoice validation involves verifying the accuracy of invoices and ensuring that they comply with established policies and procedures. This process can be time-consuming, particularly for organizations that rely on manual processing methods. The average time spent validating an invoice can vary widely based on several factors, including the complexity of the invoice, the size of the organization, and the efficiency of the invoice processing system in place. In this context, it is important for organizations to optimize their invoice validation process to minimize delays and improve efficiency.
Our goal here at DASH is to help companies reduce invoice processing time. A reduction in processing time results in lowered costs and errors.
Q: What is the invoice validation process?
The invoice validation process involves cross-checking charges received or billed with amounts paid or received. This can be automated through accounting systems or conducted as a manual validation process. The DASH AP Robot utilizes a 3-way matching capability to cross-check every line across all 3 documents to verify data.
Q: What are the invoice processing steps?
- Vendor invoices are received by fax, mail, email, or captured by an accounts payable system.
- Invoices are prepared by data entry.
- Verification of invoices.
Q: What’s the average time spent validating an invoice?
Short answer? It depends.
How long it takes to process an invoice depends largely on the size of your company, the type of software you are using (if any), and the payment and financing terms involved.
On average, it should take between three days to two weeks from the time you receive an invoice until when the money is deposited into your customer’s account. Some cycle times can stretch out to nearly three or four weeks before you finally pay an invoice. With automation, some invoices could be paid within days. Because AP Automation can detect fraud, this allows businesses to close the process faster.
The amount of time spent validating an invoice can vary widely depending on several factors, such as the complexity of the invoice, the size of the organization, and the efficiency of the invoice processing system in place.
However, in general, organizations that have an efficient and automated invoice processing system in place can validate an invoice in a matter of minutes. On the other hand, organizations that rely on manual processing and validation methods may take several days or even weeks to validate an invoice.
In some cases, the validation process may involve multiple levels of approval or require additional information from the vendor, which can further prolong the process. Overall, the average time spent validating an invoice is difficult to estimate as it can vary significantly based on the unique circumstances of each organization and invoice.
If it is taking you longer than two weeks to process invoices, there are a few common problems that may be responsible. In this case, there are likely to be steps you can take to speed up the process (see below, ‘How Can My Team Speed Up Invoice Processing?’).
We have been researching and finding that on average, companies spend about 19 minutes validating each invoice. WOW! That doesn’t sound too bad, except when you multiply that over 10+ invoices a day, that can really add up! Our goal is to help companies reduce their time to less than 1 minute per invoice, or 0! (we have an auto-post feature!)
Q: How can my team speed up invoice processing?
There’s no way around it. The success of your business relies on you getting paid. But invoicing can be a lengthy process. For starters, manual invoicing costs business owners or employees around two hours per week creating and sending invoices. Another two hours will be spent reviewing invoices to be paid – and that’s not even discussing the time spent chasing late payments. On top of that, a majority of invoices are not paid on time within 30 days.
Simply put, invoicing is a time-consuming process.
The problem is that this isn’t just preventing you from working on other tasks, it’s also hurting your cash flow.
Here are a few things to speed up that process:
- Utilize the Right Tools. Ditch the manual invoicing process and move to an automated invoicing system. This eliminates tediously creating invoices in a spreadsheet and waiting for payment via snail mail. Tools like the DASH AP Robot allow you to quickly enter and match electronic invoices in just a matter of minutes and then post them to your ERP to get paid quickly. Since there are hundreds of automated AP companies available, all of which have various and unique features, it’s best to take advantage of the free trials or demos so that you can find the platform that best suits your business.
- Automate as Much as Possible. Like any business process, dealing with invoices should take as little of your internal resources as possible. Speed is usually a good indicator of efficiency.
- Review your Invoice System Frequently. Ensure efficient workflow across teams in your organization and maximize your automation software capabilities.
- Minimize Errors. Automated processing can reduce errors and generate valuable data, which can give you insight into your clients’ and employees’ processes and spending patterns. Such data can be used for business planning and forecasting purposes.
What are the challenges in invoice processing?
- Standalone systems.
- Heavy paperwork burden.
- Reliance on postal systems.
- A high volume of invoices.
- Line-item errors and typos.
- Miscommunication between business and vendors.
- Late payments.
- Reliance to paper-based payment methods.
Q: Why should a team move to automate invoice validation?
There are several compelling reasons why a team should move to automate invoice validation:
- Increased Efficiency: automated invoice processing can significantly increase the speed of invoice validation, allowing teams to process invoices faster and with fewer errors. This can free up time and resources for more important tasks.
- Cost Savings: Automate invoice processing can save organizations money by reducing the need for manual labor and minimizing errors, which can lead to costly disputes and delays.
- Improved Accuracy: automating can help reduce errors and improve accuracy by eliminating the potential for manual data entry mistakes and improving consistency.
- Better Visibility: automated invoice processing provides better visibility into the invoice validation process, allowing teams to track invoices and identify bottlenecks and areas for improvement.
- Increase Security: automation can help increase the security of invoice processing by reducing the risk of fraud and ensuring that invoices are validated according to established policies and procedures.
Automating invoice validation can help teams work more efficiently, reduce costs, improve accuracy, and enhance security, making it a valuable investment for any organization.
Curious about how to reduce the time it takes to validate invoices on a daily basis? Great! Let’s have a conversation and we can help you learn more. Schedule Here. We look forward to it!
About the Author:
Stephanie is the marketing guru at Dash. For over 20 years, Dash has been authoring, delivering, and supporting Dash DDX™, its ERP-integrated Document Automation software to small and mid-sized manufacturing and distribution companies throughout the USA and beyond.
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