This is the third post in a PaymentSource Premium series, exploring the business case for automating your accounts payable (AP) to manage all invoices, not just the alcohol ones, in one place.
Today’s ultra-competitive business world demands efficiency at every turn. Capturing line-item details is one area where you can maximize efficiency, especially when investing in AP automation. By automating the extraction of line items, you not only mitigate tedious manual accounting work but also accelerate the process to make more impactful decisions and drive growth.
Benefits of Automating the Extraction of Line-Item Details
Efficient line-item extraction gives you speed and provides you with the knowledge you need to streamline touchpoints, understand your payment activities, and make more informed decisions about the products you stock on your shelves.
Towards that end, let’s highlight the key benefits of automating the extraction of line-item invoice data for maximum efficiency.
Boosting data efficiency
With 57% of businesses manually keying invoice data into their accounting software, the constant risk of inaccuracies leaves everyone crossing their fingers for the best possible outcome. With automation, you have the power to eliminate tedious manual work and generate insights at speed.
Plus, automation unlocks meticulous analysis to help you paint a complete picture of your invoice payments, ensuring accuracy in:
- Quantities
- Unit prices
- Total amounts
All are correctly categorized and tied back to the corresponding purchase order. This level of scrutiny makes it easier to spot any mistakes or inconsistencies that could not only slip through the cracks but also cause damage to your finances over the long haul.
Better business partnerships
According to the Wall Street Journal, businesses take an average of 58 days to pay their vendors, an increase of 5.5% from a year ago. Ironically, another study found that 84% of vendors consider timely payments essential for fostering successful vendor relationships, with payment accuracy coming in as a close second.
By automating the extraction of line-item invoice data, you can efficiently access and manage all your invoices in one place. This streamlined process enhances your business’s ability to swiftly validate invoices, ensuring prompt payments and promoting transparency. Plus, it helps safeguard your business against potential risks such as:
- Poor business reputation
- More expensive payments
- Less favorable payment terms
- Poor credit rating
- Delayed payments
- More friction across your network
Auditing and fraud risks
Auditing is crucial in spotting and preventing potential fraud or errors that could impact your profits and cash flow. Recent studies found that businesses worldwide lose about 5% of their revenue each year to employee fraud. In the United States alone, a single case of employee fraud can cost business owners roughly $1.7 million. Worse, over 87% of fraud cases involve theft – making your vendor invoice a key target.
To avoid unexpected harm, advanced automation tools capture line-items and digitize your invoices for you, providing a comprehensive overview of your invoice payment activities. By gaining complete insight into your financial transactions, you can also make sure that only authorized users can access sensitive information, strengthening alignment and safeguarding your business from potential theft.
Understanding your cost-of-goods-sold (COGS)
Tracking your COGS is a vital aspect of managing your finances effectively. It plays a key role in determining your revenue and profits, leading to more informed purchasing decisions. A higher COGS shows that you either have too much inventory or are pricing your alcohol products at a loss. In both cases, you are losing money.
As vendors account for 40 to 80% of retailers’ total costs, streamlining the process of extracting line-item invoice data through automation is key to swiftly transitioning from analysis to action. This accelerated pace empowers you to:
- Gain insight into your spend
- Set the right prices for your products
- Strike the perfect balance between healthy margins and costs
Simplify Line-Item Detail Extraction with AP Automation
Automating the extraction of your line-item invoice information opens the path to faster accounting, a comprehensive insight into your spend, and more informed purchasing choices. To fully harness these advantages, invest in a robust AP automation solution that streamlines the process of capturing and analyzing line-item invoice data for you.
Powerful AP automation solutions, like PaymentSource Premium, use advanced machine technology to help you scan, digitize, and manage all your invoices (not just alcohol) in one place. Our platform seamlessly integrates with over 200 back-office systems, giving you the power to:
- Pay your vendors faster
- Better understand your business needs
- Eliminate tedious manual accounting
- Save time and money
All of which frees you up to focus on the things that matter to you.
Interested in learning how Fintech can automate your AP processes? Feel free to get in touch for further details.
