Streamlining your accounts payable (AP) by outsourcing to invoice processing services for your small business allows you to make better financial decisions. With the right service, you can find cost savings, increased visibility and gain flexibility that makes it easier to scale your processes to match business growth.
Why You Should Outsource Invoice Processing
When relying on manual paper-based or semi-automated processes, invoice errors are nearly inevitable. These errors can upset vendors and make it hard to balance general ledgers, fulfill tax obligations or identify fraud.
Poor invoice processing also hampers visibility into business spending and cash flow. If your small business has multiple departments inputting invoice data into separate systems, it becomes difficult to track performance using key performance indicators (KPIs) such as invoice processing time, processing cost per invoice and error rate.
Outsourcing invoice processing can help you overcome these issues, allowing you to focus on strengthening ties with your vendors and building your operations.
Cut Costs and Save Time
Outsourced invoice processing services can provide up to four times faster processing times compared to manually handling accounting tasks or having inconsistent systems. By speeding up processes, you can gather data and send out invoices faster. This can potentially increase the cash flow income for your business.
Additionally, reduced processing times lead to greater cost savings versus doing the work in-house. With outsourced professionals managing invoice processing, your team can focus on other tasks that boost productivity and expand operations.
Improve Accuracy and Reduce Errors
Invoice processing outsourcing companies invest in the latest accounting automation tools to ensure their customers have accurate financial information. Technologies like smart data extraction and optical character recognition (OCR) reduce the likelihood of errors by converting invoice data into a more searchable and manageable format. With readily available, accurate invoice data, internally auditing your financial records and ensuring compliance becomes easier and more efficient.
Boost Cash Flow Efficiency
Faster processing through accounts payable outsourcing ensures invoices are analyzed and routed to the necessary people for approval, enabling quicker—even early—payments to vendors.
Many companies offer discounts or other benefits for early payments, so your business will be able to capitalize on these opportunities due to the speed and efficiency of outsourced invoice processing services. It may also open opportunities to negotiate better prices and terms as vendors recognize that you consistently pay your invoices early.
Access Advanced Technology and Expertise
Since AP outsourcing companies generally use automated invoice processing, they give small businesses access to artificial intelligence (AI), smart data extraction and other digital tools your business may otherwise not be able to afford or implement. Additionally, you gain specialized expertise from professionals who are available to answer questions and address concerns.
Scale with Confidence
Incoming invoices can fluctuate for a variety of reasons, including sales events, new product lines, customer trends and business expansion. When invoice volume increases, it can overwhelm your in-house employees. Outsourced solutions provide qualified AP analysts and bookkeepers on demand, with the ability to seamlessly integrate into your processes, technologies and tools.
How Invoice Processing Services Work
While every invoice processing company has unique features to distinguish itself, the accounting workflow remains relatively consistent. Invoices are uploaded onto a cloud network or platform through email attachments, direct batch uploads, scanning or direct submission. Once invoice pre-approval is given, data extraction begins.
Processing Using Technology and AI
Since invoices can have different formats or languages, AI and data capture technologies extract the data according to the template and schema. Any flagged data goes through further review to be corrected. After errors are corrected, invoice reports are generated, and the data is compiled for downloading.
Technologies like OCR simplify the conversion of data into usable formats, while machine learning and AI can categorize and verify data, check for anomalies, maintain quality assurance, and streamline invoice approval. Constant communication with clients is maintained through their preferred methods, whether via mobile apps, email, text notifications, or other channels.er means are used.
Integration with Existing Accounting Systems
Outsourced invoice processing services ensure that the downloaded invoice data format is compatible with your existing software systems. By using popular accounting software that integrates with your setup, these services enhance visibility and ensure a seamless transition.
How to Select the Right Invoice Management Solution
Key Features to Look For
When selecting an invoice processing service, prioritize features like mobile accessibility, cloud security and scalability. Being able to handle a high volume of invoices efficiently and securely will be necessary as your business grows.
Questions to Ask Potential Providers
Ask about security measures in place to protect your financial data, how the provider handles exceptions or unusual invoices and how they ensure seamless integration with your existing systems. Understanding the providers’ responses will help you make an informed decision.
Evaluating ROI
Evaluate the return of investment (ROI) of outsourced services by considering factors like time savings, error reduction and improved cash flow. Understanding how quickly you’ll see ROI can help set realistic expectations and enable you to measure the success of the invoice processing provider.
Key Considerations for Successful Implementation
Prepare for the Transition
Before transitioning to outsourced invoice management solutions, assess and adjust your internal processes. Migrate software and data as necessary, and prepare your staff for the change. You can maximize the benefits of outsourcing more quickly with a smooth transition.
Establish Clear Communication Channels and KPIs
Set clear reporting and communication protocols with your service provider. Establish KPIs to track success, and do regular reviews of them to help maintain quality and efficiency in your outsourcing arrangement.
Continuous Improvement and Optimization
Use data from outsourced processing to identify areas for improvement. Reallocate internal resources as needed, address employee concerns and establish quality metrics and performance standards. Continuous improvement should be a core focus to maximize the value of your invoice processing solution.
Maximize Efficiency with Invoice Processing Services
As your business grows, you need to find ways to make operations more efficient. Streamlining your finance team’s workload by investing in invoice processing services allows you access to accounts payable automation and experienced AP professionals without the need for more in-house personnel. This approach not only saves money, but also improves invoice accuracy, ensuring vendor satisfaction.
Evaluate your current invoice processing methods and select a provider that offers scalability, seamless integration with your existing systems and comprehensive security features. At Paro, we offer accounting and bookkeeping services that align with your operational needs. Our experts integrate smoothly with your processes to handle invoice processing efficiently so you can streamline your financial operations, reduce costs and improve accuracy.
