Every company has a process in place that handles invoice discrepancies. Although the basic function remains the same, each company’s processes can hugely vary depending on which industry or sector they’re in. Essentially, they all boil down to three specific domains.
Companies either do it completely in manual mode or use some kind of digital assistance such as automation software or just spreadsheets. As a part of that, it may as well be an ERP ( Enterprise Resource Planning ) system.
So, when you look at how you handle invoice discrepancies, it’s important to cover the internal aspects of the AP P2P process specifically. You need to signify who gets impacted, the costs, time, and risks associated with the choice of process.
So let’s look at the three different methods companies generally use to handle invoice discrepancies and how automation software such as Statement Matching can help.
100% Manual Invoice Handling
Most of the organizations that handle these operations manually use paper invoices. In some cases, they receive invoices via email and print them off.
While handling invoice discrepancies manually, it generally means that the person concerned will visit the respective departments or vendors in-person to initiate proceedings looking to resolve the discrepancy.
If the organization is multi-based, they might just use their regular transit to go to that particular site and deal with it. This will essentially be an internal post-type situation. It will land on the concerned person’s desk, and at some point, it goes back to the organization as a claim or a report.
The Digital Method
By digital, many organizations or officials just mean emails. They might just scan the paper invoice and email it to someone in the business at a different location or a different floor, or a different part of the organization.
They call it digital just because it’s technically a sort of electronic format. However, it does not form a workflow nor qualify as a more efficient process than manual handling. In fact, it isn’t very different at all. Also, it doesn’t really give you any sort of audit information. At least not any more than manual handling would.
Drawbacks of the ERP System
The ERP process is meant to streamline resources and their usage. However, in many cases, even the ERP system fails to provide important information to AP and Finance, such as the mismatches in time the invoices were sent or the amounts specified.
It also doesn’t have a provision that can offer a solution or mark the same as resolved if done manually. Also, most ERPs don’t have reminders or escalation capabilities in place to be able to help automate the tasks such as those related to invoice discrepancies.
Companies handle such scenarios in various ways from a recording perspective. But without digitalization in place, this is invariably managed by the lack of a better way itself than spreadsheets or paper. It’s also hard to track who updated them or when they get updated.
How Automation Helps
When you use automation to automate your AP function, you will have the benefits of visibility, traceability, and access to a full audit trail in place. It’s included within the software that comes as a package that saves a huge amount of time, effort, and therefore cost.
Furthermore, it significantly reduces the amount of fraud, and it enables some policies to be put in place that somewhat enhance the policing capabilities of AP and Finance people.
Conclusion
So when you rely on automation software such as Statement Matching, it becomes easier for the concerned team to track and understand the problem accurately, which was otherwise a tedious task. It also analyses and specifies how grave the problem could be and the number of problems they are facing with different invoice discrepancies.
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