As your business grows, so do the number of tasks you need to perform. To maintain your profit level as you grow, you need to operate efficiently. If not, the additional revenue you generate will all be spent on administrative costs. Consider these tips to process invoices efficiently.
An Operations Manual
Many aspects of your business are complex. This article explains some critical tax reporting processes. Working with taxes and payroll can be difficult. Your entire accounting function may be easier, if you create a procedures manual.
As explained here, businesses should document procedures for tasks that are routine. Documenting what needs to be done creates predictability in your business. Both the manager and the employee will understand what needs to be done- and in what order. This predictability helps your company operate efficiently.
Your Invoice Process
Consider your procedures for invoice processing. Your payables assistant receives invoices from suppliers. He verifies that the invoice meets company guidelines for spending. For example, is the vendor listed on the approved vendor list? Companies create these lists to ensure that they only order product from vendors that meet their quality needs.
Your payables assistant needs to verify that your firm received the product listed on the invoice- and follow up on any exceptions. The invoice needs to be approved for payment by management. The manager will review the invoice, and evidence that the goods were received (ex. shipping document). A manager sends the approved invoice to the accounting area. Accounting adds the account number and cuts a check for payment. Finally, the check is sign by a manager and mailed to the vendor.
What Can Go Wrong
The payable process requires multiple steps. A various points along the way, the payable assistant may have to stop the process and do more work. If the goods received don’t match the invoice, the assistant will need to follow up with your shipping area and the vendor. If the payables assistant falls behind, vendors may call to ask about the status of their payment. If the assistant isn’t careful, the same invoice might be paid twice.
As your business grows and you process more invoices, the chance of making a mistake also grows. Fixing mistakes requires time. As the mistakes grow, your payables assistant falls even farther behind.
Outsourcing How You Process Invoices
One way to address this issue is to automate your invoice processing. You may be able to hire someone to take on this in-house processing system. Their use of technology can sharply reduce the risk of errors.
An automated system can import vendor invoices from a variety of devices. The automated invoice can be made available to everyone in the process. The payables assistant can compare the invoice to company guideline. A manager can review the invoice and supporting documents online. This system makes approving the invoice easier. The accounting department can assign an account number online. If a vendor or anyone else in the process has a question, the payables person can easily find the needed information.
Automating your invoice processing system can allow your business to handle more invoices. You can grow your business and operate efficiently.