How Can Eliminating Paper Invoices Help Save Money And The Environment?

automation-saves-money | Photo Courtesy of	 401(K) 2013 Glenn Saunders

The environment has become a major area of concern for everyone. As a result, goals to reduce carbon footprint are being implanted in many corporations’ psyche.

Whether it be carpooling, recycling in the office or flexible working schedules to reduce the gas consumed by employees traveling to office sites, one thing’s for sure — leaving our environment in a better state for our children is important to a great many of us.

In a corporate environment, an easy way to eliminate waste and reduce your carbon footprint is through document imaging and accounts payable automation.

By eliminating paper invoices, a company is saving its suppliers money spent on postage and reducing the gas consumption of transportation. Accounts payable invoices follow the standard 80/20 rule in that 80 percent of invoices will come from 20 percent of suppliers. If you can convince those 20 percent to email, fax or electronically transmit their invoice information you can substantially reduce your company’s carbon footprint.

There also are savings from a buyer perspective. It becomes easier to automate the entry of these invoices from their electronic form. There’s no need to open the invoice and, if necessary, match it to a purchase order in the system.

By deploying a document imaging software solution you can perform an automatic image capture of the invoice and then key the invoice from that electronic capture. Most organizations are required to keep such documents for at least seven years.

This way, there’s no need to maintain costly paper documents, which take up space, or have to offsite them and pay someone to maintain those documents. Again, when you offsite documents you are using transportation to move the documents.

Having an electronic record management system can make audits much easier as you simply provide the auditors with the search tool instead of spending hours sifting through paper documents to provide the appropriate sampling.

Another, somewhat newer technology allows for the ability to automatically have invoices created in the accounts payable system from a document which is emailed to the company. There are some setup complexities, but the benefits can be astounding.

By automating the invoice entry process you can reduce manual errors and focus on the review process to ensure accuracy. Not only do you have this automated data entry, but you can automatically communicate with the supplier so that they know you have received the invoice.

That means no more invoices getting stuck in desk drawers and forgotten about. This also allows companies to better capture discount opportunities, further enhancing cost savings. This type of solution also is beneficial in the archiving of documents in a document imaging solution for retention and search.

The cost savings of an automated accounts payable system and document imaging system are manifested through the following:

  1. Reduced carrying cost of paper invoices.
  2. Easier capture of supplier discounts.
  3. Reduction of postage costs from disparate facilities to corporate.
  4. Reduction of errors in data entry.
  5. Reduction in time spent with auditors.
  6. Reduced penalties for missed or late invoice payment.

An organization can not only reduce costs, but also improve its image through a commitment to environmental awareness. It is a win-win for a company that is serious about reaping huge benefits in its supply chain.

Paper is outdated and will continue to be replaced in corporate environments. An electronic document management solution can provide a very fast ROI for companies looking to streamline processes, reduce costs and improve their green credibility.

Glenn Saunders is the director of client success for Kraft Enterprise Systems. He is an expert in the professional services and software industries and frequently consults with clients on both the design and implementation of software solutions to solve complex business issues.