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AP Invoicing Process

AP Invoice Automation

Does your company still receive paper invoices that are manually routed for approval or scanned/emailed to approvers? Or does your organization have an automated routing solution in place yet still feels like much of the employee’s time is spent on the invoicing process? You are not alone; a high percentage of construction companies today spend a significant amount of financial and human resources on this process. It is estimated that accounts payable personnel can spend up to 60-80% of their time on this task and Burger Consulting Group (BCG) often sees companies add administrative headcount to help manage the payables. While this can be effective to some extent, this approach is also a costly solution. A recent client who is a specialty contractor with over $1B in revenues has 35 personnel dedicated to AP functions, much of it handling invoices.

Invoice automation is not always at the forefront of a contractor’s priority list. Burger Consulting Group highly recommends companies to evaluate their AP processes and consider automation. In our experience of working directly with clients, having the right solution in place resulted in a significant reduction of costs associated with invoice processing as well as improved controls. Invoice automation eliminates 95% of manual tasks, creating process efficiencies, and cost savings. There are several approaches possible from using the invoice routing function within your ERP solution, to acquiring a third-party invoice processing solution with integration into your ERP AP application. Either approach is preferable to scanning, routing, filing, following up, asking for duplicates, updating spreadsheets, and fielding vendor calls. All common functions in the absence of an automated invoice processing solution.

In addition to the benefits of automation for back-office functions, there is increased value to operations as well. With the right technology to assist with AP invoice handling, there is a tighter connection between back-office functions and job sites. Having accurate and timely job costs is critical. With automation, the company is alerted when invoices arrive, and approval workflows can be automatically kicked-off based on companies’ approval needs. The benefit is a reduction in upfront administration time, quicker turnaround with less manual intervention, and costs hitting jobs faster and more accurately. In construction, cost management is a key element in monitoring and controlling a project as costs can be managed and analyzed down to a very detailed level.

AP automation also eliminates the risk of invoices sitting on desks, in job site trailers, in vehicles, or stuck in emails. The invoice status is visible with built-in features to help ensure its continual movement through the approval to posting workflow. Further to this, when complete, an electronic version of the invoices are stored in the solution for easier access during audits or when needed for billing backup.

As the world continues to face the global COVID pandemic, emphasis on process improvement, especially any changes that can provide for work-from-home options and less personal contact, will surely be at the top of any organization’s priority list. As companies face future work uncertainty, investing in an AP invoice processing solution can yield a strong ROI. Automation will also safeguard risks associated with any disruptions to back-office functions from administrative employees working from home.

Several recent AP automation projects yielded the following insights for clients:

  • A better understanding of their existing process including the level of manual steps, spreadsheets, and gaps in important controls
  • Recognition of advances in how far technology has evolved and been applied to these specific processes
  • Awareness from within operations of how important the commitment process is to ensuring efficient AP Invoice processing

Those results alone were enlightening for clients and made the case for investing and transiting into an AP Invoice solution that much easier.

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