Vendor Invoice Management (VIM) is revolutionizing the way organizations handle their accounts payable processes, bringing efficiency, accuracy, and control to the management of vendor invoices. In today’s fast-paced business environment, where invoices can pile up, manual processing becomes error-prone, and the lack of visibility hinders timely payments. VIM offers a comprehensive solution that automates and streamlines the invoice processing lifecycle, enabling organizations to optimize their financial operations.
With Vendor Invoice Management, organizations can bid farewell to the time-consuming manual handling of invoices. VIM provides a centralized platform for capturing, storing, and retrieving invoices digitally. Organizations can achieve several benefits when integrating VIM into the procure-to-pay process.
Vendor Invoice Management Benefits for Organizations:
Automated Invoice Processing
VIM provides automation for invoice processing. This provides accuracy and efficiency that results in reduced manual effort, faster processing times, enhanced compliance, and increased visibility into invoice status. Ultimately, VIM helps organizations optimize their procure -to-pay (P2P) processes and achieve significant benefits in terms of cost savings, improved vendor relationships, and streamlined operations.
Additionally, VIM identifies and manages exceptions within the invoice workflow, such as missing information, errors, or deviations from predefined rules.
Workflow Automation
VIM integrates with the P2P system, capturing invoices from various sources such as paper documents, emails, or electronic data interchange (EDI). Once invoices are captured, VIM applies predefined business rules to automatically route them to authorized users based on factors like invoice value, expense category, or vendor. VIM simplifies and streamlines the invoice processing workflow through:
- Automated invoice capture, routing and approval;
- Data extraction and validation;
- Integration with the workflow;
- Exception handling;
- And more.
VIM also provides a centralized platform for managing the workflow associated with invoice approvals. It allows organizations to define and configure workflows based on their specific business rules and hierarchies.
Integration with ERP Systems
VIM integration with ERP systems enables streamlined data flow, eliminates duplicate data entry, ensures data consistency, and provides real-time visibility into invoice status and financial obligations. This integration enhances financial control, simplifies auditing processes, and provides a holistic view of procurement-related financials within the ERP system.
Reporting and Analytics
Through comprehensive reporting functionalities, organizations can track key metrics and evaluate the efficiency and accuracy of their invoice processing workflow. Advanced analytics further enhance decision-making by enabling deeper analysis, data visualization, and benchmarking.
These reports include KPIs such as processing time, invoice volumes, cycle times, and exception rates. By analyzing these metrics, organizations can identify process bottlenecks, measure the efficiency of their invoice processing workflow, and identify areas for improvement.
Value Attainment – Case Studies
Many organizations have reported extreme success as a consequence of implementing an invoice management system. Let’s explore how some of them were able to achieve such success with VIM:
In 2020, a global technology corporation aimed to modernize its finance automation processes and partnered with Auritas. The company had concerns regarding operational risks, compliance issues, and business continuity. Additionally, it recognized that their existing tools were not scalable, which hindered growth potential.
The company’s CFO emphasized the importance of modernizing its finance operations. “We want to modernize ourselves for the current century. Finance Automation is a top priority, and our AP was the first step.” they explained.
With Auritas, the project spanned over 11 months and consisted of four phases: the creation of a global blueprint, implementation of key innovations, rollout in the APAC region, and transitioning to and optimizing the S/4 system. The project yielded significant success:
- 51% touchless global automation within three months of the rollout.
- Established a unified ECC platform for 49 entities.
- Addressed 145 global requirements.
Another case was in 2021, when a global manufacturer sought to modernize their finance automation and connected with team Auritas. “We want to grow a digital future whilst eliminating key touch points and standardize towards common efficient processes globally,” explained the company’s Sr. Manager of Finance Systems.
With the goal of reducing labor and cycle time, while also optimizing cash flow and creating scalability, the team implemented a multi-phase plan focusing on digitalizing, standardizing, accelerating, operating and optimizing.
In just 12 months of the implementation:
- Over 700 thousand invoices processed – EDI 55% and email and paper 45%,
- Touchless process went from 0-20% to 85+% globally.
- Cycle time was reduced from 18 to 4.5 days.
- Relationships with suppliers were greatly improved.
Thus, by incorporating VIM into the P2P process, organizations can achieve greater efficiency, accuracy, and visibility in managing vendor invoices. This optimization leads to reduced processing time, lower costs, improved compliance, enhanced vendor relationships, and better overall control over the procure-to-pay process.
It’s important to note that while the general principles and features of Vendor Invoice Management remain consistent, specific functionalities and capabilities may vary depending on the vendor or software solution chosen by an organization.
Organizations can address their AP challenges by implementing effective vendor invoice management. VIM empowers organizations to streamline their invoice processing, enhance operational efficiency, and maintain better control over financial transactions.
