Table of Contents
- 1. Clearly Define Your Policy and Program
- 2. Create a User-Friendly Invoice Management Process
- 3. Pay With the Right Card
- 4. Maintain Visibility
- 5. Use Invoice Management Tools to Leverage Automation
- 6. Keep a Single Invoice Repository
- 7. Organize Your Invoice Repository
- Invoice Management Technology
Poor invoice management can wreak serious havoc on your company. Your vendors trust you to pay them on time, and delivery of your various products is often dependent on those services. The more invoices go unnoticed or, worse yet, unpaid, the more you damage those relationships, access to lines of credit lines, and, eventually, your reputation.
Optimizing your invoice management process ensures you avoid vendor penalties, late fees, and compliance risks.
1. Clearly Define Your Policy and Program
You may not have to completely rework your invoice payment process. Taking small steps today to tweak how you process your payments now could save your team valuable time.
The good news is that you don’t have to reinvent the wheel. Simply by working with your accounts payable team and understanding their workflows, you’ll find opportunities to educate and streamline.
Start working with the AP team now to determine how:
- Invoice details are captured, organized, and stored in a way that will facilitate potential audits
- Employees understand the expense management policy, associated workflows, and potential consequences from failure to follow that policy
- International vendors levy a value-added tax (VAT) and if it’s valid based on the expense and location
- Streamlined that process is for your vendors
2. Create a User-Friendly Invoice Management Process"If compliance is an issue, using a more user-friendly and automated system is a better way to ensure that employees report expenses correctly." Click To Tweet
Define a process that’s intuitive and simple, and your team is that much more likely to adopt it. If compliance is an issue, using a more user-friendly and automated system is a better way to ensure that employees report expenses correctly. For example, expense cards with holistic discovery tools make it easier to identify anything that may fall otherwise fall through the cracks.
Let’s take one use case: A team waiting on approval for licensing or acquiring new tech they need to get a project over the line. If you allow employees to make those timely and justifiable purchases as soon as they need them, that flexibility could result in better compliance and transparency.
3. Pay With the Right Card
Traditional expense cards have their limitations. Some cards are good for travel, others are good for ridesharing, and others are good for SaaS purchases. Choosing the appropriate expense card can help make it much easier to manage the process. Consider which cards offer robust reporting, facilitate payment workflows, and offer a good fit for the business rules defined by your organization’s policies.
For example, Visa’s Ink Business Cash credit card is great for office supplies, the American Express Business Platinum Card offers excellent travel parks, and the Quolum SaaS Card is fine-tuned for SaaS spend management.
This brings us to the topic of visibility and reporting.
4. Maintain Visibility"Money spent on a client dinner is a lot different than money spent on software that may not even be consumed." Click To Tweet
Robust reporting makes it possible to keep tabs on everything, but the time and effort required depends heavily on the solution selected. Some tools offer historical looks at spend data, while others leave it to the consumer to track trends over time and identify anomalies. Where one credit card simply offers a list of charges, another may include categorizations and descriptions.
Expense management tools should offer visual dashboards that present actionable information. For example, invoice management tools should provide visibility into subscriptions that are about to be renewed. Money spent on a client dinner is very different from money spent on software that may not even be consumed.
Along the way, it’s important to find and eliminate bad data. Human error is the primary source of bad data (for example, expense reports that are filed with blank fields). Replacing manual processes with an automated system makes invoicing and expensing a lot easier to manage. At the same time, spend management must account for new types of assets at play in modern companies.
5. Use Invoice Management Tools to Leverage Automation
Even if your invoice management process has manual steps, use a tool that automates as much of it as you can. If an expense application looks suspicious, allowing a member of the payables team to flag it and move on does two things: One, it keeps their workflow moving forward and, two, creates better accountability for unusual purchases.
Resolution will always require supervision and a set of human eyes, but there are plenty of tools with features that streamline workflows. For example, a SaaS management tool helps keep licenses up to date and provides the oversight leadership wants.
6. Keep a Single Invoice Repository
This step sounds much easier than is often the case, especially at large companies or other organizations with different sources of expenses. Best practices for invoice management dictate that all invoices should be in a digital, central invoice repository.
To ensure that every invoice makes it into the repository, it must be possible to gather and organize invoices from multiple sources. For example, the Quolum invoice repository can accept invoices via upload, forwarded emails, and direct emails from the vendors. No matter how the invoice comes over from the vendor, there is a way to get it into the main repository that serves as a source of truth.
7. Organize Your Invoice Repository"One of the main problems with invoice repositories is that they can be just as difficult to read as a credit card statement, especially if the name of the software is not descriptive." Click To Tweet
One of the main problems with invoice repositories is that they can be just as difficult to read as a credit card statement, especially if the name of the software is not descriptive. Let’s take a fictitious example—call it Examplr. This name does not describe the software very well as it is, and this problem is compounded when it gets billed through the parent company, ABC Corp. Even if you remember what Examplr does, it may take additional research to see why ABC Corp is showing up on your expense statements. Given that company/ corporation names are often very different from product names, this is surprisingly common.
Quolum’s invoice repository solves this problem by offering ways to tag, categorize, and organize software. It shows up in the repository with the name and description. The user can easily see what the app is and what it does, saving time that would otherwise be spent looking things up manually.
Invoice Management Technology
Traditional invoice management practices often fall woefully short when it comes to modern expense management.
Companies are spending more on subscription-based products such as SaaS, and using more vendors to source the various required products. To accommodate the new ways in which businesses spend, we must also update the ways we think about expense and invoice management.