Several years ago, DRC Capital, an independent investment adviser that focuses on the commercial real estate debt sector in Europe, faced a problem familiar to fast-growing companies. In simple terms, it had outgrown many of the finance and administration systems put in place when it was founded. So when Maria Santos Roman joined as office manager, she was immediately struck by the huge volume of work involved in managing invoices and expenses.
“It would take days to approve an invoice,” she recalls. “And even though I was only involved in creating expense reports for three or four people, I still had to go through everyone else’s expenses and ensure every item had been allocated to the correct project code. It was all taking a lot of time.”
Such issues can create major financial headaches if left unattended. Recent reforms to the UK’s Prompt Payment Code now require 95% of invoices from businesses with fewer than 50 employees to be paid within 30 days, which is great from an accounts-receivable perspective. But signatories to the code also need to be fully on top of their invoice and expense processes on the accounts-payable side. In fact, businesses owners, finance directors or CEOs are now required to take personal responsibility for payment practices, while also acknowledging that suppliers can charge interest and that breaches will be investigated.
Although late payments are clearly a problem, they are usually caused by flaws in accounting processes rather than any desire to delay payment. Approvals are often agonisingly slow, for instance, with businesses taking an average of 10 days to get a supplier invoice signed off. Invoices and receipts can also get lost in the system – two in three finance staff say missing or incomplete documentation is a major challenge in their business. And finally, some invoices simply take an age to reach the accounts processing department, by which time the payment may already be overdue.
Even when companies have proper procedures in place, the manual nature of this work invites human errors. Accounts payable departments have to match a supplier invoice against purchase orders and receipts, record it in the accounting system, and code it. If this is done with a combination of paper, email, spreadsheets and disconnected applications, mistakes are bound to happen at some point. But thankfully there’s a solution to the problem: automated invoice processing.
Tools such as Concur Invoice let accounts teams approve invoices remotely, while avoiding data-entry errors
Digital invoice software can speed up processing times by reducing duplication. It also allows reviewers from the accounts team to approve invoices remotely (something that’s even more important in the wake of home and hybrid working initiatives), and can quickly detect potentially fraudulent invoices. What’s more, when systems are automated, fewer invoices are lost, with businesses that use automated invoice management software reporting that 60% fewer invoices are misplaced.
Businesses can typically recover 70% of the time spent on invoice capture with tools such as Concur Invoice, while also reducing data-entry errors. Automated solutions provide full visibility of every stage of the invoice-processing journey too. You can quickly see where an invoice is in the process, and automated reminders prompt people when required, saving yet more time.
It wasn’t only the amount of time everything took that troubled Santos Roman when she joined DRC Capital: invoices were approved via a paper-based system and each month everyone in the office raised an expense report.
“I was concerned about the massive amounts of paper we were printing and how much we were spending on storage,” she says, noting that the processes didn’t sit comfortably with the company’s approach to environmental responsibility. To Santos Roman, the invoice and expenses paper processes seemed completely unnecessary and a problem that could only get worse as the company continued to grow.
Keen to find a better way of doing things, she turned to Concur Invoice and Concur Expense, which could be scaled to suit DRC’s needs. “It was important that the system was tailored so it would give us what we needed and worked in the way we worked.”
SAP Concur’s cloud-based solutions are accessible from anywhere with an internet connection
Since implementing the solutions, Santos Roman has been able to reduce the amount of time she spends on invoices and expenses by 30-40%. “It has been instrumental in helping me do my job better and be more effective,” she says.
And it isn’t just Santos Roman who has benefited from the introduction of new technology: the entire team has. “People have taken to Concur Expense very well because they can take pictures of their receipts and then recycle them,” she says. “They can do all this on-the-go and it’s really fast once they get the hang of it. Our managing partner uses the SAP Concur mobile app so he can approve invoices while he’s travelling.”
Although DRC Capital now has a strong accounts processing system in place, many companies still rely on outdated manual processes that can lead to late payments. In a further effort to tackle the problem and ensure that larger companies pay their smaller partners on time, the UK government is considering granting the small business commissioner the power to issue legally binding payment orders, launch investigations and levy fines. So whether you’re a large or small business, payee or payer, it might be wise to automate your invoice and expenses processes.
SAP Concur solutions help automate finance processes to free up time for staff, provide insights into spending and future-proof your business
