In its most simple definition, vendor invoice management is an Accounts Payable process of receiving an invoice from vendors, validating it, paying the vendor and entering the payment in the financial records.
Effective vendor invoice management is very important for your business to avoid any delays or mistakes in receiving and paying for the stock.
However, this process is not as simple as it seems, especially when dealing with manual invoice workflows. According to industry estimates, businesses spend around $25 and over ten days to process a single manual invoice workflow. Moreover, the complete process is repeated in case of any errors.
Here are some of the best practices by industry experts that can help businesses like yours take control of your vendor invoice management process:
Prioritize your invoices
When processing payments to vendors, prioritize which invoices you are paying for, based on key factors like due date, payment terms, and the type of bill.
Vendors have varying due dates for invoices based on the negotiations with the procurement team. This can help delay invoice payments with a long due date and help your cash flow.
Secondly, prioritize invoice payment based on the payment terms, especially in case of early-payment discounts. Lastly, focus on prioritizing bills that extract interest rates for delayed payments.
Limit access to employees
Vendor invoice management and Accounts Payable, as a whole, is highly prone to fraud. When an employee in the AP process enters the vendor information and processes their payment, they have the power to abuse their position and siphon funds from the business.
By setting internal controls and separating the duties within the team, you protect the business from such activities. Moreover, you also get greater control over approved payments and vendors, making it easier for you to identify any cases of fraud.
Adopt invoice management software
Vendor invoice management software, like BFM by ZikZuk Technologies, helps businesses reduce the time and cost spent on the invoice process by replacing it with automated workflows. With one click of a button, they capture, fill out and manage invoice data, simplifying the payment process.
By automating the workflows, the business can avoid human errors and process the invoice in just 3-5 days, thus saving money on labour costs.
It may be necessary to pay the bills, but it doesn’t have to create additional costs in terms of lost time, value, and productivity. Investing in a high-quality vendor invoice management software like BFM will streamline the process, reduce time & cost, and get the best returns.
Apart from vendor invoice management, BFM also helps business gain visibility into their finances, automate payment reminders and access their financial info anytime and anywhere. Want to know more about BFM? Visit www.zikzuk.com today!