For a business' bottom line, little else is as important as accounts receivable (AR) and accounts payable (AP). An organization must know both what money is or should be coming in (AR) and what money is or should be going out (AP).
Of course, the larger the company, the larger the AR/AP "beast" and the more time and staff-consuming the process is. With data created and disbursed at a faster pace than ever before, and invoices arriving (and often, being sent) in multiple, non-integrating formats, a thriving business expecting to stay on top of its cash flow has a lot to handle.
However, with the right technologies in place, AR/AP document management can be streamlined and optimized. Here are the top three ways intelligent document management software can optimize accounting workflows for your business.
Is your AR/AP team spending hours each week on mundane, repetitive manual processes? Are employees manually cross-referencing invoices with purchase-order details, hunting down missing documentation, indexing bills and other paperwork, and/or reconciling the formats and sizes of multiple incoming and outgoing files? If your answer is yes to any of the above, a top digital document management platform can revolutionize your workflows.
Leveraging artificial intelligence, Ripcord's solution enables the automation of such burdensome work, allowing algorithms to take over what was previously done by human workers. Using logic, if-then rules, and deep learning, the Ripcord platform mimics human intelligence and gets "smarter" the more data that it ingests.
With what result? Your staff reclaims many hours of previously manual work and can then utilize those hours for the higher-level thinking, creativity, and innovation of which only humans are capable. By facilitating that kind of change, your organization uses its human resources and its technology in the best possible way.
A survey by Bloomberg Tax & Accounting noted that one of the top three accounting mistakes cited by respondents was human error, specifically incorrect manual data entry.
"It's easy for organizations to write off the occasionally erroneous spreadsheet cell or employee turnover as [an] inevitable cost of doing business," the survey report's summary notes. "Realistically, each of the... Mistakes represents a preventable drain on corporate resources and a liability to a firm's reputation."
According to the Accounts Payable Association, 3.6% of invoices entered manually contain an error caused by manual data entry, and in a survey of businesses that process 350,000+ invoices per year, the problems caused by exceptions on invoices were responsible for 32% of all late payments.
By removing humans from the process, intelligent document management for accounts receivable and payable greatly reduces the probability of incorrect data entry. Ripcord’s machine learning algorithms use deep learning on a large and ever-growing dataset, enabling high-accuracy optical character recognition (OCR).
Managing AR/AP processes efficiently determines, to a large extent, the health of your organization’s cash flow. According to the Atradius Payment Practices Barometer USMCA 2020 Report, late payments are on the rise.
The report revealed: “Late payments affect 43% of the total value of invoices issued in USMCA (up from 25% last year). The total value of long overdue invoices (extending past 90 days overdue) has doubled to 13% this year, while 4% of the total value was written off as uncollectible (up from 3% one year ago).”
The rise in late payments affects cash flow in more than the obvious way. In addition to not receiving anticipated funds when needed, 30% of business respondents in the Atradius survey reported needing to increase the amount of time, resources, and costs spent to chase overdue invoices. Many of those same businesses also reported needing to delay settlement of payment to their own suppliers because of the cash flow issues triggered by overdue accounts.
Intelligent document management systems address these issues in several ways. By reducing the probability of invoicing errors, document management solutions reduce the probability of late payments associated with those errors. Further, intelligent document management also enables rapid integration with other business systems, as well as account reconciliation at scale. For a real-life example of this, download our Coca-Cola Bottlers case study to learn how a Ripcord-designed accounts receivable program contributed to a net savings of over $1 million annually for the company.
AR/AP processes no longer have to be the time-consuming, manual processes of the past. Ripcord’s OCR technology rapidly captures and extracts invoice data, streamlining your revenue cycle workflow by maintaining minimal human involvement and giving you greater control and visibility over your accounts payable and accounts receivable process. Learn how Ripcord can help you put your data to work.