However, if we talk about the AP industry standards , there are a few common steps of the process. Whether your business is in construction, landscaping, consulting, photography, auto repair, or the medical field, invoicing takes way too long. InvoiceOwl makes your invoicing faster and simpler so you can get paid promptly and without the hassle. Get Started Now. After receiving, invoice verification is the first step in invoice processing. It includes the basic cross-checking of the invoice date and the vendor.
The purchaser verifies the vendor invoices with the purchase order and delivery receipts. Once the invoice document is verified, the accounts payable clerk sorts the invoice into different categories. For example, by invoice date, due date, vendor, type of transaction, or by the department. Invoice Data Extraction Once the invoice document is verified and sorted, the invoice information is fed into the system either manually or by general ledger coding.
If done manually, the accounts payable clerk enters the invoice data, such as the invoice date, vendor, invoice amount, and due date to the system. This method is slow and has room for human error. Whereas, the alternative is the AP automation software.
Using general ledger coding of an AP automation software, the accurate data is directly fetched by the system in less than a minute. All the accounts payable clerk has to do is scan the invoice and import it into the invoice processing software.
The AP automation software converts the scanned image into a researchable document. Once it is converted, it is programmed to find the necessary fields and fetch the information. You can manage and customize the fields that the software imports. The invoice approval process is one of the most crucial steps in invoice processing. This is done to avoid fraudulent and duplicate payments. After the invoice has been put into the system, it waits for the approval process to finish. The person approves the invoice and forwards it to the accounts department to make the payment.
This is easier than said. In the real-life scenario, it is quite common that invoices get misplaced, or just be another paper in the unprocessed document pile. And in many cases, the accounts payable department may even miss errors in the invoice which ends up being detrimental to the company finances. Therefore, by making the entire process digitally, the AP automation software takes care of it effectively. The invoice processing software automates the cross-checking of data and makes sure not even the tiniest detail goes unnoticed.
Moreover, as it works digitally, it is impossible to misplace an invoice. Invoice Payment Once the authority has approved the invoice, it is sent to the accountant to finally make the invoice payment. The accountant checks the invoice payment information, such as accounts payable, method of payment, and payment terms and conditions. The accountant also checks the account balance of the vendor.
If the purchasing company has already made a partial payment, deposit, or surplus amount in the previous bill.
And pay the dues accordingly. If done manually this makes the accountant go from one ledger to another. It takes a lot of time and energy. To avoid such waste of resources, invoice processing automation systems are the best solution. So the sooner you invoice the better. If forgetting to raise an invoice is more than a one-off occurrence for your business, then perhaps it's time to consider hiring a management accountant or bookkeeper?
Remember a customer is not going to chase you asking you to invoice them as they will want to keep the cash. It is really important you keep on top of invoicing otherwise it will seriously affect your cash flow. Well in short the answer is yes, unless more than six years have passed.
The only regulations placing a time limit on collecting a genuine debt is the Limitation Act Although you have the right to invoice, where the invoice is over 6 months old we would recommend to include a covering letter apologising for the delay or simply calling your customer beforehand to discuss the matter. By adding your terms of service related to payment expectations, you are one and a half times more likely to get paid.
However, one of the most effective things you can do to increase the likelihood of getting paid is to add the due date. This resulted in being eight times more likely of getting paid from that client. What these tips reveal is that the actions you need to take to increase your chances of getting paid are not complicated, expensive, or time-consuming; if anything, they are very simple. For more information on our recent research about how long it takes to get paid from an invoice and what you can do to receive a faster payment, click on and review our infographic below:.
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John Rampton. Updated on September 3rd, Tips to Get Paid Faster as a Business Owner In further disseminating the data from these invoices, a number of recommendations can be offered.
Check Out Our Infographic on Business Invoicing For more information on our recent research about how long it takes to get paid from an invoice and what you can do to receive a faster payment, click on and review our infographic below:. John Rampton John Rampton is an entrepreneur and connector.
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