Invoice exceptions aren’t new but in a digitally driven world it is hard to accept the fact that 31% of the Purchase Order Invoices result in exceptions. These require manual rework before they are approved for payment. This was the outcome of a recent study conducted by one of the leading market research firms. Over 200 industry professionals participated in this research. Now let us discuss the findings of this research and discuss the three common causes of invoice exceptions
PO Price/Quantity Discrepancy – When invoices are processed in bulk this is one of the major issues that crops up. The Price and Quantity mentioned on the invoice often tend to vary with the actual goods delivered. This might be a simple typo or a major flaw in the way the invoice is generated.
No Valid PO on Invoice – This is one of the major errors in invoice and can immensely dent the name of a business. It can make your business look unprofessional and dent your prospects of retaining the clients.
Goods Not Received – This is a supply side problem where the goods often don’t reach the clients on time or not reach them at all. This might occur due to loss of goods in transit, wrong shipment of goods and even communication gap between the ground staff and the accounts department.
Invoice exceptions can have many detrimental effects on a business and prevent them from earning the goodwill of their clients and creating a strong brand image in the market. This can also result in
-Late realization of payment
-Increase in operational cost
-Lowering of productivity
Eliminating invoice exceptions is one of the primary tasks of any business. This helps in improving the productivity of your organization at the same time allows you to develop healthy and long lasting relationship with your clients. Here are some of the ways in which you can resolve this problem.
Take Stock Of Problem – Businesses that fail to take stock of the problem would never be able to resolve it. What percentage of your invoices is getting rejected? How often is it happening? Are you witnessing any trends in these rejected invoices?
Find The Root Cause – Where is the bottleneck in the process? Review all blocked invoice and analyze them thoroughly to find the root cause of the problem. Once you have identified the cause try and eliminate it at the source.
P2P Automation – Manual handling of invoice exceptions can be one of the major contribution factors. You need to implement P2P automation solutions or end-to-end automation solution from receipt to payment. This will allow you to enforce key organizational and process changes. These improvements can help you cut down the invoice process time, processing costs and minimize opportunity costs due to such errors with an automated process using the right set of tools and technology.
The right invoicing program can help you do away with invoice exceptions. These tools are highly cost effective and reduce your operational costs and improve your efficiency and brand equity.