The pains of manually processing PDF invoices
The nature of construction means that the processing of invoices is a major issue for businesses. The manual processing of hundreds or thousands of invoices can be extremely time consuming and places a great deal of pressure on accounts payable teams. In addition to this, PDF invoices can easily be lost in transit or misplaced. This leads to payments being missed. The potential for errors with manual processing, on both sides of the payment process, also wastes further time and carries a financial implication in the form of an increased cost per invoice. According to the Accounts Payable Association, on average, 3.6% of invoices in the UK are inputted incorrectly. Another study found that incorrect information on invoices was the reason for 15.1% of payment delays by domestic B2B customers across Europe.
For growing businesses experiencing an ever-increasing flow of invoices which must be processed manually is prohibitive and will ultimately require the business to extend the AP team. Digitalisation is the process of transforming business processes (not just converting documents to digital files) and allows business to achieve growth without increasing manual tasks.
The power of true e-invoicing
The solution to these issues is to implement a true e-invoicing system such as Causeway Tradex, which will allow the manual processing of paper to be minimised, if not eliminated, on both sides of the payment process.
True invoicing digitises the invoicing process by processing invoice data in an automated way, paper and PDF invoices are eliminated. This data can then be utilised to speed up processes and provide business intelligence.
With Tradex, all suppliers submit their invoices through the dedicated portal. At this point all invoices undergo an automated validation process that ensures it is an HMRC compliant invoice, checks it is not a duplicate and confirms it contains a valid purchase order (PO) number and that the details match the PO information. This means only invoices that are ready to be paid are delivered to the accounts payable team, improving invoice straight-through processing rates.
If an invoice does not meet the requirements, the supplier is automatically notified with the reason for the return and provided with the option to edit and resubmit, removing the need to credit and re-issue. This automated validation, only possible with a true e-invoicing solution, immediately delivers up to a 80% time saving for the accounts payable team.
Ensuring quick ROI and minimal disruption
Many businesses, even after they understand the benefits of e-invoicing, are hesitant to implement such a solution due to concerns about the time required to onboard the technology, as well as integrate with the supply chain.
However, with the right solution, this is not an issue. Tradex, for example, can be rolled out in just a few weeks, delivering an exceptionally quick return on investment. Firstly, it has been designed specifically for construction finance and, unlike more generic platforms, can cope with sector-specific issues and complexities such as operated and self-drive plant, call-off orders and three-way matching.
Additionally, Tradex is already used by thousands of other construction companies and the vast majority of major suppliers are already on the system. Where supply chain partners are not current users, the Causeway onboarding team provides full support in bringing them onboard. For example, when Kier Group adopted Tradex, it was able to onboard 87% of its suppliers in only nine weeks many of whom were already trading via Tradex.
A further factor is the ability for Tradex to fully integrate with other financial systems, such as Sage, to minimise disruption to day-to-day operations during implementation. This integration also provides improved data visibility to allow more informed decision making.
With the drive towards digitalisation in construction and the issues associated with manual processing of invoices, a true e-invoicing solution provides clear benefits. It will not only reduce the burden on the accounts payable team, but also help the business as a whole to work more efficiently.