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The Impact of Invoice Processing Software on Financial Management in Aeronautics

In the fast-paced world of aeronautics, every minute counts towards innovation and progress. Yet, within this industry, a cumbersome and time-consuming task persists –  the manual processing of invoices. Employees must print or scan each invoice, enter the details into accounting software, route invoices for approval, follow up on outstanding invoices, and reconcile vendor statements. 

This manual invoice processing takes up significant time for accounts payable staff. Employees may spend hours each week on data entry, matching invoices to purchase orders, chasing down approvals, and fielding inquiries from vendors. The more invoices a company receives, the more staff must be dedicated to these tedious administrative tasks.

By automating the invoice processing workflow, aeronautics companies can significantly reduce the staff time and overhead costs associated with manual processing. Invoice management software enables companies to streamline approval workflows, extract invoice data, integrate with accounting systems, and pay vendors faster. This automation provides major cost savings compared to traditional manual processes.

Inefficiencies of Manual Invoicing

Manually processing invoices is prone to human error, which can lead to several costly mistakes and inefficiencies:

Inaccurate data entry: Invoice data entered manually is susceptible to incorrect amounts, dates, vendor details, and other information being inputted. This inaccurate data can significantly distort financial reporting and analysis.

Duplicate invoice payments: Without automated checks, duplicate invoices can easily be paid since there is no system flagging them. Paying the same invoice twice results in immediate financial loss.

Missed early payment discounts: Sorting through invoices manually makes it difficult to take advantage of vendors’ early payment discounts. Missing these discounts results in losing out on cost savings.

Late payment penalties: Invoices can fall through the cracks when processed manually, leading to payments being made late. Late payments incur fees and penalties that add unnecessary costs.

What Does Invoice Processing Software Do?

Invoice software helps automate invoice processing and handling, streamlining the workflow. Its primary functions include:

Data Capture: The software extracts key information from invoices (such as vendor details, amounts, and invoice numbers) using OCR (Optical Character Recognition) or AI-powered techniques.

Invoice Validation: This verifies the accuracy and validity of the extracted data against predefined rules, reducing errors and ensuring compliance.

Workflow Automation: Automate invoice processing and route them for approvals based on predefined rules or hierarchies.

Integration with Accounting Systems: The software seamlessly integrates with accounting or ERP (Enterprise Resource Planning) systems, transferring validated invoice data for payment processing and reconciliation.

Analytics and Reporting: It generates reports and provides insights into invoice processing metrics, helping to optimize processes and identify areas for improvement.

Document Management: It stores and organizes invoices digitally, allowing easy retrieval, audit trails, and compliance with record-keeping requirements.

Benefits of Automated Invoice Processing 

Invoice software helps automate the invoice processing workflow with significant benefits for financial management in aeronautics and other industries. The software enables more efficient processes by eliminating manual data entry and paperwork.

Key benefits include:

1. Improved Financial Controls

Invoice processing software enables aeronautics companies to implement more rigorous financial controls around invoice approvals and payment processing. By automating these controls, finance teams can reduce the potential for errors, fraud, and duplicate payments.

The software allows companies to configure approval rules and set spending limits and thresholds. For example, invoices below $5,000 might only require approval from a department manager, while invoices above $10,000 need a VP-level sign-off. 

The system maintains an audit trail of every invoice received, approved, and paid. This ensures a detailed record of all transactions, which can be examined in case any issues arise.

Implementing these automated controls provides finance leaders with greater oversight and command overspending. They gain visibility into invoices requiring review and can control who has the authority to approve different transactions. This reduces wasted spend and ensures compliance with internal policies around procurement and vendor payments.

 2. Better Cash Flow Management

Automating invoice processing can significantly improve cash flow for aeronautics companies. By streamlining the approval and payment of invoices, businesses can take full advantage of early payment discounts and avoid late fees.  

With manual processing, invoices can often fall through the cracks and go unpaid for long periods. However, automation ensures invoices are routed to the right people quickly for review and approval. Given the high costs and volumes in the aeronautics industry, these savings from prompt payments can be substantial.

Automation also prevents missed invoices that can result in late fees. Software alerts ensure no invoices are overlooked and payments are processed on time. This avoids the 10-20% penalties that vendors often charge for late invoice payments. With thousands of invoices to process, even a small percentage of missed payments can rapidly add up.

Finally, having clear visibility into accounts payable through automation provides accurate cash flow forecasting. Managing cash flow is vital for navigating market volatility in the aeronautics industry.

 3. Increased Productivity

Automating invoice processing significantly increases productivity for accounts payable (AP) teams. When invoices no longer need to be processed manually, AP staff are freed from repetitive data entry and validation tasks. This enables them to focus on more strategic work that adds value. 

With software handling routing, approvals, coding, and posting of invoices, everything moves much faster. Invoices get processed in a fraction of the time compared to manual methods. This increased speed and efficiency means payments go out sooner. Organizations can take advantage of early payment discounts and avoid late fees. 

Faster invoice processing also frees up working capital that was previously tied up while invoices worked their way through traditional workflows. AP teams regain precious time to focus on vendor relationships, negotiations, reporting, and analysis.

4. More Visibility into Spend 

Automating invoice processing provides far greater visibility into organizational spending than manual methods. The software captures detailed data on every invoice that can be easily analyzed to identify spending patterns. 

  • With more complete and accurate data on expenses, finance teams can run reports to understand where and how money is being spent. This allows them to identify opportunities for reducing costs.
  • Invoice management software seamlessly integrates with business analytics and BI tools. This makes it easy for finance teams to visualize expenses, find trends in spending, and share insights across the organization.
  • The data and analytics capabilities create transparency in expenses. Management can track budgets more effectively and ensure compliance with internal expenditure policies.
  • The detailed visibility from automated software reduces unauthorized and maverick spending. When all invoices are accounted for, expenses are less likely to go unseen.

With 360-degree visibility into invoices and expenses, aeronautics finance teams can move from retrospective reporting to predictive analytics. This supports data-driven decision-making to control costs proactively.

5. Compliance with Regulations  

With manual invoice processing, it can be difficult to maintain proper compliance with accounting regulations and document retention laws. Invoice processing software provides several key benefits for compliance:

Digital audit trail: The software stores a complete digital trail of all invoices, approvals, and other documentation. This provides transparency and traceability for audits.  

Automated tax calculations: The software can be configured to automatically apply the correct sales tax rates and calculate taxes owed. This reduces errors and ensures compliance with tax laws.

Storage meets regulations: Invoices and supporting documents are stored securely in the cloud. This meets legal requirements for document retention and storage. The data is encrypted and access controlled.

Automating compliance activities through invoice management software reduces the risk of penalties, fines, and regulatory issues. It also saves employees time compared to manual compliance efforts. Maintaining compliance is essential for aeronautics companies handling sensitive customer and pricing data.

Automate Invoice Processing for Efficient Finance Management

Aeronautics companies can leverage invoice processing software to implement the financial controls necessary to avoid errors, duplicate payments, and fraud when managing high volumes of invoices and complex billing workflows. Automation provides oversight needed to improve governance and accountability across the invoice-to-pay process.

With ITILITE, bid farewell to paper-based documentation. Our software securely stores and organizes invoices digitally, ensuring easy retrieval, compliance, and audit readiness at your fingertips.

Experience the ease of streamlined workflows as ITILITE automates invoice validation and approval routing. The software routes invoices through your predefined processes, slashing approval times and eliminating bottlenecks.

Why wait? Book a free demo NOW to know more.

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