Approximately 25-30% of accountants’ time is taken up searching for documents. However, the old adage that ‘time is money’ is more relevant today than ever before. One area where most companies can quickly lower operational and financial cost, risk and optimise efficiency is by switching to an integrated, cloud-native, document management platform which automates data storage, distribution and document management.
Many companies are spending unnecessary time searching for invoicing information and documents, correcting errors, or ensuring document compliance when all of these processes can be safely automated. Finance and administration departments have become so used to outdated, manual-based methods – which are also very time-consuming – that companies do not realise the true cost of such inefficient systems.
International Data Corporation (IDC) statistics indicate that employees waste 36% of their day searching for, and not finding documents, and additional hours are wasted re-creating ‘lost’ documents. On average, every misfiled document costs $125 (approximately R1800) and a lost document costs $700 (approximately R10 200). With effective document management, this pain disappears.
According to a study conducted by Gartner, 80% of intellectual property is communicated or stored in email. Without a regularly updated and consistent central database, this leads to ‘corporate amnesia’ where information is lost when employees leave, or if it is stored on desktops instead of a single company information platform. This highlights the fact that companies lagging behind the adoption curve in terms of automated document management are losing out. It also speaks to the urgent need for companies to have a single platform to bring all their disparate information and systems together in one automated, cloud-native platform.
According to a press release issued by Gartner in April 2019, ‘organisations that embrace the potential roles and unique differentiators of … SaaS in the spectrum of cloud platform capabilities stand to extract the greatest value from their cloud investments.’
Inadequate Financial Systems
While most ERP systems still play a valuable role, certain functions were designed around a print-based manual operating model: the system defaults to printing documents rather than creating digital copies, which slows down the entire process as the printed documents need to be manually scanned back into the system. This in turn increases the risk for error as the scanned documents must be captured manually. By supplementing an existing ERP with a ’software-as-a-service’, cloud-native financial document management solution the process is automated, companies reduce the risk of human error and speed up their accounts receivable process, which means fewer delays when it comes to getting paid.
So, if you are questioning whether it is worth enhancing your document and financial management system, consider the following:
- Are your invoices sent manually via mail, email or in person?
- How many times is your accounts department requested for copy documents or supporting documents?
- Does your business – and cash flow – suffer if your administrative staff members are not in the office?
- If there is a small mistake – such as a typo – do entire invoices need to be redone and a credit note issued?
- If those who need to sign off the credit note are not in the office, are there further delays in the process?
- Would automating and tracking the contracting signing process shorten the sales cycle, save valuable time and ensure that you can start invoicing new clients much faster?
- And the ultimate question – do these delays result in companies not signing up with you or delaying payment to you, which negatively affects your cash flow?
Small mistakes add up
Those small mistakes, that we all make, eventually add up and cost companies valuable cash flow due to delayed payments from customers. By centralising your ‘master data’ (names and email addresses) and automating the distribution of documents, you avoid documents being sent to the incorrect recipients and time-consuming email bounce-backs due to capture error. Automating this simple step allows you to collect your cash much faster.
By maintaining your master data in one system and ensuring all systems ‘sync’ with this one single system, companies reduce the risk of sensitive information being erroneously sent to a wrong email address.
This will also allow you to further streamline your entire financial document management process from purchase orders to customer invoices and payment receipts, and all information will be consistent – thereby eliminating any delays due to the human error element.
Once you have a streamlined process, you also need to make your invoices as easy to pay as possible: clear and concise information and a transparent document trail will put you first in the queue for payment each month, as there will not be any reason for queries on your invoices.
A single, consistent documentation process which eliminates human error is one of the quickest and easiest ways to avoid cash flow backlog.
Making the ‘quantum’ leap
Many companies find themselves stuck in a time-consuming administrative ‘rut’ and simply do not know how to make the ‘quantum leap’ from there to a fully automated cloud-native document management system. If you are still unsure about using cloud-native solutions, it is best to start with one area at a time: isolate a specific document processing area, such as customer invoices, and then identify all the steps in this process:
- Pinpoint where documentation enters your system
- Log who captures the information and where it goes next
- Identify where delays and errors occur – calculate what these cost you in a year
- Do a review of the filing – is everything in place? If an auditor asked for specific documents, could you find them immediately?
If you identified any delays, errors or lost documents in your system, it is well worth implementing an automated document system in this one area. Remaining on a manual system will impede your company’s productivity and financial sustainability, so it is better to make even a small start, than to allow your business to fall behind.
By doing a trial run with a respected document management partner, you will be able to do a comparison between an automated system and your current manual system. This will give you a clear view of just how much manual errors and delays are costing you each year.
Easy compliance tools
With a cloud-native automated document management system, all documents are instantly accessible and there is no need for time-consuming searches through various folders. With a platform already geared for local and international financial and tax compliance, companies can also reduce their invoice payment turnaround times and lower their invoice rejection rates too.
The real cloud advantage
Being fully and truly cloud-native means that the platform is built from the ground up specifically to leverage the cloud. This results in a system that is always on, always available, easily scalable, and robust enough to suit an extremely broad range of businesses and able to respond with agility to technology developments.
It is however also very important to distinguish between cloud-native and cloud-hosted. Cloud-hosted implies the platform still lives on a third-party’s servers at an off-premise site. The daily operations take place at the off-premise site, but all data is effectively still stored in on-premises servers.
A cloud-native system is much more advantageous because you only ever access the internet, not an entire server. Operating via a cloud-native system makes more financial sense for modern businesses: instead of an upfront project fee, a cloud-native document management system works on a month-to-month subscription basis. In addition, any improvements or updates made to the system benefits all companies who use the system, at no additional cost.
You can picture a cloud-native system this way: it is the same as parking your car in someone else’s garage – the car is not on your premises, but it is still yours, you still have to pay for it and make sure it is maintained. You are just not responsible for the ‘garage’ (infrastructure). Conversely you could compare a cloud-native system with a service such as Uber: you only interact with it when needed and do not need to worry about any of the maintenance or upkeep.
Digital Age efficiency
With a cloud-based document management and business process automation platform, your company’s financial and other processes will be more flexible, scalable, accessible and can be adapted to your specific needs. This streamlines all financial and administrative processes and reduces the risk of human error.
In today’s economic climate, every business needs to be quick and accurate, no matter their core industry. From automotive to retail or construction, companies simply cannot afford administrative or invoicing delays and the risks – and costs – associated with this. Opting for an integrated, cloud-native, document management platform which automates data storage, distribution, document management and signing is one of the most astute business decisions you can make in this fast-paced digital age.