Contract Management Software automates workflows, helping you to easily manage the approval of invoices before they reach the accounts payable system. (This process saves time and money by reducing the number of invoices that are paid incorrectly).
Ah, invoices – the vehicle we use to pay and be paid in business. Managed well, invoices can be a source of real savings and a very smooth ride. However, if your system fails to review an invoice prior to paying it, the journey can be anything but.
The good news is that many Contract Management Software systems are now designed to minimise invoicing errors as well as take care of all the rest of your contracts’ lifecycles.
Manual vs Digital
If you haven’t made the switch yet to Contract Management Software, you’re probably still using a manual system. Unless you have a team of trained monkeys chained to their desks 24/7, meticulously checking all the steps in your invoicing process, you’ve no doubt already experienced mistakes.
Manual systems were once the only option. All businesses used them and invoicing errors such as incorrect pricing and incorrect product descriptions were considered commonplace. These days however, digital breakthroughs have raised the bar, speeding up the workflows of our competition. To keep up, we need to get more done in less time, as efficiently as possible.
Even without errors, manually processing invoices can take considerable time. Outdated processes also make it difficult to spot trends such as missing or incorrect information being entered on a regular basis. This can lead to extra work for staff who need to go back through old data, which can then lead to delays in invoicing clients and customers who expect prompt payment terms (for example 30 days after receipt).
Automation – The Game Changer
One of the most empowering features of Contract Management Software is automation. Imagine having a staff member only hired to check details all day and alert you to problems or remind you of deadlines! Good Contract Management Software will be that staff member for you, a benefit that has now led many businesses to go digital.
With Contract Management Software, automated workflows cover all lifecycle stages and when it comes to invoices, will apply receipts, notify the accountable manager to review that invoice and if correct, approve it.
The result is a workflow that can be easily passed on to the accounts payable system for payment processing. Alternatively, Contract Management Software can also automate the workflow to record the correction of an invoice, and retain those changes for future audit purposes.
In short, automating your invoices with Contract Management Software will:
Furthermore, automating your system to review your invoices is not just going to save you dollars – it’s also going to help you to manage compliance and protect your company from potential legal liability. Way back in 2006, The Aberdeen Group released The Contract Management Benchmark Report: Procurement Contracts Maximising Compliance and Supply Performance. That monumental study has been highly quoted ever since, because it found that on average, only 65% of procurement transactions were compliant to their contracts. It was also determined that an average of only 73% of suppliers were compliant to the pricing and discounts that were originally agreed upon.
Perhaps you’ve experienced the trouble that ensues when a vendor has invoiced you for items that they shouldn’t have. Services or products outside of the contractual terms of agreement may have been added without you noticing. The invoice may have been paid without review, resulting in a dispute and much time wasted attempting to right the wrong. With invoice review automation, you can catch such errors and inconsistencies – and even outright fraud, before it becomes a problem.
Make Informed Decisions
If we return to the analogy we used at the beginning, that an invoice is like a vehicle, we can almost certainly think of good Contract Management Software as a very secure, well-serviced parking facility. A good contract management system houses and monitors your invoices with automation, the same feature that can also help you make informed decisions about who you do business with. Based on previous performance, you’ll know whose contract is worth renewing and when it is time to re-tender.
It’s not exactly an essential decision to switch to Contract Management Software from a manual system, but ultimately, it’s the kind of decision that will reward you and your business with efficiency, reduced stress and real savings, many, many times over.