Businesses can seldom afford to make mistakes in their transactions and proceedings. Since the goal of the business is to maximize profits in an efficient manner, mistakes can prove to be costly and detrimental. One of the largest error-prone processes in any business is the accounts payable cycle, which is responsible for processing and managing invoices.
The errors associated with invoice processing cannot be solely attributed to the business side, as vendors and suppliers have also been known to make numerous errors in their outgoing invoices. According to a survey by the Institute of Management and Administration, 75.8% of vendors and 59.5% of businesses reported error rates of at least 1%, while 14.2% of vendors and 2.8% of businesses reported error rates of at least 5%. The numbers should not be taken as a complete representation of invoice processing results, since only the errors that were known were reported, and not every entity chooses to report errors. This is, at best, a rather generous look at invoice processing , meaning the actual numbers may be far worse. The amount of errors that can accumulate will only result in valuable time and money being lost in forms processing, editing, and recovery.
More and more businesses are now beginning to automate their accounts payable process. Studies show that over 20% of businesses now perform their processing automatically and electronically, a marked increase from a few years ago. Automation software is quick and highly accurate, capable of identifying and extracting data from invoices with minimal human involvement. The less human labor there is involved with invoice processing, the fewer errors there will be.