Many accounts payable teams are familiar with the practice of spot-checking invoices against baseline documents. This practice is similar to when you skim over an important email; eye-catching information stands out while details are often skipped. Missing details leads to miscommunications and wasted time, and in the case of invoice auditing, overlooking billing discrepancies can lead to significant financial loss.
The human eye may detect glaring errors during invoice reconciliation, but it is unrealistic to expect the AP team to catch every mistake, especially at the line-item level. Moreover, modern finance teams know achieving accurate and reliable accounts payable processes is nearly impossible without tools like AP automation.
Matthew Tillman, CEO of OpenEnvoy, recently connected with Karen Webster, CEO of PYMNTS, to discuss how businesses risk losing millions to inaccurate invoices. According to recent data, about 10% of all invoices are duplicates. With a staggering number of invoices containing errors, it is common for firms of all sizes to make inaccurate, duplicative payments.
Here are some key takeaways from the conversation:
- The OpenEnvoy system recently identified $42 million in duplicate billings based on a sampling of $500 million in enterprise spend. (With one customer being able to catch a $518,000 overbilling tied to a single invoice).
- Contract manufacturers and logistics providers were the worst offenders of inaccurate billing.
- As businesses scale, many run into a problem where they have thousands of invoices, and it becomes impossible to check every line item on every invoice. Duplicate billing is a painful byproduct of the sheer volume and lack of standardization of invoices up and down supply chains.
- To change this requires a change in mindset, where AP functions leap from a cost center to a revenue center. By being open to automation, AP teams can increase their revenues quickly, even with limited team sizes.
To minimize risk, finance leaders can take action by investing in preventative technology to identify duplication and discrepancies before payments are issued. In addition to cost savings, automation also enables teams to create time for more impactful, engaging projects. Accounting has traditionally been a compliance-driven cost center. However, as finance leaders reduce costs associated with tasks like invoice processing and payment remittance, they can shift resources to data and strategy to drive further value.
Are you ready to eliminate wasted spend from your finance function and focus on value-driven tasks? Schedule a demo with an OpenEnvoy expert today, visit https://openenvoy.com/contact-us/.