How you store invoices matters
In a day and age where speed and accuracy are critical, why are so many companies still drowning in paper invoices? The shift to digital storage isn’t just a trend–it’s a necessity for increased productivity and efficiency.
According to MineralTree’s 8th Annual State of AP Report, 37% of companies anticipate hiring delays in finance or accounts payable over the coming year. As a result, it’s vital that companies evaluate their current workflows to improve productivity and efficiency across their departments. Invoice storage, in particular, is one area where companies can reduce manual efforts so teams have more time to focus on adding value to the business.
Key takeaways
- Invoice storage is important for financial audits and regulatory compliance. Therefore, it’s important that companies be able to quickly access their data.
- Digital invoice storage offers several advantages over traditional physical storage, including reducing fraud risk and improving accessibility.
- AP teams can take several steps to improve their invoice storage process, including embracing the cloud and centralizing storage.
Key differences between paper-based and digital storage
There are several key differences between digital and physical invoice storage. Keep scrolling to find out what they are.
Security
The cloud mitigates the risk of theft and physical damage while providing a secure environment for invoice storage. When security threats emerge, patches are regularly deployed to ensure that systems remain safe with no downtime.
Data retrieval
Invoice data can be retrieved from anywhere at any time, which is important for remote and hybrid workers. In fact, 51% of today’s account payables team is hybrid, while 16.6% are fully remote. Companies can also give invoice access to their vendors if needed, without partners being able to access the ERP system.
Insight into invoice status
Over 20% of AP teams are spending 11 hours or more addressing vendor inquiries and 83% of inquiries are related to payment status. If teams are leveraging a paper-based process, it can be difficult to determine the status of a particular payment, leading to wasted time sifting through piles of invoices.
Audits and compliance
AP audits can become expensive since auditors are typically paid hourly. When documents are not easy to access, this can add additional costs and time to the auditing process.
Staffing
Many organizations are struggling to retain finance talent during today’s accounting shortage, making it vital for organizations to prioritize digital transformation. According to MineralTree’s 8th Annual State of AP Report, 58.4% of companies are processing the same or more invoices with the same size team when they embraced AP automation. Digital processes also allows teams more time to focus on value-additive initiatives.
Analytics and reporting
Digital invoices also make it easy to gain insight into cash flow to better forecast the impact of accounts payable on the business. With the right tool, companies don’t need to wait for invoices to be posted to the ERP system to leverage the data.
| Paper-based storage | Digital storage | |
| Security | Physical invoices are subject to the risk of theft and physical damage, including flooding. | Digital storage provides robust security measures to reduce fraud risk while mitigating the other challenges associated with physical storage. |
| Data retrieval | Data can only be retrieved if physically in the office. | Data can be accessed by the accounts payable team from anywhere, making digital storage ideal for hybrid and remote teams. |
| Insight into invoice status | Manual processes force teams to sift through paper invoices to determine their status. Without a digital footprint, it can be difficult to determine an invoice’s payment status. | Digital processes make it easier to determine if invoices have been paid. If these invoices have not been paid, teams can determine when these will be scheduled for payment. |
| Audits | Audits can become more expensive if information is difficult to find. | The audit process is easier since AP-related documents can easily be found. |
| Staffing | Paper-based processes require more effort and staffing resources. | Digital processes give staff time to focus on bringing value to the business. |
| Analytics | Paper-based processes make it difficult for companies to leverage the data from invoices. | The right tool will allow companies to use data upon invoice capture for more accurate reporting. |
Common challenges in invoice storage
Implementing a new system can be a transformative step for any organization, but it often comes with its own set of hurdles, ranging from internal resistance to technological integration issues and data security concerns. Addressing these obstacles effectively is essential for a smooth transition. Here’s a look at some of the most common challenges companies face and how to overcome them:
Resistance to change
When updating any process, employees may be resistant to adopting new technologies, since these changes may require updating preexisting workflows. However, team leaders should showcase how digital invoice storage makes their employees’ jobs easier with minimal effort.
Integration with existing systems
Not all integrations function the same. When choosing an invoice storage system, it’s important to select a solution that can sync seamlessly with your company’s ERP, so that it remains the source of truth for the business.
Data security concerns
Many organizations have concerns over data breaches. By leveraging a cloud-based accounts payable system, teams offload security risk onto their cloud provider. Additionally, cloud systems have robust teams in place that continuously deploy patches to their systems without downtime. A digital storage platform also allows companies to share important invoice data with third parties (such as vendors) without granting access to the ERP. Filing cabinets, on the other hand, are highly susceptible to risk, including physical threats such as flooding or theft.
What are the benefits of digital invoice storage?
Digital invoice storage offers many advantages that can significantly enhance business operations. From streamlining access to documents to bolstering security and reducing costs, the shift from physical to digital storage can transform how organizations manage their invoicing processes. Keep scrolling for a closer look at the key benefits.
Improved accessibility
Digital storage makes it easy for teams to find the information they need. Documents can be accessed by team members from wherever they are working, which is important for hybrid and remote worforces or teams spread across several office locations.
ERP syncing capabilities
The right document storage solution can sync documents with your ERP system for easy access and record keeping.
Increased security
Cloud-based invoice storage offers robust security measures to combat fraud. Additionally, digital invoices are not subject to physical damage such as fires or flooding.
Less expensive storage
Office space to house filing cabinets filled with paper invoices can get expensive, especially for companies that have a high-volume of payments. In comparison, cloud storage is inexpensive and allows teams to store more data more easily.
Storing invoices: 6 ways to improve the process
Effective invoice storage is critical for streamlining AP and boosting overall productivity. Below are 6 strategies your team can implement to improve the AP document storage management process in relation to invoices.
1. Digitize your invoices
The right accounts payable software solution can digitize invoices through OCR technology, making using the information in AP analytics and reporting easy. However, OCR isn’t infallible, so it’s important to look for a solution that combines this technology with additional tools, such as human review, to ensure the information is accurate.
2. Decrease risk by storing invoices in the cloud
Cloud-based accounts payable makes tracking invoice status and finding important documents easier. With cloud storage, invoices are not subject to the same risks as paper-based invoices, such as flooding, fires, or fraud.
Additionally, the right AP automation tool will allow you to share invoices without granting access to your ERP system, further reducing your company’s risk.
3. Reduce storage costs
Paper-based storage can be expensive since invoices take up physical space. For companies handling a large number of documents, these costs can escalate quickly. Digital storage is typically a more cost-effective option for organizations.
Did you know? MineralTree offers unlimited storage with its platform. Since ERP systems may charge extra, this additional storage can help companies manage a high volume of invoices.
4. Centralize invoice storage
For companies with multiple locations and offices, it’s important to have a centralized location for teams to pay and track invoices. When Affinity Dental Management experienced rapid growth, they faced challenges related to a decentralized process for managing invoices. They chose to partner with MineralTree to automate this process. Now, when invoices come in, they are sent to an AP-specific account or uploaded via PDF into the system. This process has made it easier to manage and pay invoices.
5. Embrace a paperless process
A paperless AP process can make finding important documents and information easier when needed. Teams can also determine the status of invoices without sifting through vast amounts of paper.
6. Automate the entire process
AP automation technology not only improves the invoice storage process but can also enhance the overall productivity of the accounts payable team. By further reducing manual processes, AP teams can focus on strategic business initiatives such as reporting and payment optimization recommendations.
Final thoughts
Digital invoice storage is an important initiative for companies looking to transform their financial department. However, companies can reap more benefits by automating the entire AP process to reduce manual processes and increase efficiency across their financial department.
Book a demo to learn how MineralTree can help you enhance security and efficiency in your AP process.
Invoice storage FAQs
Tl;dr? If you’re short on time the frequently asked questions below provide a quick snapshot of what you need to know about invoice storage.
1. What is the best way to keep records of invoices?
Digital storage is the best way to keep records of invoices since it reduces the risk of physical damage while preventing fraud risk.
2. Why is storing invoices important?
Businesses need to keep accurate records for financial audits and AP compliance. Since accounts payable directly impact cash flow, companies can leverage this data for better forecasting and overall cash management.
3. Do I need to keep hard copies of invoices?
If invoices are stored with a storage system in the cloud, companies do not generally need to keep hard copies of invoices.
4. How long should digital invoices be stored?
How long invoices should be stored will depend on a company’s internal policies. According to the US Chamber of Commerce, “document retention guidelines typically require businesses to store records for one, three or seven years. In some cases, you will need to keep the records forever.” They also suggest that if a company is unsure, they should consult an accountant or lawyer.
