Purchase Invoice Coding: Decentralization May Increase Workload and Slow Automation
Distributing the coding of purchase invoices outside the finance department can lead to duplicate work and hinder the identification of automation opportunities, despite the goal of process efficiency.
The coding of purchase invoices is a significant resource consumer within the broader accounts payable process. While companies often aim to improve efficiency by decentralizing coding tasks to accounts payable approvers or managers, this approach can introduce unforeseen challenges.
A primary concern is that decentralized coding can result in duplicated effort. If individuals lack the necessary understanding of VAT rules and expenditure regulations, the finance department may face continuous correction tasks. This means invoices could be coded and reviewed multiple times, negating efficiency gains. Furthermore, non-routine tasks, such as infrequent invoice coding, demand more time and focus from employees who do not perform them regularly.
This distributed model also complicates the identification and implementation of automation. Although a substantial portion of invoices, up to 90%, can be automated based on predefined data like contracts or purchase orders, these opportunities may go unnoticed. For instance, if managers handle the coding of recurring expenses like phone bills, they might not recognize the automation potential or be aware of available solutions. This prevents systematic automation development that could free up finance resources for more strategic functions.
True efficiency in purchase invoice processing is achieved through automation. Systems capable of automatically handling rule-based coding reduce the risk of human error and allow finance departments to focus on exceptions. Solutions like Rillion offer tools to automate purchase invoice processing, providing a reliable method to enhance both efficiency and accuracy.