It is a difficult question to answer the number of invoices that can be processed in a day. The reason being the requirements that differ because of the scale of the company. Yet with this blog, we have tried to come up with an answer. Also a solution that can help you make the process exponentially faster.
Invoice processing is a critical function for every accounts team. They may deal with a large number of invoices from customers besides dealing with the other accounting work. One of the vital questions you may have is the number of invoices that an accountant or your entire accounts team can process in a day or month.
As the problem of invoice processing can be different for different companies, depending on the scale of operations, you need to know several considerations. This article helps you know the ideal number of invoices your team can process daily. Furthermore, we also help you understand how automation can play a vital role in this aspect.
An invoice is a bill for goods or services delivered by sellers to buyers. It includes information about the goods or services, date, amount, and payment terms. Invoices are a critical part of a sales process and help sellers get paid and account for the taxes.
The basic components of an invoice are:
It has the name and address of the client along with their company name. Sellers can also include contact details such as email or phone numbers for future reference.
Sellers need to list the items sold on the invoice along with additional charges, such as shipment or insurance. They should also list the quantity and price per unit to avoid misunderstandings about products or services and how much they cost.
In most cases, this will be the date on which the seller has delivered the product or service. However, in some cases, it may include the due date. It's vital to include this to avoid disputes over on-time payments.
Payment terms vary based on each industry. Invoices should include when the seller intends to receive the payment.
The number of invoices your accounts team can process daily depends on several factors. However, based on a general estimate, an accountant can process around 4-5 invoices in an hour, 32-40 in a day, or 640-800 monthly.
The accurate number would depend on your business setting and the complexities involved. You will also have to factor in the error rate if you have manual processes. When there are errors, your team must spot them at the earliest. It would take much longer to fix if your team spots it at a later stage.
Manual processes are time-consuming, less effective, and will cost your company a lot in the long run. If you have a large business, you can spend almost a few thousand dollars per employee each year. Small businesses that do not have many invoices to deal with can have manual processes. However, automation has unmatched benefits for businesses of all scales.
Let us look at the various steps that your accounts team needs to follow to process invoices.
The first step in processing an invoice is to put it into the ERP (enterprise resource planning). In this system, you can keep track of your invoices and payments and create reports based on your business data. Your team will have to recreate line items and record the related amounts. It is a resource-intensive task that also remains prone to human errors.
The next step in processing an invoice is to match it against outstanding purchase orders. It ensures that your business has not already paid for the goods or services on the invoice. If they cannot correspond the invoice against a purchase order, it will be difficult to understand if the invoice is valid or if the purchase was authorized.
It involves assigning a code or other identifier to each transaction to track and sort them later. Once your team codes the transactions, they need to record them in detail on the general ledger by including relevant details as necessary. It ensures all your financial information is accurate.
You will have to address outstanding issues with the invoice and confirm everything is in place for processing. It could be as simple as ensuring a PO number matches up with the items on the invoice or checking if any other missing details will prevent sending it to the next step.
When an invoice gets processed and verified, your accounts team will have to route it to the concerned individual and see if they have approved it. Approvals are a step that can often take up a lot of time and delay the payment for your vendors. It is best to have improved internal processes to ensure approvals don’t get stuck.
Once your accounts team receives an approved invoice, they will enter their approval into the system and release it for payment. The concerned member of the accounts team will cross verify the details, make the payment, and record the details in your internal systems.
Invoices can be a real headache to process manually, especially when they're all over the place and your team has no way to find or keep track of them. Fortunately, there are several ways to make invoice processing easier. You can automate the process by using an intelligent document processing system.
Here are some of the benefits that come with automating your invoice processing:
Invoice processing is one of the most resource-intensive tasks in accounting. There are high chances your team will make mistakes if they handle it manually. By using an automated system, your team can reduce manual errors that can prove costly in the long run.
This goes hand-in-hand with reducing errors. Automating your invoices means you will need fewer people to process them. It also means less time spent on repetitive tasks and more on other critical work like managing accounts payable and receivable.
Handling invoices manually can be stressful because it requires attention to detail and involves looking up information in multiple places. Your team may also compromise on their productivity, which will reduce your overall business profitability. Automation helps them overcome these challenges.
Processing invoices manually is a time-consuming and expensive process. Not only do you need to hire someone to process each invoice, but you also need to pay them for their time and expertise. Typically, processing an invoice manually costs a minimum of around $15.
If your business processes 100 invoices per month on average, it will cost you around $1500 monthly or $18,000 annually. That could be a lot of money, especially if you have a lean business setup. If you have a large organization, your costs would be much higher as you would need to process several invoices. Automation is thus the logical option to reduce your invoice processing costs.
Here are the various types of invoices your accounts team may need to process. The more the variety, the more complex and time-consuming activity it will be for your business.
It is a general invoice that almost every business uses. Regular invoices come with a general format applicable for every business.
The seller issues it when they have to issue discount or refund due to an error.
It is the opposite of the credit memo invoice, and sellers use it for the amount the buyer owes them.
It is a combination of credit and debit memo invoices.
Sellers use it to give an estimate of goods and services that a buyer has enquired for. It does not hold any legal importance.
Businesses get these invoices from their contractual employees hired to work on an hourly basis.
Employees raise these invoices to get reimbursed by their employers for their business-related trips.
Sellers use it for international transactions when the goods involve clearance from customs and need package information.
These invoices are usually a part of larger projects where the service provider can raise regular invoices after completing assigned project milestones.
Services providers who offer the same set of services to a business over time use it.
Services providers raise final invoices after they have delivered the agreed work to their client.
It is applicable for exceptional cases where the buyer has missed payment deadlines. The seller can also include late fees as part of the past due invoice.
The number of invoices your business can process depends on several factors, including your business scale and the complexities involved. However, automating the entire process can immensely help. Invoice automation tools like Intelligent Document Processing (IDP) automate the entire billing process, making it easier than ever to process payments.
VisionERA is a modern-day intelligent document processing platform designed to take over the crucial aspects of invoice processing. Your accounts team can experience 3x productivity and devote more time to revenue-contributing activities instead of drowning in paperwork. VisionERA comes with a continuous learning mechanism which allows it to adapt itself to your business and offer continually improved accuracy and processing speed.
Get a free demo of VisionERA by contacting us today.