The Shocking Truth About Manual Invoice Processing

Are you still dependent upon a manual system to process your vendor invoices? If so, not only does it mean your system is obsolete, but you’re simultaneously putting yourself and your business in a disadvantaged position.

Here’s the truth about manual invoice processing: this outdated methodology has been found to have over 101 weaknesses, and all of them contribute to a shockingly poor invoice processing experience. Chances are that if you’re still processing your vendor invoices manually, you are encountering these classic problems and harming your productivity. Below are some of the drawbacks associated with manual invoice processing techniques, an explanation of how such techniques have been undermining your accounts payable (AP) processes, and why you need to ditch them ASAP.


Why manual invoice processing is non-optimal for any modern accounts payable team


Invoice processing


  1. It’s costly. On average, it costs about $25 to manually process just one invoice. It has also been reported that invoices with special conditions (like exception and non-PO invoices) can cost as much as $50 to manually process. If your organization manually processes thousands of invoices annually, you can just do the math! Manual operation is hardly ideal.
  2. It’s time-consuming. With a manual system, it takes days or even weeks to approve an invoice. Your team spends more time to get less significant work done. This further contributes to higher cost of operation, as you’d have to pay more people for longer working hours. But, wouldn’t it be better to get more done in less time, and with as little human workers as necessary?
  3. It causes you to lose money. Issues of duplicate payments, late payment penalties, overpayments, fraud, missed discounts, and forgotten credit notes are all very common with manual invoice processing. Whenever this happens, you lose money and your company’s bottom line is impacted.
  4. It’s boring. And often annoying. This leads to corporate tedium and ineffectiveness for your team. Nobody wants to sit at the same old desk and enter mind-numbing data for hours, every business day, but unfortunately, that’s what manual invoice processing is all about.
  5. It’s prone to human error. Since processes are manned by error-prone humans in a manual system, mistakes are inevitable. They can even lead to bigger issues, which only ever means wasted time and money for your organization.
  6. It’s a lot of hassle. Manual invoice processing is often convoluted and inconvenient. After a vendor sends in an invoice, you have to print it out, register it into the ERP or accounting system, extract information, match details, send it back and forth for different workflows like approvals, prepare checks, and do a lot of other complicated stuff. Who wants to do any of that?
  7. It’s outdated. Clinging to a manual system nowadays makes it feel like you’re still operating in the 1940s. Smart, modern businesses move on and comply with the best technology can offer. Relying on an antique system puts you in the backseat and creates opportunities for your competitors to outclass you. Bad news!
  8. It’s been impeding your team’s communication. With a manual system, communication becomes a drag, slow, and expensive. There’ll even be issues of miscommunication, something that slows down processes, makes your team seem incompetent, and makes you lose money.
  9. It requires more hands. A manual invoice processing procedure needs more human workers to function, given that the related processes are hand-operated. And you would have to pay all of those humans.
  10. Invoice information is not readily available and accessible. In a manual system, invoice information is stored locally in a physical office. This means you can’t access it outside of the office. There’s absolutely no way a team can work remotely in this way, which impedes productivity.
  11. It delays progress. In a manual invoice processing system, since your workers are always sitting on the same desk entering data or performing some other related tasks, their time is not freed up to work on more value-adding or growth-oriented action items. This slows down advancement and development, making it difficult to implement new strategies and make progress on other fronts.
  12. It adds to discrepancies. A manual approach requires vendors to send in paper invoices. Due to manual attribute, discrepancies are more common, as there are likely to be differences between the paper documents.
  13. You can’t easily track your accounts payable metrics. With the right accounts payable metrics, you’d have an insight into how effective your AP processes are, so that it becomes easy to identify and resolve bottlenecks. A manual system doesn’t let you track this very easily.
  14. Financial reports become taxing to prepare. With a manual system, preparing financial reports for tax, audits, or other purposes becomes a task nobody wants to complete. You would have to manually collate information, go through heaps of documents to find numbers, compile notes, and more.
  15. It wastes your resources. If you’re operating a manual invoice processing system, you had better be ready to put in more resources than necessary. This includes paper, office space, and all the other materials required to process invoices by hand and store paper documents.
  16. It’s vulnerable to security risk. A manual system is easily exposed to security problems like data theft, data loss, and the like. When stored locally, anybody can illegally access and use your data as they want. Data security is important in accounts payable because it represents the financial operation of your organization and suppliers.
  17. It’s the reason why your AP team is inefficient. Every business organization wants their employees to be highly efficient. But how do you do that with a system that’s inefficient in itself? It’s paradoxical, and it simply won’t happen.
  18. You lose visibility and control over your processes. With a manual AP system, you can’t easily control workflows or monitor progress. Processes easily get stuck and tasks fall through the cracks more readily. Workers’ accountability is compromised.
  19. Your workspace becomes disorganized. Due to manual invoice processing being a paper-intensive activity, your work environment will become cluttered with paperwork. Studies repeatedly find that a cluttered work environment makes you less productive.
  20. It makes work unexciting. A vital key to a satisfying career is to love and enjoy your work. With the disadvantageous characteristics of a manual invoice processing system, it becomes almost impossible to enjoy what you do.



There’s a better way to process and approve invoices


Thomas Edison quote


Having made it clear that manual invoice processing is not the best solution for your team, we won’t leave you hanging on what to do instead. The essential strategy that teams around the world are using today is workflow automation.

Workflow automation uses technology to streamline your processes. It offers solutions to all the many problems associated with manual invoice processing system, outlined above.

With a workflow automation solution set up at your workplace, you can simplify workflows, save time and money, eliminate errors, plus more. 

We of course recommend you start automating your accounts payable workflows immediately. Take the first step by signing up for a free Pyrus account using the form below. We’ll set you up with a demo and show you and your team everything they need to know in order to start working more efficiently right away. It’s fast and easy, because anything less would be unacceptable 😉