The business environment has never been that friendly for start-ups. Thanks to the advantages afforded to entrepreneurs by the Internet, launching a business around a brand-new idea (even a niche concept) is within easier reach for many. Incredible growth in the start-up space over the last two decades has been seen. There is so much growth that there are now even more start-up incubators, such as Y Combinator, whose purpose is to connect start-ups with the cash and skills they need to succeed.
However, success is no guarantee. 90% of start-ups do not make it, and nearly 20% fail within their first year of operation. Even a start-up with a unique value proposition runs into trouble with competition, consumer outreach, and more. Looking beyond the big picture, start-ups also face immense challenges on the administrative side of things. Those difficulties are especially evident today with an increased focus on remote work and more decentralized businesses. Some of the most critical “back office” tasks are sometimes incredibly burdensome within this environment.
Invoice processing is one of these potential pitfalls. Cash is the lifeblood of every business, but start-ups also depend heavily on their relationships with suppliers. Earning a reputation for missed and late payments dooms a fledgling business before it fully establishes itself. Therefore, for start-ups today, moving away from the traditional means of invoice processing is a must for success.
Below, consider what the process involves, how it creates problems for start-ups, and how groundbreaking technology such as robotic process automation fills in the gaps.
The Traditional Invoicing Workflow
For businesses reliant on invoicing as a key part of their accounting structure, the typical process looks something like this:
- The business identifies a need for a product or service and issues a purchase order to the appropriate supplier or selects a new supplier to fulfill the PO.
- The supplier receives the PO and puts together the order or otherwise renders the requested service. Upon delivery, the client issues an invoice to the business listing what was delivered, the amount due, and payment terms. For example, a business may have 30 days to pay an invoice once received. The invoice could arrive by mail, email attachment, or otherwise online.
- The business must match the invoice to the original purchase order, verify the receipt of everything in the order, and resolve any discrepancies.
- The invoice goes to the appropriate parties in the business for approval, and once approved, the business sets a payment date.
On paper, it may not sound that complex. However, this is until you factor in all the touchpoints involved and how many stages there are in the life cycle of an invoice. That’s not to mention all the opportunities to introduce human error into the equation, especially for start-ups more focused on remote work.
These problems can impact a company’s ability to meet its responsibilities in this space, which include:
- Keep suppliers and clients happy. Everyone likes to get paid on time. Reliably paying early or by deadline showcases reliability to your clients. This in turn, makes them more willing to support you over the long term.
- Minimize expenses by capitalizing on early payment discounts. Properly calculated, early payments allow a business to reduce expenditures without negatively impacting the day-to-day cash situation.
- Avoid the extra expense of late fees and the lost reputation. Start-ups can fall irreversibly behind on their payments if they don’t stay on top of them.
With so much to focus on and so many steps, how can a growing business survive without onboarding an entire accounting team? With robotic process automation, or RPA, humans and software robots work together to achieve valuable results.
How Does RPA Factor into the Equation?
RPA platforms range in complexity and scope, but start-ups can use “low-code” and “no-code” solutions that don’t require an advanced understanding of computer science. So, what do they actually do?
A “software robot” configured using RPA tools acts like a human does. This is not in the sense of machine intelligence, but in following a rules-based pathway through a workflow. These robots interact with computer user interfaces far faster than humans, and they never need to stop working. Also, they don’t introduce new errors into the equation either.
With RPA, an invoicing-based start-up configures an entire robotic system to handle everything from invoice intake to payment remittance. The result is a need for less personnel, a faster process, fewer errors, and more opportunities to build a positive reputation.
What are some of the things you achieve with automation in invoicing? In fact, RPA touches almost every part of the invoicing process in some way, helping businesses achieve excellence and accuracy. Steps suitable for automation include:
- Extracting information from standardized invoices using optical character recognition and inputting that information into accounting software.
- Assisting with PO matching and invoice validation, with pre-configured alerts to send exceptions automatically for human review.
- Automatically route matched invoices to the appropriate parties for approval, or automatically approve invoices that meet specific parameters. RPA can also send automated reminder emails to those authorized for approvals after set periods of time.
- Process payments on time, every time. Businesses can more easily crunch the numbers to find the optimum payment windows for maximizing cash-on-hand and discounts.
By augmenting human capabilities with RPA, start-ups keep their costs down while ensuring accurate and prompt payment of their invoices. Compare that with the old way of doing things, and the competitive advantage is clear.
Don’t Leave Money on the Table ─ Explore RPA Today
With exciting opportunities to embrace automation even at the earliest stages of a company’s development, start-ups can’t afford to overlook the value of RPA. By structuring the business today for success tomorrow and well into the future, it is possible to “future proof” the business and prepare for the next growth stage.
Thanks to the fantastic advantages of using RPA for automating many of the most tedious steps in invoice processing, start-ups can make themselves more competitive and focus on what really matters. As the marketplace grows more crowded, it is essential not to overlook the clear importance of lean, agile, and effective operations at every level. Automation makes that achievable.
