How Document Digitization Services Revolutionize AP/AR Workflows

This post originally appeared on EO Johnson's blog.

Accounts Payable (AP) and Accounts Receivable (AR) are the financial heart of any business. Their efficiency can make or break cash flow, financial planning, and overall operations. Traditional paper-based approaches, however, often hold back these processes with bottlenecks, errors, and inefficiencies. Enter document digitization services - a game-changer that modernizes AP/AR workflows in ways once thought impossible.

Six Benefits of Document Digitization Services for AP/AR

Let’s be honest – paper record keeping has had its day. While historical methods might seem familiar and manageable, they pose serious challenges such as slow processing times, manual errors, and compliance risks. Secure document management services offer an efficient alternative by transforming physical documents into digital formats, automating processes, and streamlining workflows. Here's how they are changing things on the financial scene:

1. Automation of data entry

Manual data entry is a notorious bottleneck in AP/AR workflows. The task of entering invoice details or recording payment data is time-consuming and prone to errors. Document digitization services incorporate Optical Character Recognition (OCR) technology. The OCR software is used to extract relevant information from invoices, receipts, and checks automatically.

By eliminating manual data entry, businesses can:

• Process more invoices and payments in less time.
• Reduce the risk of human error.
• Ensure accurate financial data entry into ERP systems or accounting software.

2. Streamlined approval workflows

Approval processes for invoices or payments often require multiple signoffs, causing delays. In a paper-based system, documents must be physically moved from one person to another. Digitized documents, however, can be routed electronically.

With document conversion services:

• Approvals can happen in real-time, reducing delays.
• Managers can approve invoices or payments from anywhere, thanks to mobile access.
• Automated reminders can ensure timely approvals, improving cash flow management.

3. Enhanced tracking and visibility

Digitized AP/AR documents can be stored in centralized, cloud-based systems, providing instant access without the need for physical storage.

With improved tracking and visibility:

• Finance teams can monitor the status of invoices, ensuring that none are lost or forgotten.
• All stakeholders can have real-time access to important documents and payment information.
• Businesses can more accurately forecast cash flow by keeping tabs on pending payments and receivables.

4. Improved accuracy and reduced fraud risk

Manual AP/AR processes are rife with errors, from data entry mistakes to missed payments. Such errors can lead to late fees, duplicate payments, or vendor disputes. Document conversion services enhance accuracy through automation, reducing the potential for costly mistakes.

Digitized workflows also reduce fraud risk. Automated processes ensure each invoice follows the proper approval channels, and electronic records make it easier to detect irregularities or fraudulent activities.

5. Cost savings through paper reduction

Reducing paper use is a significant cost-saving advantage. Businesses save on paper and printing supplies and reduce costs associated with filing, storage, and document retrieval.

There are also indirect financial savings. Digitized documents free up valuable office space otherwise used for storing paper files, allowing this reclaimed space to be used more effectively.

6. Compliance and audit preparedness

Businesses in regulated industries must ensure compliance with financial regulations, often requiring thorough documentation of transactions. Keeping track of these in a paper-based system is cumbersome and error-prone. Document digitization services help businesses stay compliant by maintaining a complete, easily accessible record of all AP/AR transactions.

Key benefits include:

• Automatic retention policies to ensure records are kept for the required duration.
• Easy retrieval of documents during audits or regulatory reviews.
• Clear audit trails showing who accessed or approved each document.

Getting started with document conversion services

Document conversion services offer a powerful solution for businesses aiming to revolutionize their AP/AR workflows, helping businesses operate more efficiently and reducing costs. For companies still grappling with paper-based processes, digitizing AP/AR workflows is a crucial step toward modernizing financial operations and improving overall business performance.

If you're ready to transform your AP/AR processes and boost productivity, it’s time to explore how document digitization services can work for you. Contact our team of digital transformation experts to get started.