Time is our most valuable resource in the world.
Money can be earned again. Health can be regained, even after decades of treating the body poorly. Energy is replenished with sleep, food and exercise.
But time? Time can never be replenished. It’s not as though we necessarily “spend it” – the time will pass either way – but we can only spend any given moment in one way.
How is this relevant to your business?
We’re glad you asked.
If your Accounts Payable Department is still using paper-based invoice processing, your staff is spending significant time doing purely administrative tasks that could be outsourced to technology.
While the energy requirement for these simple admin tasks may not be high, they require time that could be used to do other things.
Opportunity Costs Are Real
Imagine I told you I had a free steak dinner available to you. You get a bottle of red wine, some asparagus or mixed salad greens on the side and even a nice dessert of chocolate cake.
Would you take me up on the offer?
Most people would – and with good reason … steak, cake and red wine are delicious! However, in a very real sense, that steak dinner was not “free.”
While the dinner was free in a financial sense, you had to use time to go to the dinner. Time spent showering, putting on nice clothes, driving to the restaurant, drinking the wine and eating the food.
Granted, that’s a rather appealing way to use time – if you had nothing better to do.
Now let’s change the situation a bit: Imagine I gave you a free coupon for the steak dinner, but you had to go on a specific date and time. No problem right?
Well, it just so happens your friend has a birthday party planned at that exact same time and date. The birthday party is at your friend’s house, so it’s not possible to combine the two activities.
You have to choose one.
This is why economists say there is no such thing as a free lunch. Whenever we choose to indulge in a particular activity, we are giving up the ability to do every other possible activity we could do during that time.
For example, if you go to the party, not only are you giving up your ability to get the free steak dinner – you are also giving up your ability to do work during that time, or play a sport or do those odd household errands that always seem to be creeping up on you.
That is the definition of an opportunity cost – all the things you can’t do, because of something you choose to do.
And that’s fine – as long as the thing you are choosing to do in the first place is a valuable way to use your time.
But what if it isn’t?
Up until now, we’ve been focusing on personal opportunity costs. However, opportunity costs also apply to your professional life as well, and they are just as important, if not more so, in that arena.
Living in Administrative Purgatory
If you’re like most people, the idea of doing hours and hours of repetitive administrative tasks each week sounds horrible.
Unfortunately, if you work in the accounts payable department at your company and you still use paper-based invoicing systems, it’s likely this is your weekly reality.
As an article by Documation states, examining a survey given to nearly 200 people from Accounts Payable, Finance and Procurement departments:
“Forty three percent of survey respondents revealed that their departments were still highly manual and paper-driven, and 36 percent said that lengthy invoice and payment processing time remained a main challenge.”
You have to look out for potential fraud, first and foremost. That means getting everything checked by multiple members of your team … which takes time.
It’s easy to lose papers and misplace invoices leading to your partners becoming upset about overdue invoices and damaging important relationships.
Paper invoices also aren’t the most environmentally friendly option – just think about how many trees a year are sacrificed to the paper invoice gods!
Now imagine the hours you have to spend each week on paper-based invoicing were magically given back to you.
What would that feel like?
You would have more time to:
- Ensure your partners were paid promptly (which always feels good)
- Prepare your monthly and quarterly financial reports (with more time available to present them in an engaging way to your co-workers or boss)
- Work on taxes (sorry, we can’t help you with that one yet)
- Refine your internal accounting processes and best practices
- Get a “bird’s eye view” of what your company is spending money on and why … it would feel great to tell your boss you obtained a discount from a supplier when you realized just how much you were purchasing from them and negotiated a bulk discount agreement?
- Work on your company’s budget
The Solution: Cloud-Based Invoice Processing
If you think getting all of that time back is a dream, think again!
Cloud-based invoice processing can accomplish this in real life. Instead of having email invoices, mailed invoices and faxed invoices to handle, you only have one easy-to-use web platform for paying your partners.
Additionally, cloud-based invoice processing allows you to easily see the overall trends in your invoices that might be missed when stuck in the trenches of day-to-day invoice management.
The Documation article cited earlier lists even more benefits to online invoice management:
- Reduced data entry costs: an invoice management solution will significantly reduce the manual data entry requirement and associated labour costs.
- Cutting the cost of invoice approval and authorisation: an invoice management solution will automate the process of authorising invoices for payment and can save up to 50 percent of the processing costs involved.
- Manual error removed: an invoice management solution will reduce the volume of many manual tasks which in turn reduces the potential for manual error.
- Lower storage costs: the amount of physical filing space is reduced and the cost of electronic storage has been reducing year on year as technology develops.
- Increased security: access can be granted on different levels so only people with the appropriate level of security can gain access.
- Improved supplier relations: when suppliers contact the AP department with a query, the invoice plus accompanying details can be instantly retrieved and the query answered, saving time and removing the cost of returning supplier calls.
- AP staff focused to strategic tasks: with the removal of manual tasks, staff are able to concentrate on value-added work.
Z Hotels Case Study
Z Hotels is one company perfectly demonstrating how powerful cloud-based invoice management can be.
Z Hotels faced a unique challenge when it came to invoice management: each of their 15+ hotel locations is run as an independent company.
That means each and every hotel has to have it’s own invoices for supplies. No “central office” model to make things easy!
Additionally, Z Hotels focuses on providing amazing customer service as a way to differentiate themselves from their competitors. However, their team was spending a tremendous amount of time on paper pushing that would have been better spent attending to customers and living out their company’s mission.
At the end of 2014, Z Hotels had 10 hotel locations and was set to open five more. Normally, this would mean hiring additional admin staff.
However, Z Hotels wisely chose to use InstaSupply instead, and they found it wasn’t necessary to hire any additional admin staff due to all the time they saved from paper pushing.
Remember the opportunity costs we talked about? Well, while time is more valuable than money, sometimes saving time can also save you a significant amount of money. And this was one of those situations.
As a Procurious article about the transition states:
“Since bringing in a new, cloud-based procurement platform, (Z Hotels) have cut admin duties for location staff time down by 90 percent.
Bev King, CEO at Z Hotels, commented on the benefits of the new solution. “Customer service is at the forefront of everything we do, InstaSupply gives us the opportunity to have a much more automated solution that allows our staff to have time to focus on the service to the customers rather than try to fill the administrative gaps. The process has become very easy to use. We’re on the right track.”
That’s the CEO’s perspective. What about things on the ground level?
Miruna Harpa, a Guest Service Assistant at Z Hotels, had this to say:
“I used to spend almost three to four hours a week dealing with invoices, spreadsheets, hassle, numbers … nothing that I like. BUT, now with InstaSupply I spend 10-15 minutes just on the website clicking and having fun with it.
It’s really, really great….They’re an amazing company to work with and they help my job a lot.”
Let’s wrap things up. Here are the main points you’ll want to remember:
- Time is your most valuable resource, both in your personal and professional life.
- When you aren’t spending time on repetitive admin tasks like paper-based invoice management, you have more time to work on things that truly matter.
- When you spend more time on things that truly matter, your business will thrive (and you’ll probably save a lot of money too).