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3 reasons why fuel retailers must automate invoice reconciliation
If you’re in the fuel retail business, you likely know that the process of approving fuel invoices is no walk in the park. It’s typically a tedious, manual task that eats up hours of valuable time each day and introduces significant operational risk.
With stacks of new invoices hitting their desks daily, employees race against the clock to pay suppliers, missing costly discrepancies as they rush to meet 10-day payment terms. And when payments are delayed because staff can’t keep up, companies suffer the consequences: Eroded profit margins, damaged supplier relationships and a muddy, inaccurate financial picture.
The good news is these issues can be addressed by automating fuel invoice reconciliation.
Reconciliation tools and functionality are often part of intelligent document processing (IDP) software solutions. These solutions ensure that invoices are approved quickly and seamlessly by automatically extracting invoice data and validating it against data in internal accounting or banking systems.
Software that provides automated invoice reconciliation is a must have — not a nice to have — for maximizing profitability and keeping up with the competition. Here are three reasons why.
1. It catches errors before they hit your balance sheet.
Manual invoice reconciliation is, by definition, error prone just like any other manual process. When staff are trying to quickly approve growing stacks of invoices, discrepancies will be missed — and may not be discovered until weeks or months later — resulting in an inaccurate financial picture and a potentially negative impact on cash flow. Not to mention that for each error eventually discovered, staff incur the extra work of requesting and then processing a supplier credit and rebill.
Companies that re-sell purchased fuel take on even more risk: If customers have to be notified about errors in invoices they’ve already processed, the consequences can include a damaged relationship or loss of business.
The worst-case scenario? An unexpected visit from a government tax auditor who ties up your staff for days or even weeks collecting documentation — and finds the discrepancies before you do.
Automating invoice reconciliation means never missing a discrepancy again. IDP software solutions such as ClearDox® Spectrum will validate invoice data against the data in internal systems, and if it doesn’t match, alert staff so they can take immediate action.
2. It significantly increases efficiency and reduces costs.
Manual invoice approvals take hours, with a deluge of new invoices coming in every day of the week. An automated invoice reconciliation solution will drastically reduce the time required to process invoices, and, unlike humans, will never slow down, so suppliers are paid on time, and you remain in good standing.
But it’s not just the reconciliation process that benefits from automation. Because staff only need to get involved when a discrepancy is identified, they have significantly more time to spend on higher value projects that support business growth. It’s a win-win all around: Employees can take on more satisfying work, and in turn, you achieve your strategic goals faster. Furthermore, you no longer have to deal with navigating what is currently a very tight labor market to find new staff willing to help shoulder the burden of manual reconciliation.
3. It ensures an accurate financial picture.
Manual invoice approvals often result in what can be a dangerously out-of-date financial picture since payables often aren’t reflected in accounting and banking systems until days after the invoices are received. Not having an accurate picture of what funds are available at any given time comes at a high cost: Making fully informed decisions and responding quickly to new business opportunities becomes difficult if not downright impossible.
Automating the invoice reconciliation process eliminates these problems. Reconciliation solutions validate invoice data quickly and seamlessly so internal systems provide the accurate financial information companies need to make critical decisions with confidence.
Staying competitive requires automation
In an environment where profit margins are shrinking and competition is tough, fuel retailers can’t afford to rely on inefficient, error-prone manual processes. IDP solutions such as Spectrum that automate invoice reconciliation are a must-have — not a nice to have — because they not only increase efficiency and reduce costs, they also ensure businesses have the near real-time financial data they need to drive business forward and stay ahead of the competition.
Download our e-book, "The fuel retailer's guide to automating invoice approvals," to learn what questions to ask when evaluating invoice automation solutions, what to look for in a technology partner and more.