5 best practices for automating your supplier invoices

For most businesses, managing supplier invoices is a lengthy and time-consuming process. And with good reason: you first have to collect and validate all the invoices, one by one. Then you need to process payments and export the data for accounting. Not to mention you need to file and store the documents for future reference. In the case of bigger companies, this work takes up so much bandwitdh there are usually entire sub-departments within accounting dedicated to handling these tasks, known as Accounts Payable. But for SMEs and micro-entreprises, there isn’t always a budget for hiring someone to work on supplier invoices exclusively, and often the bulk of this work falls to the CFO. Sometimes it’s even the company director who takes on the job and acts as the accountant.

Thankfully there are now solutions out there that help with processing supplier payments. Here are 5 best practices that you can adapt to your business right away.

Automation. This term is being used more and more in the business world. At at first glance, it all seems rather complicated.

Automating invoices simply consists of using digital tools to automate (make automatic) the process of managing invoices.

The idea is to eliminate the manual work involved with processing invoices in order to:

• save time;
• reduce costs;
• prevent calculation errors.

Don’t worry: you don’t need to allocate significant technological or financial resources to automate your supplier invoices. There are simple, attainable ways to make it work for your company. We’ll go into more detail over the next few paragraphs.

There are many advantages to automating supplier invoices.

Saved time and increased productivity

Automation allows you to reduce the time it takes to process payments. And by eliminating low value-added tasks from your workflow, you and your employees are freed up to focus on the more strategic work that is essential to growing your business.

Fewer manual entry errors

Thanks to automation, you dramatically reduce the number of potential errors that occur with manual data entry. There’s no longer the risk that you entered the incorrect VAT rate or the wrong amount in your accounting: your data is accurate, no matter what.

Better archiving of your accounting documents

Accounting documents like quotes and invoices need to be kept aside for 10 years. It’s the law, and the URSSAF or tax Administration can ask for them in the event of an audit.

But 10 years of paperwork makes for a lot of paper. And in this context, it can present a real risk of loss or misplacement. By automating your invoices, everything is archived on a digital database or in your Qonto app. You can retrieve any document in just a few clicks.

Improved business relationships with your suppliers

Maintaining good commercial relationships is absolutely critical as a business owner. And for some sectors - like retail - the growth and long-term sustainability of your business depends on how well you work with your suppliers.

Automating your invoices ensures you pay your suppliers on time. Your partners see you as reliable, and further down the line it can even translate to discounts on future invoices.

And most importantly, optimized costs

Organizing your invoicing allows you to optimize your spending.

For example:

• You reduce the risk of paying late fees.
• You have all the proof you need for collecting VAT from your supplier invoices. Still to this day there are some business who have trouble collecting VAT because of poor invoice management.
• You reduce your overhead costs, particularly as it relates to storing paper documents.

One of the first steps you need to take in order to start automating your invoices is adopting digital invoicing.

Digital invoicing (article in French) is, simply put, an invoice that is sent in digital, not paper format.

Is your supplier still sending you paper invoices? You can try asking them to send it to you in digital format. It will make handling your invoices that much more straightforward. You’ll be better able to store them in a database and use digital tools to extract relevant details (amount excluding tax, with tax, VAT rate…).

Before processing payment for a supplier invoice, you first need to approve it. A step that can often present some challenges.

• Who is responsible for approving the invoice? Is it the director, the head of procurement, the administrative officer?
• How do you verify that the invoice accurately corresponds to the order?
• How do you make sure the invoice corresponds to the quote?

To save time, it’s best to put a clear and effective validation system in place. It could look like this:

• Clearly identifying the person responsible for validating the invoice;
• Setting up a collaborative tool to ease communication between you and your suppliers;
• Putting together a database or a shared document that holds all the necessary documents for validation (quotes, order receipts…).

These days, there are some very effective invoice management tools out there that can help simplify the validation process, especially if your business handles a large number of invoices.

Processing an invoice also means extracting important accounting details from it (e.g. invoice number, date, price excluding tax, including tax, VAT, etc.). Doing this part manually can take time - and runs the risk of having said information incorrectly logged in your bookkeeping.

In this case it could be helpful to capture these details automatically by using a tool with OCR (Optical Character Recognition) technology.

SEPA direct debits are the easiest option for settling your recurrent supplier payments.

All you need to do is send your supplier your bank information (RIB, or relevé d’identité bancaire) and sign a mandate that allows them to debit your account to set up automatic invoice payments. That’s one less task off your plate. Payments happen automatically. And there’s less of a risk of it slipping your mind, which also limits your risk of paying late fees.

What about one-off payments? Qonto can simplify your payments by transfer.

Do you make one-off payments? In this case, settling your bill via transfer is the most appropriate option.

The problem with this method of payment is that you need to manually enter the recipient’s bank information for every new transaction.

With Qonto, payments via transfer are simple. All it takes is a few clicks to send payment through your app. All your supplier information is pre-filled. Just confirm the details and enter the payment amount. What about pending invoices? You can view all your upcoming deadlines at a glance from your Supplier invoices section. That way you can be sure to always pay on time.

As we mentioned earlier, companies are legally obligated to keep their invoices for 10 years. Any tax agent can request these documents in the event of an audit (especially when it comes to justifying your deductible VAT). It is therefore essential that you store and file your invoices in one centralized place. That way you can retrieve and review them quickly and easily all while limiting the risk of loss (and the fines that would along come with it).

Already a Qonto customer? You can forward all your supplier invoices to a dedicated Qonto email address. We’ll make sure it’s linked to the right transaction once it’s paid. Paper invoices? Scan and store them in the app in just a few clicks. You can even upload your supplier invoices in bulk by connecting your Google Drive or Dropbox cloud service to your account.

Qonto recently developed a supplier invoice management feature in addition to its existing integrated invoicing tool.

Keeping tabs on your accounts payable isn’t always easy. So, to help you better handle your supplier invoices, we’ve set up a new tool: the Suppliers section.

The goal is to give you greater visibility of outstanding bills, optimize your cash flow and bookkeeping prep.

Thanks to the Supplier invoices section, you can:

• easily import your invoices to the app from your computer;
• centralize them and track their status;
• view all your payment deadlines at a glance;
• attach your invoice to the right transaction once it’s paid.

And that’s not all. You can also centralize all your beneficiary details and access any of their associated transactions quickly and easily. In one click, you can pull up a list of all the suppliers you’ve ever paid via transfer, as well as their IBAN and transaction history.

Don’t work with a particular supplier anymore? You can remove them in this section. Need to find a particular supplier? Use our filters and find them easily.

You should now have all the tools you need to manage your supplier invoices with ease. Now it’s your turn. Want to save time? With Qonto, you get a dedicated tool that allows you to centralize, track and pay your supplier invoices. Discover more about this feature in our video tutorial.