Your Personal Guide to Invoice Data Entry
Revenue is the goal of all businesses. They seek to offer a product or service that people and organizations find useful and are willing to pay for. What a customer pays constitutes revenue for a business and is the life-blood of the organization. Without revenue there is no business. The primary purpose of the business is to be able to generate revenue. Once that is assured, then come other aspects like the costs that may be incurred in generating that revenue so that there is adequate profit left over for the owners of the business.
Generating revenue is not a magical activity. It cannot be conjured out of thin air. There is human effort that goes into it, apart from the input material. Input material could take many forms. It could be an idea, it could be services like power supply and telecommunications, it could be a physical products like computers and workstations, it could be raw material like grain which is converted into flour through a factory process, it could be machinery, it could be physical space from where the business is conducted, and perhaps many others. In short, different kinds of expenses need to be incurred by the business in generating that revenue.
Both revenue and expense are generated as a result of a process known as invoicing.
What is an invoice?
According to Investopedia, an invoice is a “time-stamped commercial document that itemizes and records a transaction between a buyer and a seller. If goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available methods of payment.”
An invoice is not the process of negotiation of terms and conditions. That happens much earlier in the process. An invoice could be considered as the penultimate step through which the seller notifies the buyer that as per agreed terms and conditions, the payment (or part payment) under the transaction has become payable, subject to the credit period and other terms as specified in the invoice. It specifies the calculation behind the amount of money that is being asked for.
An invoice is also a key document from the accounting and taxation perspective. For most government levies taxes and fees, the invoice is used as the source document of a transaction that has taken place.
Historically issued on a piece of paper, invoices have kept pace with the digital journey of humans and are now often issued in electronic formats.
The process of raising and communicating an invoice can be referred to as invoicing.
The Invoicing Process
A supplier, or seller, of goods or services, issues an invoice, generally after completion of the sales process, which happens after the discussion, negotiation and contracting have happened. From a seller’s perspective, issuance of an invoice is a part of their ‘Order to Cash’ process.
A buyer, or purchaser, of goods or services, received the invoice so issued. The buyer is expected to honor the invoice and make payment as per the terms agreed and reflected on the invoice. From the buyer’s perspective, payment of an invoice is a part of their ‘Process to Pay’ process.
In a free market, there is a plethora of choices. You can choose what type of office space you would like to be in. You can decide on who to hire and who not to. You can negotiate with suppliers and buy from the one offering the most favorable terms.
Similarly, there are many options for automation of the financial processes in a company. In a digitized world, each company would have a unique software application from which their invoices would be issued as and when the need arises.
Even though the world is digitized, each company is digitized differently. The seller’s Finance system does not interface with the buyer’s Finance system. Hence, even though the seller has issued a completely digital invoice based on a digital workflow, as soon as it goes out of their system, it becomes a non-digital object.
For the buyer to enable it to once again become a part of their digital process, the invoice will perhaps need to go through a process of invoice data entry.
What is invoice data entry?
It is the entry point into automation of the Accounts Payable process of a company. This process tracks and manages the money they need to pay out to various suppliers.
The corresponding process on the supplier’s side is the Accounts Receivables process. It keeps track of the money they are expecting to receive from buyers.
Once digitized, or data entered, the company’s established processes would kick in and take the invoice through its various stages of processing that might include checking, validation, authorisation, release of payment and finally archiving.
To enable this process to be activated, all relevant details required by the buyer’s system will need to be picked up from the supplier’s invoice and keyed into the system. These are likely to include:
- Invoice number
- Vendor name
- Order reference number (or Purchase Order number) and date
- Date of transaction
- Credit period (proposed date of payment)
- Details of good or services supplied
- Calculation of the amount
- Taxes and levies where applicable
- Total payable amount
- Payment information (how the payment should be made; bank account etc.)
This manual step enables further processing to happen smoothly and, quite possibly, saves a lot more manual effort later on in the process. Depending on the volumes, the company could also choose to deploy technologies such as OCR (Optical Character Recognition) and Artificial Intelligence (AI). These further enhance efficiencies of the invoice data entry process so that only the questionable pieces of information need to be referred to an operator for completion. Everything else is uploaded through an automated process.
Who can benefit?
It is for all organizations who see an opportunity for creating efficiency in their Accounts Payable processes.
Historically, most processes start out manually. They get tried out, tested, validated, updated, and finally established. As transaction volumes grow, the need starts being felt for greater efficiency as the cost of manual processing starts to add up. That is typically the stage at which options of efficiency start to be considered by the organization.
Invoice data entry is no different.
When invoice volumes are small, most activities might be manual. It is possible to track and process a handful of invoices manually, ensure validation, make sure payments don’t get delayed and make the payments manually.
However, it becomes a handful as volumes rise. And often it is a happy problem to solve because a rise in the volume of invoices would mean that business is growing and purchases are increasing to feed the sales that are also increasing.
Many types of specialized businesses have come into existence in the modern world. Accounting services is one such. They handle invoice processing on behalf of their clients. They could be early beneficiaries as their volumes would be large since they do it for a living. Many new businesses are outsourcing supporting functions like accounting directly to such firms in a bid to ensure complete focus on their core business.
The key benefit is digitization which releases the company from frequent rounds of manual effort, whether it is for payment, or extraction of information, or reconciliation with the bank account. Once digitized, information can move seamlessly across systems and processes. It also serves as an input for decision-making with information being available readily in a manner that can be diced and sliced in different ways.
Benefits of outsourcing
While doing it inhouse will deliver the key benefits of the process, there are perhaps opportunities available through outsourcing that can enhance the benefits from the operation.
Invoice data entry is an essential process. It is an activity that needs to be carried out. Hence, the important question is “What is the best way of doing it?” rather than “Should it be done?”
How can your organization benefit from outsourcing this key activity?
Access to the skills of a specialist
Providing a similar set of services across client engagement leads to building of provider skills that can be leveraged for delivering the process more efficiently. This benefits both the client as well as the outsourcer.
oWorkers has worked for multiple clients in this area with client engagements expanding over the seven years of their existence. We have been recognized as one of the top three providers of data services in the world, on more than one occasion.
Hiring the right skills at the right price
With their focus on data entry, providers are able to access talent pools that clients may never be able to access. These are people for whom the job is of value and hence will work hard to deliver. Moreover, based on their educational qualification and experience, they can be hired at reasonable levels of compensation.
oWorkers is a preferred employer in all the geographies it operates its delivery centers in. This gives us access to a steady stream of walk-in talent for employment, reducing our hiring cost. We are also in a position to offer significant short-term ramp-ups to cater to seasonality or other triggers for increased volumes.
Technology and Data Security systems
Based on aggregated volumes across multiple clients and engagements, suppliers are well placed to invest in technology and process improvement solutions designed to deliver greater efficiency and value in the process.
oWorkers has forged relationships with IT companies, some of them being clients. This gives us access to the latest technologies that can be deployed for client engagements, which otherwise clients may not have access to.
We are GDPR compliant and ISO certified and operate out of highly secure facilities.
Business Continuity capability
BPO vendors, at least the established ones, operate out of multiple facilities in varied geographies. This is for a variety of reasons, but one of the benefits it provides to clients is that of business continuity in the event of a shutdown at one place, whether on account of a natural event or a political event or any other.
With three delivery centers located in three different geographies, oWorkers has several clients who have opted to a multi-site delivery model. This enables their operations to continue, albeit at reduced levels, even when one of the sites is not accessible. Our centers are also equipped to operate 24×7 services.
Our business continuity support also includes our ability to continue to operate seamlessly from home or from the workplace. Many of our client businesses have kept running during the strictest lockdowns because we were able to provide continued support from home.
Expanding businesses have many requirements, the ability to handle multiple languages being one. As you grow, you don’t want to keep looking for a service that will be able to support you in your new language of work. With established providers, you will get the benefit of multilingual support, so that you can focus on your business.
oWorkers, with the diverse talent pool that they rely on for delivery of services, is able to provide support for invoice data entry, as well as other services, in over 22 of the most common languages spoken around the world.
Learning a new skill can take time and cost money. Also, operating at a small scale can be more expensive than operating at a larger one. BPO providers, with their specialization and large volumes, can deliver the service at a much lower cost than clients themselves.
Many of oWorkers clients from Western Europe and the US have reported savings of almost 90% as compared to their pre-outsourcing costs. Our costs are transparent, and we offer the flexibility of transaction-based pricing or resource time-based pricing. The client can choose.
Speed of delivery
Supporting a variety of clients from around the world keeps BPOs nimble and flexible. Many of them run 24×7 services. They are also able to turn around transactions much faster than a client might be able to do, because this is their business, not a support function.
oWorkers provides overnight delivery to some clients where the time difference makes it possible. The client hands off a file that contains the information to be processed before they shut for the day. By that time oWorkers is beginning work at one of their locations. The transaction processing is done during the day and handed back to the client before that shop shuts for the day. By that time the client is awakening for the next day. It is as if magically, while they were asleep, the transaction processing was completed. With 24×7 operations, it becomes even more powerful.
Even fully digitized organizations need to do invoice data entry as invoices are often received from non-compatible systems. As volumes rise, keeping the process manual creates challenges at later stages, hence it becomes an essential, and not an optional activity. Many organizations have found value in outsourcing this work to BPO providers, many to oWorkers, like several unicorn marketplaces and IT companies. We hope you will, too.
Your outsourced work enables oWorkers to engage more people from disadvantaged backgrounds, provide them training and give them an entry ticket into the global digital economy.