In 2018 alone, outsourcing accounting business providers charged over $30 billion for their services, and with the increasing demand, it may rise in the coming years.
Managing your company’s accounts requires a lot of labor, and accounts payable scanning outsourcing could be the solution to your staffing problems.
Companies want to be at the top of their competition by improving their service delivery without incurring extra costs. This lead to an increase in automation in outsourcing Accounts payable scanning.
Automating is done through accounts payable scanning software using optical character recognition (OCR). This software extracts the data from your invoices and puts it into your accounting system.
Let’s dive into some pros and cons of outsourcing Account Payable Scanning using Automating Data Entry with OCR.
Pros of Outsourcing Accounts Payable Scanning
Here are some of the advantages of outsourcing accounts payable scanning:
- Error Minimization
- Cost Effectiveness
- Better Resources
- Real-Time Tracking
- Solid Control Measures
- Better Procedures Implemented
1. Error Minimization
Human error is a common phenomenon with an in-house accounts payable workforce, primarily if your company uses spreadsheets to track the accounting processes.
From Machine Learning OCR outsourcing to updated invoice tracking systems, outsourced firms have the necessary equipment and software put in place to ensure that there are no errors in your financial information.
Data Entry Outsourcing companies have automated accounting processes scanning and tons of experience in what they do.
This translates to accurate and faster processing of your financial statements and invoices. As a result, all the other processes and departments in your company are streamlined, boosting productivity and growth.
3. Cost Effectiveness
Hiring in-house financial experts to handle your accounts payable is time-consuming and costly. Not to mention the cost of purchasing new hardware and software systems needed to manage your company’s accounts.
On the other hand, delegating this responsibility to a service provider allows you to work with experienced and well-equipped professionals at a lower cost. This eliminates the need to go through the tedious (and costly) hiring process.
4. Better Resources
A good outsourced partner should handle your accounts payable and provide you with analytics to streamline your financial processes.
Additionally, if your accounts payable firm is tech-savvy, you’ll be well-positioned to learn the latest trends in technology and accounting, such as ML based Data Entry.
5. Real-Time Tracking
Although Data Entry Outsourcing companies do their work off-site, modern technology, and accounting software such as QuickBooks allows you to track every step of the accounts payable process.
You will have real-time access to all your financial data, so you don’t have to worry about missing out on such a necessary process.
6. Solid Control Measures
Data Entry Outsourcing companies usually have control measures put in place to ensure that none of your invoices is lost or overlooked.
Their control systems and processes will help you keep better track of your invoices. This reduces the hassle of searching and locating critical documents when you need them.
7. Better Procedures Implemented
Hiring a data entry outsourcing services provider, creates better bookkeeping procedures. This builds better relationships with your creditors as you’ll avoid penalties due to failed or late payments.
Cons of Outsourcing Accounts Payable Scanning
Even with all the benefits, there are a few downsides to letting an outside party handle your accounts payable. They include:
- Time and Distance Constraints
- Loss of Operational Control
- Increased Risk
- Invoice Duplication
- Conflict of Interest
- Exceptions Processing Issues
1. Time and Distance Constraints
The distance between your company and the Data Entry services provider can cause logistical restraints.
If the location of your service provider is in different time zones, operational efficiency may decline. With an outsourced firm, you lose the instantaneous correspondence provided by an in-house workforce.
To solve this problem, hire firms with established communication channels and a good reputation.
2. Loss of Operational Control
It’s easier for managers to control their accounts payable process with an in-house workforce directly.
This operational control is often compromised when you outsource your accounts payable scanning solutions. However, you can track their activities in real-time to ensure that everything is running as you please.
3. Increased Risk
When you outsource, you trust your Data Entry services provider with vital financial information. If the firm goes out of business or gets hacked, your company data will get compromised.
4. Invoice Duplication
If the outsourced firm charges by the invoice, you may need to be cautious of duplicate submissions.
Since many data entry outsourcing companies lack the tools to account for duplicate submissions, it’ll be difficult to trace back the issue.
5. Conflict of Interest
The outsourcing firm is not legally obliged to disclose whether they’re in business with a competing company. This can cause a severe conflict of interest as your competition may access your data without your knowledge.
As such, it’s critical to do background research on your prospective accounts payable firm to find out if they have a good reputation for upholding confidentiality.
6. Exceptions Processing Issues
Many companies have notable exceptions when it comes to their bookkeeping processes.
If you outsource your accounts payable scanning, the firm may neglect these exceptions because they designed business models to minimize costs per invoice. This will mean that you’ll have to handle the exceptions processing yourself, which is a waste of time and money.
Is Outsourcing Accounts Payable Scanning Right for You?
While accounts payable outsourcing presents its fair share of challenges, the right provider can ensure that you enjoy the benefits of this decision without any risks or challenges.
For accurate and precise invoice tracking, invoice data capture, invoice processing accounts auditing, and PO matching, feel free to contact iTech, regardless of your company’s size. We’ll be glad to help!