The two halves of finance
Why you need incoming as well as outgoing finance document management processes
Finance is all about the checks and balances of income and expenditure.
Just as are there two sides to every story, two halves to every football match and two faces on every coin, finance departments must manage incoming and outgoing documents.
They must also set up processes to support them.
Interestingly, it’s not just about controlling cash in and cash out, though for cashflow and liquidity reasons the flow of funds must be managed carefully.
Documents which are received into the organisation may relate to purchases as well as to sales orders – while the same is true of documents sent from the business.
These document processes might be paper-based, time-consuming and cumbersome, so while they’re critically important to cashflow operations, they are often inefficient and expensive to manage.
In this article, we’re going to look at what the incoming and outgoing document management processes in finance are, why they are important and how their efficiency can be improved.
Examples of incoming finance document management processes
Two great examples of incoming document processes that need to be managed efficiently are sales orders and supplier invoices.
The documents received into the business relating to sales orders and purchase invoices clearly have very different purposes, but when they are paper-based (rather than digital), they share many of the same inherent inefficiencies:
- Time consuming and manual
- Document time delays
- Printing time an inconvenience
- Costly printer consumables, postage, stationery
- Inefficient storage and retrieval processes
Both sales order processing and supplier invoice processing are key, yet if moved from paper to digital can be made significantly more efficient.
Outgoing finance document management processes
For most organisations, maintaining a healthy and positive cashflow is core to business operations. Central to this is the process of sales invoicing.
Quick and effective invoicing is key to cashflow, and can only be achieved if there is highly efficient outgoing document management process in place. Sending of duplicate invoices, statements and reminders are also all key to keeping cash coming into the business and constraining debtor days to a minimum.
Yet as with the incoming document management processes outlined above, this is difficult to achieve efficiently if the processes are manual and paper-based. Printed documents and postage not only cost more, but are inherently slower to despatch than digital ones.
And while cashflow is key, the efficiency of outgoing document management can also have an impact on customer service and supplier relationship management.
For example, when customers and suppliers request copies of invoices, statements or delivery confirmations, they expect their request to be fulfilled quickly so that their query or issue can be resolved quickly and satisfactorily.
Such efficiency is likely to impress supplier and customer alike, resulting in a positive perception of customer, hence improved customer/supplier relations.
Highly efficient finance document management processes can be instrumental to cashflow, customer satisfaction and overall business efficiency. They key lies in transforming paper processes into digital ones for both incoming and outgoing documents as both are integral to the finance department’s operations.
We recently held a webinar, where we analysed in more detail the challenges that finance teams face with their sales and purchasing processes, in addition to demonstrating a solution to these challenges.
Watch the webinar here.