How Electronic Invoicing Makes a Financial Impact for Apartment Property Owners
Electronic invoicing is making a significant financial impact for companies across the world, even those in the multifamily industry.
Bell Partners, which manages approximately 60,000 apartment units, announced in October that it has realized an annual savings of approximately $100,000 since requiring its vendors to submit invoices electronically. The announcement follows the adoption earlier this year of a paperless invoicing system that is geared to the multifamily industry.
Electronic invoicing allows vendors to submit paperless invoices to be processed and approved without additional data entry via an automated workflow that integrates directly into an accounting system. Through paperless invoicing systems, vendors submit invoices electronically, which eliminates hand keying of invoice data and lost invoices. Invoices, which are routed through the system and securely stored online, are not only generated faster but late fees can be reduced and cash flow managed better, according to industry officials.
Bell dropped its paper invoicing and adopted a paperless system that not only saved on labor and materials but received quick acceptance from the company’s clients, according to Mark Vernon, vice president purchasing for Bell Partners.
“Since we made the decision to accept only electronic invoices, the adoption rate for our vendors has been incredible,” he said. “In fact, the number of vendors that moved to paperless invoicing grew more than 90 percent in the first six months. We currently receive close to 75 percent of all invoices online, and that number continues to rise.
The only exceptions to Bell Partners’ paperless invoice requirement have been to government entities that are unable to comply, and to a handful of vendors that are not ready to make a switch but are currently under contract for services. In these cases, paper invoices were sent directly to the invoicing system’s processing center, where they were scanned and forwarded to Bell Partners’ system.
“The vendors like the convenience, fast response time, and the visibility that a paperless system provides, so it’s been very well received,” Vernon said.
Streamlined Invoice Management
Paperless invoicing streamlines every aspect of invoice management from receiving invoices, reviewing them for payment, and retrieval later. Users aren’t flooded with files and can avoid oversights or errors with better time management.
Electronic forms are filled out for electronic purchases and paper forms from off-line purchases are scanned and entered into the system so that all invoices end up together. The status of every invoice can be reviewed, and those that need attention are highlighted.
Also, invoices are automatically matched to the corresponding purchase order and budget before being sent for approval and payment. And with the click of a mouse, users can see how purchases are impacting budget.
Going Green at the Same Time
The Environmental Protection Agency estimates that more than 400 million ink and 100 million toner cartridges end up in landfills each year.
A benefit to paperless invoicing is not only saving thousands of trees but companies save on the expense of printing invoices and preparing them to be mailed.
The federal government is even getting in on the action with a recent mandate by the U.S. Treasury Department to order all of its bureaus to implement electronic invoice processing systems by the end of fiscal 2012, which will affect the multifamily industry. By 2013, all companies doing business with the federal government will be expected to conform to a paperless invoicing system. The move, if fully adopted throughout the federal government, could save tax payers $450 million annually.
But multifamily property owners can capture savings right now. Multifamily industry data suggests that per-invoice costs can be reduced on average by 85 percent. A typical paper invoice can cost $13, including the cost of labor/materials, late fees due to processing delays and overnight mail. The cost of a paperless invoice can be as little as $2.
“As consumers, we are accustomed to receiving and paying bills online,” Vernon said. “That same green process has proven to be very effective and tremendously beneficial to our business operating income.”
What do you think? Are you using electronic invoicing in your business? If not, is it something you are considering? Sound off with your comments.