When is the Best Time to Start Automating Invoices?
Published: 13/08/2023
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This article aims to assist finance managers and directors in deciding whether to automate their company's invoicing process. We believe there is an optimal time to begin automating invoices, and we will explain this in detail along with addressing some common objections.
Automation tools can be costly. Not only do you need to justify their use to yourself, but also to stakeholders, as every business ultimately aims to minimise expenditure and increase revenue. Many fall into the trap of using cheaper or often free (if any) tools, believing they will invest in better solutions once they scale. However, this rarely happens, even for processes of significant importance, such as accounting or sales. So, what about smaller tasks like invoicing?
Naturally, they’re rarely seen as a priority, and we disagree with that. When it comes to automation and overall digitisation, we always recommend starting small. However, there are many processes, and prioritising can be challenging. So, where should invoicing be on the priority list? When is the best time to automate it? Our aim today is to answer these questions.
Here are some pointers suggesting you should consider beginning to automate invoices:
You raise invoices regularly;
It became a stand-alone item on your to-do list;
It takes more than 5 minutes of your time;
You send invoices to multiple clients;
Your offer multiple services that need to be invoiced separately;
You charge different rates depending on the circumstances;
Your company is aiming to scale and grow
You might recognise your situation in some of these bullet points but still find them unconvincing. However, if you do, we have already identified the best time for you to start automating. And
Yes, you read that correctly. No matter how advanced you are in your business journey and whether you issue one invoice a day or ten, the best time to automate the process is now. We already anticipate what you might be thinking at this point, so let’s address that.
That’s a very common misconception, so don’t feel bad for falling for it. At first glance, invoicing indeed isn’t one of the tasks that takes up much of your time. If you already have a template, you simply need to fill it in, and it’s unlikely to take more than 5 minutes. We can add another 2 minutes for emailing it to the client. Overall, spending 7 minutes of your day is not worth paying hundreds for software to automate the process. But what if you have to raise and send 5 invoices?
That’s half an hour. While it’s not too damaging, you could be using that time more productively instead of typing in data. As the volume increases, so will the time required. Many companies, because the task is simple and takes only minutes, convince themselves it’s not time-consuming. Even if you only process one invoice a day, you still lose that half an hour weekly. Therefore, think again about how much time you actually spend on invoicing and reconsider your statement.
The key word here is ‘yet’. Every business aims to grow and scale, and as your client base expands, the number of invoices you need to issue will also increase. There are other factors to consider too - such as the number of contracted workers you onboard for projects, the various services your business provides, and many more. In other words, starting to automate now is a wise investment in the future. This way, you won't be overwhelmed by higher volumes when they eventually arrive.
Furthermore, the sooner you start automating, the more familiar you’ll become with the process. Although invoice automation is quite straightforward to set up, there are still a few complexities depending on the type of solution you choose. It’s definitely easier to begin when you aren’t handling large volumes of invoices, as you’re more likely to notice and correct any issues without causing significant disruption. Additionally, you will make minor adjustments along the way to improve the process rather than simply implementing it. Needless to say, there is a significant difference between the two.
Now that we have covered some of the common objections, let’s explore the additional benefits of starting invoice automation as soon as possible. Keep in mind, these benefits aren’t immediately visible and are more of a long-term investment, so if you’re trying to persuade your stakeholders - make sure they understand that.
To be very straightforward, you don’t want to find yourself in a situation where you ‘need a solution yesterday’. This means you’re already overwhelmed with invoices to process and have to learn on the go, which is hardly ideal given how sensitive financial matters are when it comes to errors. It’s more difficult to set up and master the new solution when you’re already struggling, so it will take more time for you and your team to start utilising the tool effectively. In other words, before you start saving time, you will end up wasting a lot of it first.
That’s why it’s best to start before you actually need the software. This way, you can experiment with it by trying it on small tasks. It also allows you to easily undo mistakes, optimise it for better performance, and ensure everyone on your team is comfortable with the tool before it becomes essential. When you inevitably have to deal with larger volumes of invoices, they will not be a challenge.
Another benefit of beginning automation as soon as possible is that when the software takes over the process, it not only runs it but also collects data. The insights gained will then be presented in graphs on either your dashboard or, if you prefer more detailed information, in granular reports. Such a format makes it easier to analyse, quickly identify trends, opportunities, and areas where the process isn’t operating as smoothly as it could.
This data is essential for optimising the process to achieve maximum efficiency. Moreover, it allows you to easily access the results of experiments you might be conducting, as each change will begin recording data immediately. You can then compare the results from before and after, to determine what works best. Naturally, the earlier you start, the more optimised your process will be when you need it to be fully operational. So, even if invoicing isn’t much of a headache yet, it’s best to start automating now so you’re prepared when it becomes more demanding.
If you’re convinced by the idea, you’ll likely be eager to start automating your invoicing process as soon as you finish reading the article. However, the first challenge is that, if you don’t already have the feature integrated into one of your current solutions, you'll need a completely new tool.
As we’ve emphasised throughout this article, the best practice is to start automating invoices as soon as you raise the first one. Or, more realistically, before you spend hours each week filling them out and distributing them to the relevant parties. There are many solutions available on the market to assist with this, and finding the right one can be equally challenging. Luckily, you’re already in the right place, as invoice automation is something Timesheet Portal can assist you with.
Our system pulls data to populate invoices directly from the timesheets your workers submit. It also considers factors such as differing rates, overtime, expenses incurred, and many more. Once the initial setup is complete, generating an invoice only requires a click and a few seconds. Sending them to your clients directly from the system takes just as little effort. Moreover, you can set invoices to be created and distributed automatically on pre-specified days, without even needing to log into the platform. The Timesheet Portal adapts to your working preferences.
The best time to start automating invoices is now, even if you only raise one invoice a week. The few minutes you spend on it each time add up over the month — consider this perspective, and you’ll see how much time you’re losing. Additionally, there are many benefits to starting automation while the volumes are still low.
Firstly, there is room to make mistakes as they can be easily corrected. It also offers the opportunity to find the best workflow, test different solutions, and train your team. Finally, the earlier you start automation, the more data you will gather to improve your process. Of course, many solutions claim they can handle invoicing for you - it’s easy to get overwhelmed by the options available. As it happens, we also offer this service at Timesheet Portal, and not to boast, it comes with many excellent extras.
So, since you’re here, why not join us from the start?