Cost of Saving Paper Invoices

In a typical business scenario without utilization of document archiving, the original paper invoice is filed for safe keeping. The invoice is subject to retrieval several times over its life span. Since almost every corporate policy will not allow the original invoice to leave the safe confines of Accounting, a copy is made when required. One problem is that often the person requesting the copy then files the copy for their direct access. They may be retrieving the copy on behalf of one or more persons and they may also make and store their personal copy. If you ask each person why they are keeping copies they will tell you they want quick access.

Some of the more common request includes:
o Operations – there may be specifications or details on the invoice that they need related to how to handle, use or store what was purchased. It may be for services and they want a record of when and what vendor performed the services.
o Purchasing – if there was a problem with the invoice, they may want a copy so they can write comments and then keep with paper copy of purchase order.
o Cost Accounting – they may need information related to inventory balance, inventory valuation or to support accruals.
o Tax Department – they often retain copies to support sales tax calculations or to aid in disputes on what is taxable.
o Internal Audit Department – they require invoices for numerous audits.
o External Auditors – as with the Internal Audit Department, external auditors require supporting documentation related to specific audits.

It is not uncommon that in addition to the original, one invoice may be stored 5 – 10 times. If the invoice is multiple pages the time and space required for storage increases significantly.

Any of these copies may be accessed several times during its life span.

To summarize…we have the cost of the actual storage space, the cost of reproduction equipment, the labor cost to file and retrieve. This cost is now compounded when you consider the cost of ensuring proper record retention. When the original invoice is destroyed proper retention management must ensure all of these copies are destroyed.

As the economy drives corporations to search for all possible means to improve bottom line profitability, they have found Accounts Payable a significant area for opportunity. One of the many values derived from optimizing and automating Accounts Payable is that digitizing the invoice through scanning and document management removes the need to make copy on copy. All references by all groups will be through the SAP solution linked to the applicable invoice image.

See SAP EcoHub for more on AP Optimization: