Automating Intelligence for Rapid Invoice Processing Time

Slow and Unsure: Human Interference Is the Root of Most Evil

Research states that processing a single invoice requires 3–10 days on average, depending on the company itself. The processing time depends on several factors, such as the complexity of the business process, the frequency of transactions, headcount in processing invoices, and technology adoption. We all know that factoring headcount into the calculation will not scale as the business grows.

It is an unproven myth that payment can be delayed by 3–10 days due to processing time. In fact, not only does the processing take up so much headcount cost, it also risks the business in several ways: (1) late payment execution, which affects supplier trust and impedes operations, (2) financial penalties caused by late payment fees, and (3) an increased error rate due to human error, leading to false data or wrong payment.

Facing the Law of Diminishing Returns

One growing cafe chain faces this issue when scaling from dozens to hundreds of branches, as they must keep headcount streamlined and invoice processing time short. They realize that handling fresh produce is complex, frequent, and needs to be executed on time. Relying on existing human resources increases the error rate, resulting in wrong payments being executed.

As they scaled, all procurement processes were centralized at headquarters. The order is delivered to the central warehouse or the branch, depending on the type of goods. Using hard copy, the approval process across branch and headquarters slows down purchasing. An approver SLA can mitigate slow approval, but without the right facility, checking quality has to drop to meet the SLA. This is less critical in ordering, but critical in invoice approval — before executing payment, the finance team must verify the invoice across three layers:

• Is the identity and legal aspect of the submitted invoice legitimate? The invoice is checked to confirm it comes from the relevant supplier and is sent to the correct buyer. The legal aspect is also checked — some buyers require stamp duty (materai) for invoices above IDR 5 million.
• Is the invoice submitted complete with supporting documents? The invoice must contain all required information — item quantity, unit price, discount, tax, tax ID, etc. — with mandatory supporting documents such as the tax invoice, GR (Good Receipt), PO, and signed contract attached.
• Is the information in the invoice aligned with the supporting documents? Known as three-way-matching, the business must ensure the invoiced item has been received and the price aligns with the PO. Invoice data is matched against the GR and PO simultaneously, and supporting documents are checked for alignment.

These steps are carefully executed via hardcopy by the finance team at headquarters to minimize the financial risk of wrong payment. It takes a long time due to the volume of transactions and the amount of information to check. A bigger problem comes from invoices that fail the checking criteria — these must be fully revised by suppliers, creating a lose-lose situation where suppliers are not paid on time and the finance team does double work.

The correct invoice must be approved by the finance manager to confirm it is correct from a high-level point of view. After approval, a payment request is created to trigger payment, which the manager or director must also approve to minimize fraud risk. Both approvals still use hardcopy and take 3 working days.

The Big & Fast Win: Hacking Growth at Scale With a Supplier Portal

Wrong invoice submissions from suppliers and wrong data input from received invoices have a snowball effect. If the submitted document is complete and correct, checking can be done at once — and suppliers are incentivized to do this since they expect payment without delay. The solution is a smart invoicing portal that lets suppliers self-serve. The Paper supplier portal enables suppliers to submit invoices based on the PO received, processed with customized rules. Invoices must be submitted with customized attachments and data depending on transaction type, and all invoices can be stamped with digital stamp duty (e-meterai). Traditional suppliers can also use this technology via mobile and WhatsApp.

Beyond ensuring the invoice is legally acceptable and complete, it can also be checked against the PO and GR in seconds. All documents are centralized and visible to permitted members, minimizing internal disputes. Any dispute with suppliers can be resolved in the supplier portal, where both parties chat with real-time notifications embedded in the document — Paper's collaboration tools bridge supplier and buyer.

The Major Impact

The approval module can apply not just to invoices but also to payment requests and POs. Every approver is notified in real time, and approval can happen anywhere via mobile, cutting approval time from 3 days to less than one. A digital invoice removes the need for anyone to manually re-key data from hardcopy into the ERP — the Paper supplier portal executes document exchange digitally and integrates into the ERP via API.

By adopting Paper, businesses can cut invoice processing time from 3–10 days to less than a day, scalably. Productivity increases and cost can be reduced by up to 80%. We gatekeep invoice submission, automatically check data relevance, provide swift approval, and democratize data to relevant stakeholders.