For many company directors or heads of specialist divisions, Excel software is often seen as a Swiss Army knife, capable of performing all tasks, from the simplest to the most complicated. It is therefore not uncommon for companies to use this software to manage the distribution of tasks between different employees. It is also common for accounting departments to use this software to manage salary payments, and sometimes even to use it for customer relations.
Faced with all these possibilities, the software developed by Microsoft often gives the impression of being able to do everything, provided that the person wishing to use it has a good command of it. Many company directors refuse to pay for specialist software on the pretext that Excel already does the job perfectly. Most companies use Excel not only to issue invoices, but also to manage the invoices they receive from suppliers. Although this practice may often seem harmless, it can sometimes lead to misunderstandings between suppliers and companies. In this article, we will look at 5 of the reasons why Excel is not the best management solution for processing and optimising supplier invoices.
What is supplier invoice management?
Supplier invoice management should not be confused with invoicing. Even though these two activities are managed by the same departments, they are two completely different things. Managing supplier invoicing mainly involves checking the conformity of the invoice provided by the supplier and following it through to payment. It therefore involves checking all the information on the invoice before validating it and setting a payment schedule.
The disadvantages of Excel
Although it offers many possibilities, Excel software is not suitable for managing supplier invoices. There are several reasons for this. To manage these types of invoices, it is preferable to use SRM (Supplier Relationship Management). This type of software is more suitable and avoids the risks of poor supplier invoice management.
It’s true that Excel can be used to complete a number of tasks very quickly. But when it comes to invoicing, this software can waste an enormous amount of time and cause malfunctions as a result of errors. What you want to do is save time on this type of task and prioritise others. If you choose to use Excel to manage invoicing with your suppliers, you need to be prepared to carry out a number of tasks manually, at the risk of making data entry or other errors. In fact, you’ll have to carry out the checks, corrections and all the other things yourself. One wrong move on your part can easily lead to an error, and you may be led to believe that the supplier’s invoice has problems or does not conform. Detecting input errors can then prove to be a mission impossible.
Also, with Excel, you have to repeat the same checking steps not only at the end of each month, but also for each supplier. This can quickly become tedious and add up to a lot of processing time with no real added value.
So ditching Excel for purchasing management software such as Weproc avoids this headache.
Monitoring cash flow
Another disadvantage of Excel is that it doesn’t allow you to monitor your cash flow optimally. If you use it to manage your supplier invoices, you’ll soon realise the difficulties involved. First of all, you have to manually edit each invoice and check whether it has been paid or not in order to take stock of your cash flow. This can get tedious very quickly. With an SRM, on the other hand, all these steps are automated and all you need is a few clicks to monitor all the data in real time and check the status of supplier invoices in relation to your cash flow. You’ll be able to easily view all the financial flows from your company to your suppliers, thanks to automatically updated dashboards.
Avoid supplier accounting problems
Accounting departments, whether internal or external, almost always work with specialised software. This software does not always work harmoniously with Excel spreadsheets. So, even if you ignore the two disadvantages we’ve just mentioned and manage supplier invoices with Excel, the chances of problems arising with the accounts are high. SRM, on the other hand, integrates perfectly with accounting software solutions. This will save you time and make you more efficient.
Avoid technical problems
If you choose to use Excel to process supplier invoices, this means that you will save the invoices in question directly on your computer or put them in a folder that you then save on a platform such as Google Drive. But there’s a good chance that the invoice will end up in the wrong folder, or that you’ll get its location mixed up. In such cases, and especially if the name of the invoice has been changed at your level, you have no choice but to go through the entire management process again. In other cases, this situation may even lead you to fail to honour your commitments on time, which could constitute a serious breach of the contract that binds you to your suppliers. What’s more, your computer may suffer a problem that prevents you from accessing your files, leading to delays in payment, for example.
To protect yourself from all these unforeseeable events, it’s best to choose an SRM. This software enables you to manage all your electronic invoices and keep them in one place.
Lack of precision
Excel is not as precise as you might think, and the more data the invoice you want to process contains, the more complicated the task can quickly become. Indeed, the software developed by the giant Microsoft has a habit of rounding off large figures, which can quickly lead to errors in the final result. You can easily get the impression that the figures communicated by the supplier are wrong. Such misunderstandings can lead to disputes. In addition to this disadvantage, it should also be noted that Excel can become very slow when the invoice contains a lot of information. This lengthens processing times and makes supplier invoice processing less efficient.
For all these reasons, it is preferable to rely on an SRM for good purchasing management. With the rise of digital tools, it’s important to turn supplier invoice management into a strategic focus, for better returns. Excel is a good tool, but its functionality is limited. As collaboration between the various players is becoming more and more important in the way companies operate, it is worth opting for an SRM. It can make it much easier for a company’s accounts department to process invoices, for example.
Choosing an SRM for supplier invoice management
SRMs are specialised software packages that enable you to manage your relationships with your suppliers. They incorporate a number of functions to help companies find the best supplier for their needs. These tools also help to prevent conflicts between companies and suppliers by taking into account all aspects of invoice and payment management. With SRM, most invoice management tasks are automated for both suppliers and companies. There are therefore many advantages to paying supplier invoices using purchasing management software. But you still need to choose the right SRM. There are a number of factors that can help:
- Your company’s structure: if your structure is small, you probably don’t have the same worries as a large organisation. Weproc offers a tool tailored to small and medium-sized businesses.
- Price: some SRMs are free, while others cost hundreds or even thousands of euros. The final choice will depend on your budget. At this stage, it’s important not to rush and to carry out the necessary checks.
- Compatibility: your SRM must also be compatible with the other software you already use, particularly those that handle accounting. It is a good idea to contact this department before making a final decision.
Good invoice management requires centralised management so that you have complete visibility of all the relevant information. Gone are the days of manual invoice processing, replaced by the dematerialisation of invoices using purchasing management software, which offers the possibility of optimising the processing process in an automated way. Small businesses and larger companies alike have chosen the dematerialised supplier invoice solution for better invoice processing and electronic supplier invoice payment tracking.
Want to learn more about our procurement management software Weproc? Contact us or request your free 15-minutes demo below!
Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.