Fed up with manually processing invoices? If you’re not, then you should be.
Even better, there’s a perfect solution just waiting that could provide you with better financial control while reducing the time and resources your accounting/accounts payable department needs to approve invoices. That solution is technology, or more specifically automated invoice processing.
Automation has helped businesses realize better accuracy, security, and speed in their invoice processing procedures for some time, but many businesses are yet to climb on board. This is despite the technology having proven itself to have been more cost effective in the long-run that manual processes.
So how exactly does automated invoice processing work? And how can it benefit my business?
Why not stay manual?
Even just 10 years ago, the traditional invoice approval process would see employees manually entering vendor invoice information - such as tax and VAT numbers, supplier or client address, purchase order number, and more - into a data sheet which was then sent for approval to line managers and decision makers. Only then could pay be approved and sent off.
The whole process doesn’t sound incredibly complicated for one vendor invoice, but imagine you have hundreds or thousands coming in every month. Manually processing invoices goes from a menial task to one that takes up hours from an accounts payable staff’s working week.
"The State of Automation in Finance" report surveyed more than 1,000 finance leaders across Europe, the UK, and the US. The research uncovered that finance leaders and accounts payable staff are still yet to fully adopt automated invoice processing, with plenty of organizations still using manual processes in their day-to-day tasks.
20% of organizations surveyed are not just using manual processes for their vendor invoice, but are using old-fashioned platforms such as Excel spreadsheets for their accounts payable operations. In the same survey, just 18% said they had adopted full automated invoice processing in their company.
What is automated invoice processing?
Unlike searching for, pulling out, and analyzing invoice data manually, automated invoice processing brings an end to the days of manual data entry by automatically extracting data entering your finance system and automatically pushing it into your ERP systems, such as SAP or Netsuite.
The advantage of this is that processing a payment can be done almost instantly in just a few clicks. All finance processors have to do is review and validate that the information is correct, which is displayed on the platform in front of them.
In addition, automated invoicing accurately extracts invoice data and validates it by matching it up with predefined Purchase Order (PO) numbers, bank account details, invoices received against the purchase order number, or receipts generated against the total invoice. Only once these have been accepted does the technology send the information into the company’s chosen ERP system to process pay, creating an almost touchless process that only requires a quick validation from the accounts payable staff.
No matter the format or file type of the invoice - such as Word document, PDF or other - the technology captures invoice data through Optical Character Recognition (OCR) technology as well as artificial intelligence. The important thing about this is that finance professionals no longer need to set-up these types of rules in their manual system, saving time, money, and resources.
How does automated invoice processing benefit my business?
Automated invoice processing allows businesses to digitally submit, view, and approve invoices with the touch of a button, providing full visibility and control over vital financial data. By seamlessly connecting and simplifying processes to the whole accounts payable team, automated invoicing can, according to Yooz case studies, see companies reduce their paper processing costs and invoice processing time by up to 80% compared to manual processing.
And it also takes away the risk of human error. Because unfortunately, tasks such as data validation or inserting information into spreadsheets are more prone to error with humans at the wheel than automated systems. This in turn which can lead to dreaded late payments.
However, with a fully automated system that takes care of the small stuff, you increase your team's productivity. Employees now have time to focus on other tasks that require a human element such as customer service, critical thinking, and problem-solving roles. At the same time, management gains access to real-time data that helps make better strategic decisions. Decisions that are based on reality rather than projection.
Business can no longer afford to ignore the benefits of automated invoice processing
With automated invoice processing software, not only can you gain complete visibility and traceability into the history of invoices, but you can also gain details such as the date the invoice was received, time the invoice was processed, and if the invoice was rejected for any reasons.
It’s in this way that invoice processing becomes more secure. Instead of guessing if the email, request, or purchase order number you’ve just been sent is real, invoice automation technology puts the right information in front of you so you can quickly and easily see for yourself.
This has the additional advantage of allowing auditors to easily obtain historical invoice data for security and auditing reasons. With this information at hand, the accounts payable department can swiftly uncover security red flags, improve invoice processing procedures, and make more informed decisions, faster.