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3 mins read

Automated Invoice Processing

What are the benefits of automated invoice processing?

by Yooz on 10.15.2021

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Fed up of manually processing invoices? If you’re not, then you should be.

There’s been a perfect solution right under your nose that could provide you with better financial control while reducing the time and resources your accounts payable department needs in order to approve invoices.

Automation has helped businesses realise better accuracy, security, and speed in their invoice processing procedures for a while now, but many businesses are yet to climb on board - 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?

 

 

What are the downsides to manual invoice processing?

 

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.

A Yooz survey of more than 1,000 finance leaders across Europe, the UK, and the US uncovered that finance leaders and accounts payable staff are still yet to fully adopt automated invoice processing, with plenty of organisations still using manual processes in their day-to-day tasks.

20% of organisations 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 analysing invoice data manually, automated invoice processing extracts data entering your finance system and automatically pushes 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.

Automated invoicing accurately extracts invoice data and validates it by matching it up with predefined Purchase Order 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. What this means for finance professionals is that they 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 processes.

 

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 - which can lead to dreaded late payments.

 

But with a fully automated system that takes care of the small stuff, accounts payable teams have more time on their hands to deal with tasks that require a human element, such as customer service, critical thinking, and problem solving roles.

 

Business can no longer 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.

 

Struggling to choose the best AP automation software? Watch our replay here