Your Complete Guide to Automated Invoice Processing
Automated invoice processing streamlines accounts payable by automating tasks like data extraction, validation, and database entry. This improves turnaround times and data quality, addressing one of the most time-consuming tasks linked to business finances. In this article, we explain how it works. Let’s dive in.
Why is Automated Invoice Processing Necessary?
Manually processing invoices is time-consuming and prone to errors. An average company spends 25 days processing each invoice, increasing drastically with volume. This leads to massive losses of time and resources. Further, manual processing risks errors and double payments. It also leaves the door open for fraud, scams, and misappropriation, with over 74% of organizations falling victim in 2020 alone.
Both delays and security risks strain supplier relationships and hurt productivity. Automating the invoice process addresses these issues by streamlining accuracy, efficiency, and security across the board. It ensures records remain digitally integrated and updated in ERP systems.
How Does Automated Invoice Processing Work?
Automated invoice processing streamlines traditional manual tasks by using an Electronic Document Management System (EDMS). Invoices are digitally stored in a centralized database, making retrieval easy. Students who purchase courses like OSHA 10-hour construction online benefit from seamless access to payment records and invoices.
The process begins with the automatic scanning of incoming invoices, fed into a digital accounting system. The system converts invoices into text-searchable documents, tracking data such as supplier name, purchase amount, and details of goods/services. This data is actively monitored within the ERP system. If an invoice fails data validation, it is flagged for manual review. Approved invoices are processed for payment following the necessary levels of organizational approval. This automation reduces manual errors and delays, ensuring efficient invoice management.
Benefits of Automated Invoice Processing
Automated invoice processing offers numerous benefits over manual entry:
Unified Control Console
Accounts payable automation simplifies invoice processing through a unified platform like Docsmo. This platform provides features such as recurring billing, single-time invoicing, various charging models, subscription management, self-service for suppliers, and real-time payment updates, all accessible at the touch of a button.
Reduced Manual Entry
Manual data entry is inefficient and time-consuming. According to a Coupa survey, over 51% of respondents acknowledged this issue and sought improvements. Automated data entry reduces processing time significantly, making it ten times faster than manual methods.
Reduced Margin of Error & Improved Security
Manual invoice processing is prone to errors due to fatigue and lack of concentration. The 2020 Payables Insight Report by Level Research highlighted data discrepancies as a major pain point for 23% of companies and data fraud for 16%. Automated invoice processing ensures data accuracy, matching extracted data from supplier invoices with company records to reduce fraud risks, thus enhancing efficiency and security.
Transparent and Traceable Invoice Records
Traditionally, paid invoices were stored in hard-to-retrieve files. Automated invoice processing uses an Electronic Document Management System (EDMS) to store data in a centralized digital database, creating an audit trail and making invoices easily retrievable. This system reduces the chances of misplaced or missing invoices.
Monitoring & Customization
Manual invoice records are difficult to monitor due to unsystematic arrangements. Automated processing stores invoices transparently in a centralized database, allowing real-time expense monitoring and easy discrepancy reporting.
Automation software offers customization options to streamline workflows according to business needs and integrates accounting processes with CRM tools for synchronous operations. It also supports adding custom logos, texts, stamps, and other details, enhancing compliance with company standards.
Early Payment Discounts & Improved Supplier Relationships
Automated workflows improve efficiency, helping companies meet deadlines and avail early payment discounts offered by suppliers. Timely payments keep suppliers satisfied. Accounts Payable Automation software also provides a platform for suppliers to receive real-time updates about their invoices, preventing disputes and maintaining good relationships.
Automated Invoice Routing
Manual routing of invoices for approval is a significant pain point for over 37% of companies. Automated processing software allows users to set up designated workflows, ensuring invoices reach the right approvers. Custom notifications remind approvers of pending approvals, ensuring timely processing.
How to Automate Invoice Processing for your Business?
To automate your invoice processing, start by evaluating your needs:
1. Invoice Volume: Consider in-house automation if you process hundreds of invoices monthly. For thousands of invoices, opt for a comprehensive automated solution.
2. Identify Blockers: Determine if issues are due to slow processing, inaccurate data capture, or manual tasks hindering growth.
Here is how to go about finding a solution:
1. Pre-Trained API: Look for solutions like Docsumo, which offers a pre-trained invoice processing API. It captures key data with minimal training and adapts to changes in invoice formats using Machine Learning and AI.
2. Customization: Ensure the solution can be tailored to your needs. Docsumo allows customization with just 50 invoices.
3. Custom Approval Workflow: Choose a solution that streamlines approvals. Docsumo’s auto-data validation and auto-assign feature help speed up the process and ensure data accuracy.
4. Integration: Ensure the solution integrates seamlessly with your ERP system, like Docsumo, which updates data and provides real-time analytics for better decision-making.
Why Choose Docsumo?
Docsumo provides a cost-effective and scalable automated invoice processing solution using artificial intelligence and machine learning. Our intelligent data extraction eliminates errors from any invoice format, allowing accounts payable teams to focus on more strategic work. With unparalleled 100% accuracy and simple integration, our end-to-end solution streamlines payment processing.
Schedule a demo with us today to make a hassle free transition to automated invoice processing.
