Guide to Invoice Processing Automation
Lost invoices, missed payments, fraud, and endless emails to fix a simple mistake. Ring any bells? Fine when you’re starting up, but as your business grows, so does the paperwork your accounts payable team has to handle. Manual processes are fraught with problems. Costly errors, unhappy employees, and vendor relationship issues. I’m going to walk you through invoice processing automation and how it’ll help you accelerate efficiency and accuracy.
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What’s the cost of doing nothing? Your business becomes irrelevant. Your competitors leave you standing. You’re done.
Say hello to the age of digitization and automation. An age in which boring, repetitive tasks are taking a back seat. An age in which invoice process automation is eliminating manual data entry and human error, reducing invoice processing time, and unclogging communication bottlenecks.
In this guide, I’ll discuss the benefits of automated invoice processing and how it’ll help streamline your invoice workflows. How it works. Solutions.
Now would be a good time to check out the Best Document Workflow Software & Guide.
Table of Contents
- Do companies still use manual data entry?
- What is invoice processing automation?
- Invoice to pay process
- Benefits of invoice processing automation
- How does invoice processing automation work?
- Which AP processes can I automate?
- Invoice processing automation solutions
- How to choose the best automated invoice processing solution
- Features of the best invoice processing automation solution
- Invoice processing automation FAQs
- Free eBook: Cost of doing nothing | Zero in on accounting automation
Do companies still use manual data entry?
To be fair, the companies that still use manual data entry have good reasons…
- Limited budget and/or operations
- Sensitive data
- No training budget
- No risk of cyber attacks
Unfortunately, the reasons aren’t sustainable.
As a company grows, so does the paperwork. Productivity, performance, customer and employee satisfaction will suffer. Typos, late payment fees, lack of quality control, and more, will increase. The business’ growth will be stunted.
Manual data capture – capture data, enter invoice data, check data matches PO.
Manual data capture steps…
- Take invoice from file
- Find fields in document
- Retype data from the fields
- Compare typed data to purchase order
- Close file and open new one
- Rinse and repeat
Let’s hope there were no typos.
The manual invoice process, depending on quantity and quality, can take a week or longer. Hammered by communication bottlenecks, misplaced decimal points, spelling mistakes, and a badly managed invoice processing system across multiple teams.
“The direct and indirect costs of manual, paper-based invoice processing amounts to an eye-watering $2.7 trillion for global businesses.” According to a 2018 Goldman Sachs.
Manual invoice processing is inefficient and expensive.
Following the COVID-19 pandemic, many companies transitioned to fully/partial remote working. For accounts payable teams still following manual invoice processing, this poses a problem. AP teams working remotely can’t keep track of paper-based invoice information.
Manually entering invoice information into a company’s ERP system is a tedious process. Invoice approval takes a hit. Payments can be delayed or missed. Invoices may go astray, and clerical invoicing errors can mount up. This puts a huge strain on the business and the customer experience. Not to mention all the money spent on document printing, filing, and storage.
What is invoice processing automation?
You may be surprised to know that – in this AI world – some companies advocate invoice processing by humans. People sweating over manual data capture and processing methods.
I get the “it’s the way we’ve always done it” mentality, but seriously! It’s the 21st century.
Don’t you want to speed things up a bit? Save some money? Reduce human error?
Invoice processing automation is a thing. A big thing.
So, while many businesses still receive invoices by fax, paper invoices are slowly being replaced by digital invoices. Regardless, invoice automation software will cut the time it takes for your team to capture data and process invoices. Paper or otherwise.
AI invoice processing automation tools will help you manage your entire finance workflow from a single platform. No more bouncing from one tool to another. No more human errors. No more risk of fraud.
To learn more about fake invoices, recognizing red flags, and avoiding being hit by an invoice scam, check out How To Identify Fake Invoices.
Save time. Reduce stress. Increase accuracy. Work more productively.
Check out our P2P Automation Drives More Value From Every Transaction blog post for more details.
Invoice to pay process
The best automated invoice processing software will improve the entire invoice-to-pay process. This process is also called the procure to pay, and describes all of the tasks completed by your accounts payable department.
End-to-end AP process…
- Request for products or services
- Invoice to pay process
- Purchase order stage
- Receipt of the products or services
- Processing of the invoice
The invoice-to-pay process does require time and money, but automating the invoice process will result in savings over time.
Look to invest in machine learning invoice processing software. Software like Rossum, that includes machine learning and AI, is on of the most effective ways to automate your AP process. Instead of employees spending hours extracting data and reformatting invoices, AI-powered software does it for them.
Benefits of invoice processing automation
Manual invoice data capture means your accounts payable processes force your team to spend hours and hours extracting and entering invoice data into accounting systems. This leads to AP teams unable to focus on higher value-added activities that will increase business productivity and competitiveness.
Putting a stop to time-consuming and error-stricken manual tasks will revolutionize how your business manages the end-to-end process of accounts payable. Faster payment approvals, visibility of your cash flow, strengthened vendor relationships.
AI OCR software – optical character recognition – is a technology that will automatically extract invoice data. Bringing time and cost-savings to businesses, while ensuring accuracy and efficiency.
Check out some of the benefits of automating your accounts payable software…
- Increase accuracy and mitigate errors
Algorithms in AI-powered invoice processing automation will find and correct typos and errors. Yep, you’ll achieve 100% accuracy. No more late or missing payments.
- Streamline digital processes
Repetitive and error-prone tasks, such as receiving invoices and entering invoice information, can be automatically categorized according to predefined rules. Sent to the appropriate team for approval and payment.
- Perform automated matching
Accounts payable automation software provides two-way or three-way matching – comparing the invoice amount and information to the purchase order and the receipt of the goods. Removing the risk of incorrect or duplicate payments.
- Increase visibility
Have a clear picture of the status of each invoice as it moves through the process. So you can monitor payments, find late payment, and spot possible issues with invoices.
- Manage supplier relationships
By ensuring timely and accurate payments, AP teams can strengthen relationships with suppliers and customers. Streamlining the customer journey and improving the customer experience.
- Save money
Reduce overheads and training with invoice processing automation. And, with reduced human error, you’ll save money on bad debts that occurred due to the wrong invoice data being entered into your system.
By automating invoicing processes, an intelligent document processing solution such as Rossum will help your business turn your accounts payable into a profit center. Rossum’s AI document processing solution brings machine learning, computer vision, natural language processing (NLP), and robotic process automation (RPA) to the table.
This helps you pre-process, extract, process, validate, segregate, and sort all your accounts payable documents. And… you can integrate with existing and widely-used business software tools.
Result? 90% of your team can be redirected towards more business-critical tasks.
How does invoice processing automation work?
With speed and efficiency.
Your team is going to love you when you introduce an automated invoice processing system, as it waves goodbye to those thankless administrative tasks. No more stressing over missing transactions, late payment fees, and unhappy vendors.
Let’s look at a standard automated invoice system workflow…
- Invoice received
Your accounts payable team receive an invoice. Data from the invoice is captured and entered into the system using OCR technology. Translating the information into digital text.
- Invoice validated
The invoice processing automation software validates the accuracy of the captured data and confirms that all the required information has been collected. The validation process compares the data with predetermined standards and matches with supplier records, such as purchase orders.
- Invoice approved
Next, the invoice is sent for approval via your accounting department. Each business has its own approval process and can include multiple people, depending on the value of the invoice. Some invoices can be approved by a manager. Some need the big boss.
We’ve recently enhanced our platform with invoice approval workflows. Our customizable automation feature streamlines recurring business processes, minimize costs, and drives rapid ROI. Our all-in-one, end-to-end invoice processing platform captures any invoice in seconds, declutters your application stack, and provides actionable data as a result of a standardized process…
- Payment delivered
Once approved, payment is made and a notification is sent confirming an electronic transfer of money to the vendor.
- Invoice archived
Following payment, the invoice is stored in your AP digital library. Forever.
If you’re looking for invoice processing software to automate invoicing, the best invoice app will integrate with your current business systems. And, an easy-to-use invoice processing automation software means your business won’t have to use multiple apps to achieve your goal.
Working with artificial intelligence, the time it takes for invoices is reduced. This is just one of the benefits of the best invoice processing automation software.
Rossum’s Intelligent Document Processing platform is an easy-to-implement, template-free software with an intuitive UI that you can use for all your invoice processing needs. From receipt to payment, we’ll make invoice processing fast, accurate, and secure.
Which AP processes can I automate?
AP invoice processing automation will automate the following tasks…
- Data entry
You AP team will be equipped to quickly and accurately capture data from invoices. Saving time and ensuring error-free data entry.
Rossum’s template free, low code, document-agnostic platform is designed to be managed by business users, not your IT team.
Find duplicate payments or bills for the same purchase order, and avoid paying twice.
Automate your approval process to reduce time spent manually reviewing every single invoice, before payment.
Generate reports on your spending, financial trends, debts, etc., to enable data-driven decision making.
Invoice processing automation solutions
Let’s look at some automated invoicing solutions…
PDF to Excel converters
Does your finance team want to convert received invoices into an Excel spreadsheet?
You need to go the automated invoice processing Excel program route. The best invoice processing software will read, extract, and enter data from an invoice and feed into the correct fields in your Excel sheet. With human involvement at the bare minimum.
For more details on how to automate invoice processing in Excel, you can read our blog post. But, in summary…
Manual data entry is a viable option if you’re a start up or a small business. In the long term, it won’t scale as your business grows. As the amount of invoices increases, so does the risk of human error and increased training costs. Not to mention a poor customer experience and employee churn.
Spending all day manually entering data is boring. Of course, people get distracted and make mistakes.
There is a wide range of PDF to Excel conversion programs to choose from. Capturing information directly from invoices, they are accurate. But, efficiency will suffer, if you’re receiving invoices with varying formats. The need for human input is likely.
The most popular PDF to Excel converter is from Adobe. With the PDF being its baby, it’s a no brainer.
“More than five million organizations around the world rely on Acrobat to create and edit the smartest PDFs, convert PDFs to Microsoft Office formats.”
It’s easy to use, works cross-platform, and has a great set of features.
PDF to OCR – template-based
Template-based OCR software extracts data from invoices and exports it to an Excel spreadsheet. How much time and money is saved depends on the quantity and quality of invoices you’re working with.
While template-based OCR technology is accurate, time has to be allocated for setting up the templates and rules for each vendor in your supply chain. Setting up a template can take several hours, so if you work with a changing list of suppliers, this solution may not suit your business.
PDF to OCR | Cognitive invoice data capture
Invoice processing automation solutions are the most efficient and cost-effective way to extract invoice data from PDFs and upload to an Excel spreadsheet.
Take a look at this example of how quickly you can convert multiple invoices…
Step 1. Upload your PDF invoice to your data extraction platform.
Step 2. Verify data fields have been correctly assigned.
Step 3. Download all your PDFs in CSV format.
Step 4. Review your Excel spreadsheet.
Invoice billing software
The best invoice billing software will help you track projects, estimates, and invoices. It’ll automatically convert quotes to invoices and track billable hours, ensuring you receive prompt payments. You’ll also see a reduction in human error.
There are several invoice billing solutions available online for basic invoice processing automation to improve your billing process.
One of the most highly rated solutions is Square Invoices. It was built for small businesses and has a free plan and a paid plan. The free plan includes…
- Unlimited invoicing, estimates, and contracts
- Unlimited users and customers
- Access from anywhere
- Send via email, SMS, or link
- Accept payments 24/7
The paid version, which is only $20 per month, offers advanced, time-saving features for growing businesses.
Invoice billing software will help you organize invoices. But, if you’re a large company, it’s not going to be robust enough to tackle the amount of paperwork you’re pushing.
With data entry being vital to the invoice billing process, automating your data capture and entry is the most efficient way to improve your financial department tasks.
Invoice processing automation that incorporates deep learning technology – as does Rossum – will capture data from any document and convert it into a usable format for billing purposes.
QuickBooks | Invoice processing automation
Heard of QuickBooks?
QuickBooks is an accounting software package developed in 1983. It’s an invoice processing automation software designed for small and medium-sized businesses. An easy-to-use accounting software that tracks your business income and expenses, customizes invoices, runs reports, and manages your financial information.
Automated tasks include…
- Time tracking
- Sales tax management
- Bank reconciliation
- Inventory tracking
QuickBooks invoice API capabilities present another way to customize invoice creation.
If you’re interested in giving QuickBooks a test run, it offers a free 30-day trial. If you’re a small business, I’d say it’s worth a look. But, the software doesn’t automate the entire invoice process.
Yep, I’m back to suggesting an AI-powered software like Rossum which is a more efficient, accurate, and scalable document processing solution.
How to choose the best automated invoice processing solution
It’s an important decision, there are considerations and questions to answer. Think about speed, security, scalability, and cost. Understand your current process and determine your goals.
What do you need from your invoice processing automation solution?
- Automated invoice processing
- Approval workflows
- Payment processing
- Accounts reconciliation
- Vendor management
Ensure that your invoice processing choice…
- Integrates with your current accounting software or ERP system
- Has an intuitive UI
- Requires minimal onboarding and training
- Provides robust and friendly customer support
- Is customizable to your specific business needs
Features of the best invoice processing automation solution
Okay, this is where I go big for Rossum. The best invoice processing automation solution on the market.
Pre-processing – automate data capture at speed
Automated classification of documents cuts out data entry errors that can lead to payment charges and penalties, and eliminate supply chain disruption.
- Extracts data from documents in all formats and across channels
- Automates communication to avoid manual follow up and bottlenecks
- Filters out spam and duplicate documents
- Routes documents with a flexible queuing system
Validation – save 82% of time on validation
AI-powered data capture that understands dynamic documents with fields that move or change.
- Reads documents like a human, adapting to changes in style and formatting
- Automates data extraction to guarantee documents are processed according to predetermined policies
- Minimizes human time spent validating data over time
- Data extraction engine algorithm that learns with every human keystroke
Post processing – eliminate manual data capture
Stamp out manual tasks like calculations, sorting, or email follow ups on your processed documents with AI data capture technology.
- Custom automations with our extensible low-code interface
- Taps into pre-built extensions and automation functions
- Clears communication bottlenecks with third parties and shares real-time updates
- Keeps everyone on the same page for all your document processing
Invoice processing automation brings huge time- and cost-savings benefits to your business. Yes, you can generate an invoice from Excel data. But this semi-automatic process can introduce errors and still needs manual data entry.
Plus, tracking invoices with Excel spreadsheets can cause security issues. Those sneaky unauthorized users can access computer systems to read or steal the invoice information stored on your computer systems or Google Drive.
In general, the majority of business data comes in unstructured formats, such as text data, PDF documents, email attachments, and invoices. Rossum’s AI-powered Intelligent Document Processing – IDP – solution will transform unstructured and semi-structured data into structured and usable information.
Hard to resist, no?
Our cloud-based IDP solution will automate your business processes, even if you ask it to handle large volumes of documents. It enables you and your team to process invoices in less time than it would to process documents manually or set up rules and templates using a traditional OCR solution.
Rossum will help you minimize your manual processes and shift to a digital-based automation workflow for greater efficiency, accuracy, and peace of mind.
If you’re considering automation, check out How To Do Workflow Process Mapping blog post. The first step towards automating your business processes.
Invoice processing automation FAQs
Reduce invoice processing time. Eliminate manual data entry errors. Increase employee productivity. Reduce labor costs. Identify insights that will enable data-driven decision making. Increase control and transparency. Improve the customer experience.
Intelligent OCR software extracts information from documents and validates it according to business rules. For instance, mapping a purchase order number. It then uploads the data into your ERP system for payment processing. Rossum’s AI-powered solution captures invoice data regardless of format or style. It’s template free, low code, and offers an intuitive user interface.
The most efficient, cost effective, and accurate way to automate invoice processing in Excel is with a cognitive invoice data capture software. It allows you to batch-convert PDF invoices in a matter of minutes. The cognitive data capture solution will learn to recognize data fields and accuracy will increase the more you use it.
Use a digital invoicing system to enhance and streamline your procure-to-pay cycle. Automate your accounts payable process with e-invoicing, a single dashboard to streamline the approval process, eliminate manual data entry, create compliance guidelines, automate general ledger coding and classification, automate your three-way matching process.
Free eBook: Cost of doing nothing | Zero in on accounting automation
While this guide has walked you through the advantages of automated invoice processing software – what, why, options, etc. – there’s a ton more information in our free eBook – Cost of doing nothing | Zero in on accounting automation.
Download our free eBook, in which we explore the true cost of doing nothing. Of persevering with manual document processing in accounts payable. It highlights the benefits of accounting automation, questions to ask an IDP vendor in your RFP, and the impact of doing nothing. Our goal is to help you devise an action plan for your business’ prospective AP automation strategy.