Processing invoices is typically one of the most time-consuming processes for any business’s accounts payable and finance departments. Although the manual process varies from small businesses to larger ones, it still remains time-consuming and prone to errors. It required the involvement of multi-stakeholders and often faced double handling, duplicate payments, and delayed reimbursements. 

Therefore, it should come as no surprise that more and more financial teams are using automated invoice processing to overcome these difficulties. Finance teams can save time and money, make cross-team collaboration more accessible, and promote business growth by eliminating tedious, repetitive activities that take countless hours each month.

Let’s dig in more about how to automate invoice processing. 

What is automated invoice processing?

Accounts payable automation replaces the manual components of accounts payable with automated invoice processing software or digital technologies.

Various AP automation technologies are available and they all work on the basic assumption that purchase orders and invoices can be submitted and approved digitally rather than handled and deposited physically.

The automated data extraction and invoice matching processes are revolutionizing the accounts payable system. By removing error-prone human data entry, these solutions will automatically extract invoice information and then insert this data into your AP systems.

Automated invoice processing solutions are designed to speed up teamwork, decrease oversight, and improve accuracy, which in turn aids in the business’s growth.

Your finance teams may gain from improved visibility and control over the entire AP process, depending on the automated invoice processing software you use.

What challenges did companies face with manual invoice processing?

  • Delay in payments

It takes a long time to enter paper invoices manually into the AP system. Additionally, approving them takes longer when several approvers from various departments delay the payments. 

  • Fraud risk

Businesses need to handle financial documents carefully. If your invoices are the target of fraud, theft, or cyberattacks, these instances may harm your reputation and cost you money.

  • Unmatched data

Because human error is a given, manual data entry in invoices is prone to hiccups and mistakes. Due to the time and effort required to find and fix these anomalies, this may add to the workload of the accounts team.

  • Lost bills

There is a high probability of losing invoices in a sea of paperwork, especially if many people are involved. Finding the unaccounted-for invoice becomes a tedious task that your accounts team would be better off without.

  • Payment done twice

Double payments are one of the biggest problems with paper invoices. The likelihood of inputting incorrect information and issuing duplicate payment requests rises as the accounts team becomes preoccupied with processing bills for numerous clients.

These may result in a great deal of confusion, follow-ups, time waste, and lost productivity. This could have a domino effect and eventually harm your reputation. Making the switch to automate invoice processing is crucial to overcoming the challenges above.

Benefits of automated invoice processing

  1. Reduces the rate of errors. 
  2. Increases approval rates and decreases processing times.
  3. Reduces the cost of labor. Employees can work on more crucial business-related tasks.
  4. Fosters better connections. Employees are relieved of tiresome chores, and vendors experience a more open procedure.
  5. Reduces the expense of handling invoices manually (postage and paper for instance).
  6. Securing early payment discounts is preferable to paying late fees.

How to automate invoice processing for your business?

There are advantages to automating your invoicing procedures, and it is abundantly evident that this is much better than manual processing. But how to automate invoice processing is the real issue.

You must first ask yourself a few questions to respond to that: – 

  • How many invoices and bills do you handle each month?
  • What is preventing you from processing invoices right now? 
  • Is the reason for the delayed business growth owing to repetitive manual chores, longer turnaround times, or erroneous data capture?

You would be better off trying to automate it internally on a very small scale if you process a few hundred monthly invoices. 

However, if you’re processing thousands of invoices and your accounts payable team spends hours upon hours merely collecting data from these invoices and feeding it into a system, you need an end-to-end automated invoice processing solution.

Takeaway

There are many ways to automate invoice processing systems for your company. You can go for an AI (Artificial Intelligence) and ML (Machine Learning) integrated automated invoice processing solution that will help reduce the turnaround time and data extraction errors. Instead of having several resources manage accounts payable, you could deploy a software for automated invoice processing and ensure that the finance and accounts team focus on value-added activities.

Here are some features you must look for in an automated invoice processing system.

  • Flexible solution that can be adjusted to any invoice template, format, layout, or style.
  • Should enable your accounts payable crew to concentrate on activities much more important than manual data entry, assisting your company’s expansion.
  • Provide line items and key-value pairs with unmatched 100% data extraction accuracy.
  • Can be integrated easily into the existing system.

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