Managing invoices from hundreds or even thousands of suppliers is a major challenge. With the diversity of formats, it is time-consuming and drains resources. In this blog, we discuss how we can automate invoice processing and how it can improve efficiency.
Accounts payable is a key financial function for any business. Corporations can have thousands of suppliers; even for relatively smaller businesses, the number of suppliers could be in hundreds. All the invoices they receive from these suppliers come in multiple formats, layouts, and templates - some semi-structured, some unstructured. Therefore, firms expend time and resources to capture invoice information through manual data entry and verification of accounts payable.
Manual data entry is not feasible in the long run, definitely not on a large scale. Before we talk about how intelligent invoicing solves the problems associated with manual invoicing, let’s discuss the challenges in much detail.
So, let’s jump right into it:-
Large corporations get bills from various vendors via multiple means, including structured XML documents via Electronic Data Interchange (EDI), PDFs, and picture files via email, and less frequently as hard copy papers. Bringing all of these distinct sorts of invoices into the unified system requires a great deal of time and human labor. Error-prone data entry at the beginning of the invoice processing workflow can lead to mistakes such as paying the same invoice twice, paying the wrong amount, duplicating invoices, etc.
The accounts payable team must use "stare and compare" to execute two-way or three-way invoice data matching with a purchase order (PO), goods received note (GRN), and contracts data. Consider how much time and money your team wastes when the identical action is performed hundreds of times every day. In addition, even the most vigilant human eye cannot ensure correctness, since the team may overlook dates, values, or calculations, which can eventually slow down the entire department, result in overpayments, and expose the business to a range of problems.
The continuous invoice processing process is mostly manual, with expenditures such as manual hours, paper, and postage placing the true cost of manual invoice processing between $12 and $30 each invoice. In addition, there are other hidden expenses, such as missing early payment discounts, late fines, and accounting mistakes.
Let's have a look at automated invoice processing using intelligent document processing:-
Receive invoices through portal, email, or postal mail. This process is automated and requires no operator intervention.
Splitting and sorting engine. We may break huge papers into distinct invoices.
EXCEPTIONAL SERVICE: If multi-line booking is necessary for non-PO bills, we employ technologies based on deep learning. For certain circumstances, we have implemented solutions based on templates.
Identification of the document type:
Advanced workflow for invoice approval:
The posting of the bill:
Automated invoice processing has advanced well beyond simple Optical Character Recognition technology. There are already a variety of choices that automate the full purchase-to-payment process, from scanning to data extraction to invoice submission. Whether on paper or in an electronic format, the appropriate software can intelligently extract vital data, validate it according to a predefined set of criteria, and streamline the entire process.
Here are some of the advantages of choosing for an automated system for invoice processing:
Without an invoice processing automation solution, processing invoices, confirming the figures, and obtaining the necessary permissions might take up to two weeks. By establishing a simplified workflow for the procedure, an automated system can significantly shorten the duration.
Due to the data input and many communication channels between departments, manual operations are susceptible to mistakes. It is possible for lost invoices, miscalculations, and process mistakes to occur at any moment, especially when a high number of products are being processed. With an automated system, you can eliminate mistakes and improve precision.
In a manual procedure involving several bills from suppliers and vendors, there are going to be many hits and misses. Occasionally, vendor agreements include late fees and penalties, which may increase your expenses. A solution for automated invoice processing can help you avoid these fines and expedite the invoicing process.
Manual filing and sifting through mounds of paper make it hard to obtain a thorough perspective of the entire process. Lack of transparency can result in unresolved issues, such as inefficient operations, under-reported costs, and incomplete accruals. Automation increases visibility throughout the whole process chain, providing the essential data to solve issues as they emerge.
Your connections with external vendors and suppliers are vital to the success of your organization. Inaccurate invoicing or late payments frequently result in strained relationships, which can have a detrimental effect on your organization. A system that ensures on-time payments and eliminates the back-and-forth calls and bother typically experienced by suppliers can help establish strong relationships.
With the improved transparency provided by automation, your organization can readily monitor costs and determine where and when money is spent. The majority of invoice processing technologies are outfitted with significant reporting and analytics features that give a visual representation of the data in real-time, allowing you to make informed business decisions.
The tedious manual labor connected with invoice processing might leave your Accounts Payable department with little time for other tasks. By implementing an automated technology for invoice processing, you can expedite the process and free up your resources to focus on other critical activities.
Consider the amount of time you save while processing each invoice. And what about the decreased amount of resources you now use to do the task? In addition, you are no longer required to pay late fees or penalties. The cumulative impact of automating your department's invoice processing delivers a rapid return on investment and enormous savings over time.
Improve your enterprise's invoice processing by adapting the procedures to its individual requirements. For example, if you receive bills via numerous channels, such as email, postal mail, or fax, you may design the tool to collect data from all of these sources. Similarly, if you have a multi-step approval procedure, you can build the automated workflow to your specifications. This provides you the flexibility and control to scale as needed.
Despite the numerous benefits associated with automating processes, a number of firms continue to rely on manual procedures. Change, however important, may be challenging for many people; thus, embracing automation early on can provide you a competitive advantage in terms of, among other things, time savings and mistake reduction.
Talk to us today if you’re on your way to automate invoice processing. Schedule a free demo to figure out how Docsumo can help your accounts payable workflow end-to-end.
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