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Docsumo Is Here To Help Enterprises Get 10x Efficient At Document Understanding
Discover how automated invoice processing can revolutionize your accounts payable. Learn about the benefits, tools, and best practices to streamline your workflow, reduce errors, and improve efficiency.
Manually keying invoices into ERP/accounting software is time-consuming for 68% of respondents, while less than 32% enjoy the benefits of automation. Imagine the time and money saved if this process could be automated! Every minute you spend keying in an invoice is a minute you could’ve used to grow your business or incorporate a new growth strategy.
That’s where automated invoice processing comes in. It transforms the tedious task into a seamless, efficient process. This quick guide on automated invoice management will walk you through everything you need to know to get started.
Automated Invoice Processing is a system that helps streamline the accounts payable processes by automatically processing the invoices. Simultaneously, it also updates the information in your Enterprise Resource Planning (ERP) system to ensure that all the records are digitally maintained.
It aims to drastically reduce the time taken for the manual processing of the invoices and also helps reduce the margin of error that human tasks pose.
Traditionally, once the payment is made, the invoices are stored in files or folders which are not traceable and are very hard to retrieve if necessary. However, automated invoice processing solutions use an Electronic Document Management System (EDMS) to store the data in a designated centralized digital database in a systematic manner.
This comes in handy when students are buying courses like OSHA 10-hour construction online, as it ensures seamless access to their payment records and invoices.
Once the invoices are tallied, the payment details are updated within the system and set for approval. When approved; the payment is made to the supplier. The levels of approval required before the payment is made vary depending on the organizational structure.
Automated invoice processing is built on the above-discussed workflow, but it successfully eliminates the repetitive manual tasks along with errors and delays caused by it. This is how automated invoice processing workflow looks like:
If you’re thinking about automating your invoice processing, first think about what you’re looking to achieve by doing so. Do you want to increase the speed of the process or reduce human error? Perhaps you want automatic invoice processing to free up your team’s capacity to focus on more interesting work. Clarity about your aims will help you make better choices when you progress.
To get started with automated invoice processing, you must equip yourself with the right tools and resources. First, you’ll require robust invoice automation software for data extraction and workflow automation. Additionally, it can integrate seamlessly with your existing accounting systems.
Cloud storage solutions are also essential for securely managing and accessing digital invoices. Training materials, such as user manuals and tutorials, are also important to ensure your team can quickly adapt to the new system.
Finally, having access to technical support is crucial for addressing any issues that arise during or after implementation.
Before automating, you must thoroughly evaluate your current invoice processing system. Start by mapping out every step in your existing workflow, from when an invoice is received to when it’s paid. Identify any pain points, such as delays or frequent errors, and assess the volume of invoices you handle regularly.
Understanding these details will help you pinpoint where automation can deliver the most significant improvements. Reviewing your approval workflows and compliance requirements will ensure that your chosen automation solution can fully support your business needs.
Using AI and machine learning in automated invoice processing can boost efficiency. AI tools can extract and categorize data from invoices. They reduce manual data entry and errors. Machine learning can learn from your approval processes.
It can then make smart decisions, like auto-approving invoices based on set criteria. AI can also improve fraud detection, find unusual patterns, and predict cash flow needs using advanced analytics. As these technologies evolve, they improve. They make your invoice processing smarter and more adaptive over time.
Once your system is up and running, you’ll have access to a wealth of data that can provide valuable business insights. By analyzing this data, you can spot trends, identify areas for cost savings, and even predict cash flow more accurately.
For example, certain vendors consistently deliver late or some departments are more prone to invoice errors. This insight can help you make better business decisions and fine-tune your processes for greater efficiency.
Let’s break down how you can implement invoice process automation step by step.
The first and arguably the most crucial step is to figure out what software best matches your business, though there are many good options.
What do you value most? Strong OCR capabilities if your business still uses paper invoices? Strong reporting features to track spending? What business size are you running, and how many invoices are being processed? Do you require cloud-based software, and what level of user-friendliness is needed?
Find out which specific features both you and your staff need. What are your business requirements? To save time, read forums and reviews and try demo software where possible before you make a decision.
After choosing your software, you need to determine your workflow, or how your software should work with you. Your invoices will be processed in different ways: by email, uploaded to a portal, through a chatbot, and so forth.
Should they be auto‑approved, bypass accounting, and go through a specialist accounting department, or perhaps require manual review by Finance?
Then, if there is a problem, what action should be taken? Consider your current process, how it has evolved, and how to simplify or add checks and balances where necessary.
Once your workflow is in place, the next step is integrating the new software with your accounting software. This is key to ensuring that all data goes from one system to another, eliminating opportunities for error, keeping your financial information at your fingertips and optimizing invoice workflow automation.
Depending on the software you select, this might require you to link or configure APIs, sync data fields, or customize the sync to suit your preferences. You’ll want to test this integration thoroughly.
Once your invoice processing is automated, you’ll have access to a wealth of data that can provide valuable business insights. Analyzing this data can reveal bottlenecks in your process, which you can then adjust to improve efficiency.
Monitoring payment patterns helps you understand your cash flow. It's vital for financial planning.
You can also assess vendors by their payment timeliness and adherence to terms, which can help in negotiations. A cost analysis of manual vs automated processing will show your ROI. The data will also simplify compliance audits, ensuring you meet regulations.
When selecting an automated invoice processing solution, choosing one that not only automates tasks but also aligns perfectly with your business needs is crucial. Here are some of the points that you need to look for in the automated invoice processing solutions:
A major advance in automated invoice processing is pre-trained APIs. APIs, like Docsumo's, can extract key-value pairs and line items from invoices. They work out of the box, needing little to no training. This AI and Machine Learning-powered feature lets the system adapt to different invoice formats.
It ensures accurate data extraction. This means that even if your vendors use different invoice templates, the API can still capture the necessary data. It won't need constant manual adjustments, making the process seamless and efficient.
Every business has unique processes and needs, so it's vital to choose a highly customizable automated invoice processing solution. Docsumo's pre-trained API can be customized for your business with minimal effort. You need only 50 invoices to start.
This flexibility lets you adapt the solution to your workflows. It works for complex approvals and specific data fields. Customizability also means you can adjust the system as your business grows, making it a future-proof investment.
An automated invoice processing system should have a custom approval workflow. It must handle the complexities of your approval process.
With Docsumo, you can set up workflows. They will auto-route invoices to the right approvers based on predefined criteria. This reduces the manual effort needed to move invoices through the approval chain.
Auto data validation checks each invoice against specific rules before it reaches the approver. This minimizes errors and ensures compliance. Also, the auto-assign notifications feature prevents delays. It alerts the right people at the right time, ensuring quick approval and processing of invoices without bottlenecks.
Integrating with your systems is critical for any automated invoice processing solution. Seamless connections with third-party tools, like your ERP or accounting software, ensure smooth data flow between systems.
Docsumo's integration means that once an invoice is processed, the relevant data is synced with your platforms. This eliminates manual data entry and reduces errors, boosting efficiency.
It also keeps your financial data up-to-date and accessible, enabling more accurate financial reporting and analysis.
Access to real-time data is essential for making informed decisions that impact your business’s bottom line. An effective automated invoice processing solution should have strong analytics and reporting.
They must provide real-time insights into your invoice processing performance. Docsumo's dashboard shows key metrics and analytics.
You can track processing speed, approval times, and error rates. These insights let you identify trends and inefficiencies. You can then make data-driven decisions to improve your invoice-processing operations.
Real-time visibility into your processes lets you optimize your workflows. This improves financial management and business performance.
The transition from manual entry towards automated invoice processing also brings with it several rewards, such as:
The goal of accounts payable automation is to streamline invoice processing, and it does so by putting all the features at your very fingertips through a unified platform. Platform like Docsmo enables users to easily access and control all the requisite features at a touch of a button, such as:–
According to a survey conducted by Coupa, over 51% of the respondents accepted that manual data entry is inefficient and time consuming, and they are actively looking for ways to make it more accurate and efficient.
Automated data entry does just that by drastically reducing the time required to process the invoices by 10 times of what it would take to process manually.
Manual processing of invoices is prone to errors and mistakes owing to the reasons like fatigue and lack of concentration. According to Level Research as it highlights in its 2020 Payables Insight Report, over 23% of the companies surveyed regard data discrepancies as one of the major pain points of Invoice Processing.
Similarly, the number stands at 16% for the companies finding data fraud as a major pain point and it is important to understand that the lack of active supervision gives way to such risks of data fraud.
This is where automated invoice processing comes into play by ensuring that the data entered is accurate and free from any possible errors. Further, the automated solution matches the extracted data from the supplier’s invoice with the company records to reduce chances of fraud.
This goes a long way in making the processes more efficient as previously, the same would have to be manually verified by an employee or a clerk and could take hours.
Traditionally, once the payment is made, the invoices are stored in files or folders which are not traceable and are very hard to retrieve if necessary. However, automated invoice processing solutions use an Electronic Document Management System (EDMS) to store the data in a designated centralized digital database in a systematic manner.
Such storage creates an audit trail and makes the invoices easily retrievable in case of necessity. Further, it makes it very easy to track all the documents and reduce chances of any misplaced or missing invoices.
Owing to the vast and unsystematic arrangement of manual invoice records, it is a very complicated task to monitor the same. However, in the case of automated invoice processing, the processed invoices are transparently stored in a centralized and easily retrievable database.
This helps ensure that the expenses can be monitored in real time and any discrepancy can be easily reported. The automation software also provides increased customization options to ensure that the entire operation can be streamlined to suit your personal business requirements by arranging the workflows accordingly.
Additionally, it offers easy integration of your accounting processes with CRM tools and ServiceNow Software Development to ensure that all the accounting functions and processes are carried out synchronously and without any conflicts with each other.
It also allows software development companies to add custom logo designs, texts, stamps and other details automatically to save time and resources. Such software also facilitates stronger compliance to custom regulations and policies to ensure that the outcomes are in accordance with the standards of the company.
By enabling automated workflows, the entire process can be made efficient, making it easier for employers to achieve deadlines. Considering the fact that most suppliers provide early payment discounts, the same can be availed by ensuring that the payments are not delayed.
Further, timely payments also help keep the suppliers happy and Accounts Payable Automation software usually also has a platform to help enable suppliers get real time updates about the status of their invoices.
This helps ensure that there are no disputes between the company and its suppliers and their relationship is maintained in good spirits.
Over 37% of the companies find manual routing as one of their biggest pain points during the course of invoice processing. Once the invoice is processed, it is manually routed to a number of concerned parties for approval depending on the amount and nature of the payment.
However, owing to a lack of designated route of approval can lead to further delays and maybe even lost invoices in certain cases.
Through the automated invoice processing software, users can easily set up the designated workflow to ensure that the invoice reaches the right approvers. Users are notified via custom notifications to remind the approvers of the pending invoice approvals ensuring timely approval of the same.
Automated invoice processing systems can revolutionize your operations, but they also have challenges. Understanding and fixing these common issues will help ensure a smooth transition and success with your automated system.
The new automated invoice system often fails to connect with existing accounting software, ERP systems, or third-party tools. This causes integration issues. This can cause data sync issues, leading to system errors or incomplete transfers.
Automated systems rely heavily on data capture technologies like OCR (Optical Character Recognition). If the Optical Character Recognition technology is not sufficiently advanced, or if the invoices are poorly formatted or scanned, it can lead to incorrect data extraction and errors in the processed information.
Employees may resist adopting new automated processes due to discomfort with new technology, fear of job displacement, or dissatisfaction with changes to their workflow. This resistance can hinder the successful implementation and utilization of the automated system.
Managing change effectively is critical to successfully adopting an automated invoice processing system. Change management involves preparing, supporting, and helping individuals and teams navigate the transition smoothly. Here’s how to manage the change:
Docsumo offers cutting-edge solutions to streamline invoice processing and transform financial operations. Automated invoice processing can transform your business's financial transactions. It will make them more efficient, accurate, and insightful. However, selecting the right solution is crucial to reap these benefits of automated invoice processing.
Some key features are a pre-trained invoice processing API, customizability, and strong approval workflows. They ensure the system meets your needs and integrates with your processes. Also, it must have seamless integration with existing tools and real-time analytics.
Docsumo has a pre-trained invoice processing API. It minimizes setup time and adapts to various invoice formats. Its customizability ensures the system fits your business needs. Its advanced workflows streamline approvals and reduce delays. Your ERP and other tools must integrate seamlessly. This will ensure data consistency and efficiency.
Automated systems can process various invoices, including PDF, XML, and scanned paper invoices. They can handle both structured and unstructured invoices. For specific formats or unusual invoice layouts, further customization may be needed.
Automated invoice processing solutions typically use encryption to protect data. They comply with industry standards and regulations like GDPR and HIPAA. Regular security updates and access controls are implemented to safeguard sensitive information.
Yes, many systems support multiple currencies and languages. They can process invoices from various countries, considering different tax regulations and formats. Additional configurations may be needed to handle specific local requirements.
Support typically includes customer service via phone, email, or chat. Many providers offer online resources such as tutorials, FAQs, and user guides. Dedicated account managers or technical support teams may be available for ongoing assistance.