Most organizations have huge numbers of invoices that are being sent to their accounts payable teams almost on a weekly or a monthly basis. Some of these invoices are in different formats, depending on how vendors create them. And the old-fashioned form of manual data entry can lead to errors, misplaced documents, ineffective approval of workflow, and non-compliance. Therefore, automated invoice processing has become the best way for companies to reduce processing costs and this also leads to improving relationships with vendors and suppliers.
What is Automated Invoice Processing?
If you are wondering how to automate invoice processing, then this question can be answered by getting an idea of how automation benefits account payable as a function.
This is a solution of structuring data among employees, suppliers, and third parties that assist the company with reports and analytics for processing invoices in an automated manner. It is a cloud-based system where invoice data is managed from arrival to payment.
How Does Automated Invoicing work?
Automated invoicing helps reduce overall processing time and costs and improves productivity. Most companies can look at AP invoice processing with these steps –
1. Create an Invoice Template
AP accounts payable software can be used to create a template for suppliers and vendors to follow based on tasks or rates. This would be kept in compliance and can be referred to if invoices do not match the format.
2. Decide How an Invoice will be Approved
There needs to be an authority – perhaps within your accounts payable team – that can be the approving authority for invoices as they come in. Also, the terms and conditions must be decided that would make the invoice ‘Okay’ or not ‘okay’.
3. Communicate This to Vendors
Once all these essentials have been automated, make your vendors and suppliers aware of the formats and the automated invoicing process can begin.
Benefits of Automated Invoice Processing
- Invoice processing time may be reduced to as low as two days and is, therefore, a major boost for productivity.
- With automation, the invoice is visible to the AP team from the point of receipt to entry into the company’s ERP system.
- There may be chances that incorrect invoices have been entered by vendors or suppliers. Correction of these invoices can be done faster using automated AP software.
- The Accounts payable team has access to the audit history of each invoice so any changes can be addressed easily.
- More data can be extracted and this can be done in a faster way
Automated Invoice Processing Workflow
- Capture Data of Invoices – Data from the invoice image can be captured using OCR or Optical Character Recognition Software.
- Workflow is Conducted – Purchase Order Data or PO Data has to match the receipt for the PO invoice. But some vendors may have non-PO invoices. These non-PO invoices need to be approved and this can be done through automation of AP workflow.
- Process the Invoice – Companies can opt for the Easy Access AP Solution to get the benefit of AP automation for their invoice processing systems. With this, up to 3000 plus invoices, a month can be processed with minimal work to be put in by one AP staff.
- Review – Automated Invoice Processing Workflow would have certain validation rules. If the vendor’s invoices match those rules, then the invoice is ‘verified’. If it doesn’t – it may be reviewed later or manually reviewed and moved to ‘verified’.
- Connect to the ERP – Here, ‘PO invoice’ data or the Non-PO Invoice data that has been approved needs to be matched. This final data is then entered into the ERP system.
Therefore, it is important to build an automation process workflow brought out by Easy Access’s unique solution for AP Automation. Easy Access helps configure process rules, select the right components for automation and integrate the software with most ERPs.