If you run a business, chances are you deal with a lot of invoices. Perhaps you have an Accounts Payable (AP) or Accounts Receivable (AR) department that is responsible for processing invoices. Or maybe you handle invoicing yourself.
In either case, you know that processing invoices can be a time-consuming and tedious task. And if you make a mistake, it can cost your business money. That’s where automation comes in. Automating your invoice processing can save you time and help you avoid mistakes.
An automated invoice processing system is software that automates the tasks associated with creating, sending, and managing invoices and saves you time by automating repetitive tasks.
But what exactly is invoice automation, and how can it help you with invoice processing? Read on to explore this and much more in our ultimate guide to invoice automation. Let’s get started!
What Is an Invoice Processing System?
Invoicing includes several steps:-
- Data capture from invoices
- Purchase order matching
- Sending invoices for approval
- Approve invoices for payments
- Process payments and register details for records
Manual invoice processing systems require employees to manually input data from each invoice into the system, which is a time-consuming process that is susceptible to human error.
On the other hand, automated invoice processing systems automate the tasks associated with creating, sending, and managing invoices. An invoice processing system helps businesses capture data from invoices automatically. The system can help automate many of the other tasks associated with invoicing, from creating invoices to issuing payments.
There are many different invoice processing systems on the market – some of them are template based semi-automated solutions, whereas some of them are smart AI-based end-to-end automated solutions. The choice of the solution depends on your use-case and the goal you’re trying to achieve.
There are many different features that you get when you automate invoice processing system, but the most important thing is that it saves you time by automating repetitive tasks. Employing automated software can free up your employees to focus on more important tasks and improve your bottom line. An automated invoice processing solution helps in generating invoices from purchase orders and tracking payments and issuing refunds.
How Automation Helps With Your Invoice Processing
Manual invoice management is a tedious and time-consuming task and a business risk, and it can increase the chances of invoice fraud and errors with financial statements.
Automation can help you avoid these issues and create additional benefits for your business. Here’s how it helps make your business more efficient:-
One of the biggest advantages of automation is that it can help you avoid mistakes. For example, automated invoice processing software can automatically generate invoices based on data from your purchase orders or other data sources, which eliminates the need for manual data entry.
Automation can also help speed up your invoice processing. In addition, the software can automate repetitive tasks, such as generating invoices or issuing refunds, freeing up time which can be used to improve other areas of your business.
Automation can help you keep your invoices organized. The invoice automation software can track all your invoices in one place, which can help you avoid missed payments and late fees. As a result, it is easier for you to keep track of your customers.
Automation can save you money by eliminating the need for manual data entry and other manual tasks. Consequently, your bookkeeping becomes more cost-effective and streamlined.
Less room for human error
As your business grows, it is important to avoid unnecessary manual tasks and complexity. Automation can help you avoid mistakes like forgotten payments which could lead to late fees.
How You Automate Invoice Processing
If you’re interested in automating your invoice processing, there are a few things you need to do.
With many different software options available, it’s important to find software that suits your needs and use case. Docsumo can assist in the setup with automated invoice processing. It uses AI software with Intelligent OCR technology to convert your invoices into actionable data.
After converting the data, you need to integrate your invoice automation software with your accounting software, which allows you to automatically generate invoices and track payments.
As a final step, you need to set up automatic payments.
10 Steps to Automate Your Invoice Processing
- Establish guidelines: Decide what types of invoices can be processed automatically. Having guidelines for what types of invoices can be added to the software guarantees that only specific invoices are processed, which makes the process more accurate.
- Determine how invoices are received: By understanding the channels you receive your invoices through, you can streamline the automation so that all invoices are received similarly.
- Set up a system to automatically capture invoice data: A automated invoice processing system eliminates the need for manual data entry, which can be error-prone.
- Validate the accuracy of the data captured: Data validation ensures that the information being processed is correct.
- Route invoices for approval: An approval queue helps ensure that invoices are approved promptly.
- Generate payments electronically: It saves time and money!
- Reconcile payments automatically: Reconciling payments helps to ensure that all invoices are paid in full and on time.
- Provide visibility into invoices’ status: This helps track which invoices have been processed and which have not.
- Allow for exceptions when invoices can’t be processed automatically: By having an exception process, you ensure that problematic invoices are still processed on time.
- Improve the system continuously: Once set in place, ensure the system is always up-to-date and efficient.
Invoice processing can be a time-consuming and tedious task, but it is a necessary part of running a business. Automating your invoice processing can save you time and help you avoid mistakes.
There are many different features that an automated invoice processing system can offer, but the most important thing is that it saves you time by automating repetitive tasks. It can allow your employees to focus on more critical tasks and improve your bottom line.