Invoicing is critical to any business operation. But all of the manual work that goes into it can create a headache for your accounting team.
Enter automation, a process that’s helping countless businesses in various industries and sectors. Whether it’s digitizing paper documents or verifying invoices with prior documents, automating financial tasks can significantly help to streamline and optimize different processes.
Given that many companies are undergoing a transformation process, automation should be a key part of your strategy if you want to adapt to the demands of the modern business world. Just as enterprise transformation helps your company become more effective and productive – crucial in today’s competitive climate – automating your invoicing process will do the same.
Not sure how to get started? We’re here to help. In this article, you’ll find out what automated invoice processing entails, the tasks it relates to, and the key benefits for your team and business. Let’s dive in!
Invoices are a hugely important part of a company’s financial operations and help ensure an accurate billing and payment process.
Traditionally, invoice processing has been done manually. Someone on the accounting team will receive an invoice (physical or digital) and match it to the right purchasing order (PO) before sending the invoice to the next touchpoint to be approved.
Depending on the invoice amount, this may require several rounds of approval. Once approval is granted, the invoice is registered in the books for payment.
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Automated invoice processing entails using software to reduce or eliminate several of the manual tasks involved in this process.
With so much competition today, it’s always worth stepping back and considering what areas you need to improve upon in your business.
For instance, your company might have a stellar content marketing strategy, complete with informative blog posts and downloadable guides. But if you serve international clients and are directing everyone to the same website, it could hamper efforts to target different demographics.
As a result, you might choose to buy and register different domain names using a provider like Only Domains. This helps you target the right audience in the right location, perhaps using .fr, .ca, or .sg to reach clients in France, Canada, and Singapore, respectively.
While this may not be a process you can automate, there are numerous ones you can. So analyzing which areas of your financial and invoicing systems can be streamlined will give you more time to focus on these other tasks.
Digitization is taking over today – and automation has become a crucial part of the business transformation process.
If you’re skeptical of this process, remember that this isn’t a trend. Technology and software has been used in the industry for a while, as seen in the rise of paperless payments and the fintech solutions.
The idea is often to make the payment experience easier for consumers. But it also helps to improve efficiency and productivity among accounting teams. Those same teams can gain equal benefits with automated invoice processing. The technology streamlines the workflow of invoice processing, automating steps such as:
- Data extraction
- Data entry
- Invoice validation
- Processing system that tracks payments
- Invoice reviews and approval (according to preset rules)
- Automatically paying supplier invoices
By using advanced technologies and algorithms, automated invoice processing allows for quicker and more accurate verification and a speedier payment process.
That said, not all automated invoice processing systems are created equal. Depending on your business needs, there are various features that you should look out for when choosing the right invoice processing system.
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One of the main features you should look out for when considering which automated invoice processing system to use is artificial intelligence. AI is being increasingly used by businesses across various sectors and departments.
To take one example, many customer service teams use AI for call center solutions that automate menial tasks and allow customer service reps to focus on customers. In the same vein, AI helps automate menial tasks in the invoicing process, helping you increase productivity and efficiency.
Let’s explore other software features to look out for that help with automating invoices.
This supports multiple vendors for vendors to send invoice data to, including PDF, electronic invoices, scanned invoices, paper copies, and XML formats.
Easy-to-use software that requires little to no training is a must, as it greatly enhances the accessibility of invoice software.
Having software that can track and manage key performance indicators and SLAs is highly beneficial. These insights allow you to track money flow and invoice status.
A software that integrates with other accounting systems will benefit your team by enhancing data flow.
All businesses are different, with their own invoice routing processes. Customizable software lets you create the set-up that suits you best.
Whether it’s B2B payments or accounts payable, there are numerous benefits to automation. But let’s look at how it can improve your invoicing in particular.
1. Reduced manual entry
Automated invoice processing almost entirely eliminates the need for manual data entry. The software will scan invoices and data efficiently and accurately. When compared to the inevitable errors that can occur with manual entries, this improves the accuracy of data input and also saves time for your team.
When everything is done manually, accountants and managers can often rush the invoice review and approval process to save time.
However, with automation, your teams will have access to all the information they need to authorize payments quickly and accurately. This greatly increases the reliability of the whole process.
3. Easy access to information
Automation digitizes and makes available all the necessary data your accounts team needs. By improving information flow and access to information, your team will be well equipped to handle discrepancies or issues as and when they arise.
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4. Automated workflow
An automated workflow allows you to introduce rule-driven processes that send invoices through the proper steps.
For example, you may introduce a rule that establishes which invoices get sent to which person. Small costs, such as office supplies, will get sent to the appropriate department head. Meanwhile, the system will send high-cost invoices relating to, say, new office equipment to the CFO.
5. Early payment discounts
Some vendors offer so-called “early bird” discounts to customers who make payments ahead of time. Typically, this means paying the invoice within 10 days of its issuing.
Automated invoice processing strengthens and optimizes your invoice process practices, which makes it easier to get ahead of the game and pay invoices early. Enjoy that discount!
6. Reduced audit preparation
Finance and accounting departments must comply with both their company’s policies and industry regulations.
Automated invoice processing systems ensure that data and invoices are captured and stored in a system that is both secure and easy to access. Moreover, they ensure this data is compliant with accounting policies and regulations. This level of compliance and ease of access greatly reduces the amount of time and effort required when preparing for an audit.
7. Cost savings
Those early-bird discounts aren’t the only ways that automated invoice processing can save you a buck or two!
For example, digital invoices can introduce sizable cost savings by freeing up your accounts team from menial jobs. This allows them to focus on more productive tasks.
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8. Reduced business risk
A good automated invoice processing system will provide custom access controls and digital data security. Not only does this help with audit compliance, it also greatly reduces the risk of documents going missing or being misplaced.
9. Improved vendor relationship
Ironing out your invoicing procedures makes the process simpler for vendors. This can be instrumental in strengthening vendor relationships and enhancing trust with your business.
For example, important information is never far from hand if your vendor needs to check invoice details. Some software includes a vendor self-service portal that allows them to quickly upload invoices for a speedy approval that removes the fuss of manual processes. Even better, payment alerts and notifications mean that you won’t ever miss payment deadlines.
Automation is becoming an increasingly important aspect of business transformation – and financial teams could stand to reap some of the biggest benefits.
Automating the invoice process can significantly benefit your accounts team by helping them to streamline and digitize parts of the invoicing workflow. Freed up from doing menial, manual tasks, they can then focus on more productive tasks, such as creating budgets or exploring cost-effective payment processing solutions.
There are strong cost-saving benefits associated with automated invoice processing, too. You may enjoy early-bird discounts for processing invoices early. But just the fact that your team is more productive can pay off in more ways than one.
So whether it’s part of your digital transformation strategy or you want to revitalize your invoicing process, leverage the power of automation and get ahead of the game.