Manual invoice processing can be time-consuming, error-prone and costly, slowing your operations. The good news? Automation is elevating how businesses manage their invoices. In this blog, let’s talk about how to automate invoice processing, allowing you to save time and focus on what really matters—growing your business.
We already know that a manual invoice processing workflow can range from days to several weeks. But automated invoice processing can reduce this time—often down to just a few hours.
The invoice processing workflow usually includes the following:
Once the finance team receives an invoice, they verify that the billed product or service was procured. They then compare the amount on the invoice with the amount on the original purchase order (PO) to ensure accuracy. If there are any discrepancies, the team must work with the vendor to resolve the issue before the invoice can proceed.
After the invoice details are confirmed to match, the invoice moves to the approval stage according to the company’s policies.
Once approved, the invoice is scheduled for payment based on the agreed payment terms.
Transitioning from manual to automated invoice processing significantly improves efficiency and productivity. While this shift involves several steps, we’d say the transition is well worth it.
To transition to invoice automation, start by assessing your current system to identify inefficiencies and bottlenecks. Next, select an automation solution that fits your business needs, ideally one that leverages technology for optimal accounts payable efficiency. Ensure your team receives proper training to utilise the new system. Implement the automation gradually to minimise disruptions, and once it's in place, continuously monitor performance and make adjustments as needed.
While investing in automated invoice processing software may seem like an upfront expense, it helps save on labour and overhead costs by reducing manual tasks. According to an article by Business Insider, automation can cut costs by 81% and improve efficiency by 73%.
Imagine your saved time being redirected towards more strategic activities, such as refining business operations, nurturing vendor relationships and developing new marketing ideas.
Manual processing is prone to mistakes such as misplaced decimal points and mistyped digits, leading not just to delayed payments but also to discrepancies in the business’s records.
Automation eliminates nearly all of these errors, ensuring that extracted data is accurate and ready for seamless integration into other systems.
For any business, easy access to data is crucial, especially when it comes to finances. Whether verifying an invoice number, checking the accuracy of an invoice amount or resolving a dispute, having reliable data at your fingertips is essential for smooth operations. Automation software can provide instant access to critical invoice information, allowing businesses to retrieve and manage their financial data.
Plus, it’s not just about easily accessing data—it’s also about exporting, extracting additional information and transferring it to other systems or platforms. This leads to a domino effect of the business being able to act quickly and make informed decisions when needed.
The automated invoicing workflow captures and records every step of the process with meticulous detail, creating a transparent and easily accessible audit trail.
This feature is invaluable during audits, as it ensures compliance with regulations and enables swift and accurate responses to inquiries.
Those who do manual invoicing know all too well that it involves painstakingly analysing each invoice, copying details and pasting them into accounting software—a task that can consume hours or even days.
Automation software is capable of processing hundreds of invoices daily, extracting and inputting data with high accuracy and speed. This automation accelerates the invoicing, allowing staff to focus on more strategic tasks and improving overall operational efficiency.
Most automation tools facilitate exporting extracted data into commonly used platforms like Google Sheets or Excel. This functionality provides real-time visibility into spending patterns, significantly enhancing financial oversight. For example, with data from your 200 invoices consolidated into a single view, you can gain a comprehensive breakdown of expenditures, categorising costs into supplies, services and utilities. You get to track vendor payments and identify spending trends.
By detecting peak spending periods, you can better prepare for increased expenses and plan for seasonal fluctuations. Overall, having this detailed and organised data enables more effective resource allocation and reduces unnecessary costs as well.
Invoices consist of sensitive information. No matter the size of your business, you need robust measures to protect not only your data but also the confidential details about contractors, employee wages and other financial aspects you wouldn't want to be exposed to competitors.
Automated invoice processing tools often come with built-in security features that safeguard data from breaches and unauthorised access, ensuring that your financial records remain secure.
Manual invoice processing can be an error-prone and costly endeavour, often resulting in delayed payments and operational inefficiencies. Automating this process, however, transforms the way businesses handle their invoices by cutting down processing times.
Accounts payable software not only saves time and reduces manual tasks but also provides a detailed audit trail and secure handling of sensitive information. This holistic approach not only helps in maintaining financial health but also in focusing on strategic growth and operational excellence.