Managing accounts payable (AP) is one of the most challenging areas for businesses. It is because most accounting departments rely on manual processing for invoices.
But as organizations realized how paper-and-people-based manual processes are time-consuming and error-prone, they started looking for alternative ways to enhance efficiency and reduce costs.
One of the technologies that are growing in popularity is automate invoice processing.
It is the process of automatically extracting information from invoices as they enter your system and pushing it into your ERP such that making a payment only requires a few clicks.
Benefits of implementing automated invoice processing software
- Shorter document turnover time
Manual invoice processing takes hours, if not days, to examine each invoice, copy relevant information, and paste it into the accounting program.
Automate invoice processing permanently reduces the time required for data extraction because this procedure is done digitally. Additionally, machine learning is the foundation of the tools that use intelligent document processing.
- Fine-grained security for sensitive financial documents
In several ways, invoices show how your firm is doing right now. It’s unlikely that you’d want to provide your competition, for example, access to information about your contractors or the pay paid to employees under B2B contracts.
Because of this, automating the accounts payables procedure also improves the security of your financial records.
- Document processing time decreases
You may cut processing time by up to 70% using invoice automation. How?
Automate invoice processing platform’s primary objective is to reduce the time-consuming work needed to finish the procure-to-pay cycle. Employees can release payments on schedule and approve invoices much more quickly. Additionally, utilizing AI-based platforms can improve the approval ladder.
You’ll only need one person to validate and accept the extracted data, as opposed to several people involved in the approval process.
- Gain insights from structured data
By gaining valuable insights into your cash flows, your business teams are better equipped to predict revenue streams, manage future expenses, and develop superior growth strategies.
Additionally, automating invoice processing allows your employees to access data about your clients, including which client segments can be identified based on how much they spend. With the aid of these granular insights, you might be able to spot the early indications of a market shift that might be brought on by new competitors or a less expensive substitute for your offerings.
- Fewer invoice processing errors
It is a no-brainer that people can make mistakes. Time constraints and challenging work environments are just a few factors that might affect an employee’s effectiveness.
In accounts payable, inevitable mistakes can be costly.
Reconciliation can take several days, and skipping over a specific invoice could lead to a contract breach—none of which you would desire for your business.
And while some businesses purposefully pay invoices later than planned to maintain their cash flow, that’s a tactic that usually backfires. Automate invoice processing aids in avoiding these errors and holdups. The majority of errors occur during human data entry.
Three strong use cases for automate invoice processing software
- Invoice approvals
With manual invoice processing, numerous teams must manage and juggle many email threads to follow up on unfinished approvals.
Organizations can avoid any form of human interaction by automating the entire invoice approval and PO matching process. The bills can be automatically forwarded to the correct individual, and automated bots can even send reminders about deadlines.
- Invoice data entry
The process of invoice data entry into the accounting system is one of the most challenging duties in the AP procedure. It not only takes a lot of time and money but also raises the possibility of mistakes. Organizations may ensure that there is no longer a time cost associated with precisely coding all invoice data into their accounting system by using automate invoice processing software.
- Payment execution
The invoice is sent to the person who processes it by carrying out the online bank payment when it has been authorized. The member of staff or employee in charge of this procedure must have full knowledge of all payment due dates, including any deadlines for early-pay discounts. With hundreds of invoices being handled weekly or monthly at many organizations, keeping track of these deadlines may be challenging.
Payment execution can be automated so that authorized payments are automatically scheduled and sent out on the specified day.
Conclusion
Processing invoices manually is time-consuming, prone to mistakes, and can complicate your accounts payable procedure. Automate invoice processing software can help you organize and optimize the entire accounts payable process. Everything may be mechanical, helping to increase production and saving you and your suppliers time and money. This includes the initial receiving of invoices and the submission of client payments. If you’re looking to automate invoice processing for your business, check out automate invoice processing systems available in the market and choose the best one that fits your requirements.