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The Ultimate Guide To Automated Invoice Processing

Automated invoice processing simplifies the Accounts Payable (AP) process by streamlining the receipt, capture, approval and storage of invoices by moving them digitally through the business. Manual invoicing is error prone and out dated. Automation should no longer be something just your competitors are doing.

What You’ll Learn

After reading this piece you’ll understand what automated invoice processing is and how it differs from manual, paper-based processes. You’ll learn how it can be used in your organisation to drive change, reduce costs and make a tangible difference to the working lives of your staff.

Organisations of any size and in any industry can benefit from AP automation services and solve some of the biggest challenges facing finance departments today.

Don't have time to read this now?  Download the entire guide for free.

The Ultimate Guide To Automated Invoice Processing

What is Automated Invoice Processing?

Automated invoice processing is a way of simplifying the accounting processes, moving away from paper based, error prone manual data entry to a more streamlined digital approach. Automation software should be able to extract information from an invoice and populate it to an accounts payable or ERP system.63% paper

Traditional invoice processing where an invoice is received, manually matched against a purchase order, entered into a finance system, coded and then paid is time consuming – and that’s if there are no issues along the way.

If no purchase order exists or the amounts don’t match, it takes employees time to investigate and spend time away from their desks. These issues can be spotted quicker with invoice processing software.

Automating the invoice process will enable organisations to capture, sort, index and store invoices received in any format such as scanned paper, email and mobile capture. Structuring the process in this way from the start means only accurate data can enter the finance system, reducing errors and wasted time.

To understand more, read our blog: Automated Invoice Processing: What is it and why do I need it?

Automated Invoice Processing: How it Works

Automated invoice processing works by capturing incoming invoices in a document management solution and then pushing them into a finance or ERP package.

An invoice enters the system, either through scanned paper, automatically via an email or is dragged and dropped in from the desktop. The important information is then captured, extracted, indexed and stored.

Machine learning is a form of AI which which remembers where to find the most valuable information on a document as it’s processed. As more and more invoices are put through the system it learns further and any manual corrections that have to be made are learnt too, continually increasing in speed and accuracy.

This indexed data sits at the heart of the solution, enabling users to easily find the digital document they’re looking for. Having been securely stored under a certain criteria, such as customer name or invoice number, searches are completed in a matter of clicks. Information can be accessed by an authorised user from any device and anywhere.document sharing

The digital invoice can now move through the accounts payable process, kick starting a pre-configured workflow that follows your business rules.

The captured invoice information is automatically pushed into a finance or ERP system, eliminating double entries and with no manual intervention.

Invoices can be automatically approved by the system based on value or PO matches, or routed to a member of staff for approval. Invoice processing software can dramatically reduce errors and quickly highlight exceptions; streamlining AP processes and creating greater efficiency for finance departments.

AI: Machine Learning In Finance

Machine learning in finance removes time consuming manual tasks such as repetitive data entry, and replaces them with automated processes.

The software extracts data from invoices or purchase orders and automatically saves it into a document management system.  It is accurate from the beginning and instantly available to all authorised users.

Machine learning in finance improves invoice processing, approval workflows, supplier management, payment optimisation, GL coding, compliance and many more.  

Read our blog - 10 Reasons Businesses Are Implementing Machine Learning In Finance for more detailed information. 

Watch the video below to understand more!

 

Digital invoice automation provides transparency and visibility of the process at any given point. Managers can see from the system what stage an invoice is at, no chasing individuals for answers or lengthy searches in network folders trying to find the documents they need.

Digitally routed invoices can reach the approver quicker meaning they are paid quicker. This can avoid late payment fees and businesses can benefit from early payment discounts. It maintains relationships with suppliers and can be a good bargaining tool to negotiate discounts.

Automated invoice processing solves many of the problems organisations face with their accounts payable process, reducing errors, costs and stress felt by staff.

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The Challenges Presented by Invoice Processing

Invoices are of course, a vital part of any business. It’s not only how a business gets paid, but provides a record of a sale and a verification in writing of a payment agreement between you and a client.

Invoices contain the information a business needs to file taxes each year, show financial history and provide a form of legal protection as they detail the service given to a client and when. It is therefore important to address any challenges presented by invoice processing to mitigate any risk they present.

There are many common challenges in invoice processing whether that’s relying on paper and emails, or where traditional processes can no longer keep up for organisations that have experienced growth.

Read can read more in our blog about 11 Challenges in Invoice Processing and how to Resolve them with Automation.

Struggling To Find Documents

Spending too long on simply finding the invoice you need is a waste of precious time. If employees have to look across multiple sources, click through large folder structures on the server or search on desks, then something needs to be done.

Huge productivity benefits can be gained by providing all offices with access to a centralised, digital document pool. Documents should be saved in a way to make searches quick and simple. For example all quotes saved as ‘Quote’ and no other variation such as pricing, quotation, price etc.

Security

How secure are your invoices and the data they contain, who can access what? These are all questions organisations should have the answers to and the right document management software should ensure documentation is protected against misuse or loss.

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There should be a robust rights structure to control which documents users can view, retrieve, edit, export, modify and delete.

Encryption provides next-level security for cloud-based software, and all documents should be stored with AES, and all internet communication traffic should be sent through TLS, HTTPS and HSTS.

Information Trapped on Paper and Email

Invoices hidden on desks or sat in someone’s inbox cause some of the biggest headaches for invoice processing, and it definitely doesn’t work in today’s remote and hybrid working environment.

Not only does all this information have to be manually processed, but it opens the door to errors, lost information and reduces employee productivity.

The average employee spends 30-40% of their time looking through email, paper documents, shared hard disks and filing cabinets to find information they need to complete their tasks Source IDC

AP automation digitises processes such as supplier registrations, invoice approval, task management and payments. Organisations cannot benefit from optical character recognition, machine learning or robotic process improvement with information trapped on paper.

Businesses need to have a secure, organised and searchable invoice archive and trail for audits and budget planning.

One of the most stressful times for any accounting department is the wasted effort associated with responding to auditor document requests – pulling paper documents, copying them, and refiling the originals.

Our blog - What's The Deal With Paperless Invoice Processing - talks more about individual employee problems we hear regarding paper processes, and how a paperless solution will help.

Extracting Key Details from Invoices

Invoices contain a lot of information that may need to be processed in separate ways – spilt code billing, multiple cost centres or matching them to a PO. Data also needs to be accurately added into a finance system and organisations processing invoices manually may have problems with duplicate invoices, missing or incorrect information and slow processing times.

Late Payments

Inadequate invoice processing procedures can result in late invoice payments and penalty charges. If emails are deleted, misrouted, lost or simply inaccessible when employees are off sick or on holiday, the accounts payable processes can fall down.

Additionally if it's taking your organisation too long to process an invoice, either because of sheer volume, slow processes or too many manual keying errors, late payments are likely to happen.

With AP automation services, invoices that require approval because they either exceed a certain limit or cannot be matched, can be automatically routed to a specific user for immediate approval.

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Reasons To Implement Invoice Processing Software

Implementing invoice processing software has a number of benefits including reduced overheads, increased efficiency and tighter control over the entire accounts payable process

Invoice processing software brings advantages not only for your business but importantly your employees too. Time saved means staff can get on with strategic activities rather than mundane data entry. Added to this, the stress and anxiety of month end is dramatically reduced.

Data Capture and OCR For Invoices

Invoice automation software from DocuWare provides OCR for invoices, which is a simple way to automatically capture data from incoming invoices.  Intelligent Indexing converts the data on an invoice into searchable text which can be automatically sent to your ERP or Finance software.

Documents are sent via a workflow for transparent and faster approvals based on individual business rules, and securely stored in a digital archive.

Accurate data capture is essential for all businesses as it is this data that flows through all business processes.  An error in data entering business applications can cause huge problems down the line.

DocTech solutions help businesses with data capture and you can read more in our blog - The 5 Benefits Of Accurate Data Services.

Intelligent Indexing-DocuWare

Third Party Integration

Integration with a range of systems including Sage, Open Accounts, SysPro, SAP, MS Dynamics Nav and many more makes standalone systems a thing of the past.

Software that doesn’t work together is complicated for staff and makes it hard to access important information. Integrated software streamlines accounts payable and invoice processing. With an integrated smart connect button, staff never need to leave their familiar system to access documents in DocuWare.

Automated GL Coding

The General Ledger is a record of all of a company's financial transactions.  GL coding involves assigning specific codes to various transactions to categorise them properly for accounting and reporting purposes.

With DocuWare, GL coding can be automated, saving time, reducing errors and improving efficiency.

DocuWare extracts line item data from invoices such as supplier, date and amounts and transfers the information to you finance system.

GL coding with DocuWare

With the use of table fields, data can be integrated with workflow tasks and a GL coding option can be displayed when the invoice is at the completion or approval stage.

Read more about GL coding in our blog - How To Reap the Benefits of Automated GL Coding with DocuWare.

Gain Control Over Emailed Invoices

In our experience many organisations struggle to gain control over emailed invoices.  They are either printed out, saved in an employee inbox or lost all together.   When it comes to finding invoices to make financial checks or during an audit, it's a lengthy process or near impossible.

Information contained in an invoice is often copied and pasted or manually typed into a finance or ERP system.  This wastes yet more time and is open to human errors.

With automated invoice processing software from DocTech, emailed invoices are taken from an inbox and automatically pushed into the software where they can be efficiently handled and the data accurately captured using OCR technology.

From here invoice data can be automatically pushed into a finance or ERP package saving employees time and effort while avoiding errors.

There is no longer a need to print invoices out as they remain digital through-out the journey.

Download our guide below on digital invoice processing. 👇

Digital Invoice Processing

Brexit

As a result of the post-Brexit UK-EU trade deal on 1st January 2021, organisations based in the UK, or that conduct business there, need to check their compliance regulations when it comes to cross-border operations.

Brexit has slowed down the supply chain and brought with it significant changes to customs and VAT processes. This is where DocuWare’s AP automation services can really help.

The UK now operates independently of EU laws, which means UK companies have to manage changes to tracking imports and exports, associated taxes and fees, paying new suppliers, custom tariffs and declarations, export paperwork, transport logistics, VAT and more. With an automated solution the bulk of manual work can be handled by the system. Organisations can:

  • Easily collect and store supplier details
  • Match invoices to purchase orders
  • Validate invoices and convert them if required
  • Match invoices to proof of delivery (POD) documents
  • Route invoices via a workflow for approvals with full transparency
  • Post approved invoice information into an ERP

Eliminate Long Searches

wastes 3.5 hours a week searching_boarder

Digitally processed documents that are stored and centralised cuts search times from hours down to seconds due to information being indexed in a set way.

A simple search of a customer name for example, using DocuWare’s drop down select list immediately brings up all invoices stored against that company name.

Narrow the search further to year or month and there is no longer a need to click through a large folder structure to get to the information you need.

Invoices that are categorised correctly also mean you’re audit ready, with documents in a secure archive accessible only to authorised users. Invoices are one of the most important assets to provide tax and payment compliance so having the ability to find them easily in an audit is vital.

Cut Manual Data Entry

Data entry time with DocuWare can be cut by 95% resulting in fewer manual errors. Automatic extraction of head and line-item data provides the assurance that information is captured correctly from the start. Automating the whole purchase-to-paid process ensures the right product was ordered, the right price was quoted and the right invoice was paid.

Visibility

Gain greater visibility and control of the Accounts Payable process with clearly defined steps. With a system that processes invoices before they’re due, your business can closely monitor billing discrepancies and payment terms, avoiding late payment fees while taking advantage of supplier discounts.

Reporting

Timely and correct financial reporting is only possible when information is up-to-date. DocuWare’s automation features ensure balance sheets and other reports are correct. The stress for employees is huge when a report is needed and there’s a scramble to find the right data.

DocuWare can help employees meet deadlines and avoid the headaches that come with disjointed data.   Automation is not focused on reducing employees away, but it’s about using staff time more efficiently to keep systems and processes running efficiently. Automation helps you grow your business while maintaining costs.

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The Benefits Of Automated Bookkeeping

Automated bookkeeping provides a simpler way of recording the daily financial transactions of a business.

The accounts payable department has a huge job on their hands, handling supplier invoices, chasing payments, verifying invoices against purchase orders and delivery notes, producing reports all while remaining compliant. 

The work load can be large and the pressure high with some organisations processing hundreds if not thousands of invoices every month. 

Frequent problems can occur when processes are paper based or manual, including lost invoices, duplicated payments, lengthy approvals and inaccurate data. 

The benefits of automated bookkeeping can be far reaching across the organisation and here we summarise the top four.

1. Save Time And Money

A digital platform stores all invoices, purchase orders and delivery notes in a centralised system.  This means no lost paper and no lengthy searches to find a document that could be in a filling cabinet, on someone's desk or in an inbox.Invoice automation benefits

2. Go Paperless

With a digital accounts payable system paper can be removed from the process entirely or phased out over time. 

For invoices that arrive via email, integration with Office 365 means they can be automatically picked up and pushed into the software, notifying an employee when their input is required.

Paper invoices can be scanned into the software and destroyed as there is no longer a need to file and store a paper copy.  The document can quickly and easily be recalled from the system whenever it is needed.

Removing paper not only frees up office space or the requirement for costly off site storage, but it avoids the chaos and associated errors that go with it.

Digital processes are faster and increase transparency making it easy to tell where an invoice is up to in it's lifecycle and what actions are outstanding.

3. Enable Hybrid Working

Automated bookkeeping software enables hybrid working as the solution is accessed via the internet. 

Enable your staff to work seamlessly whether at home, in the office or out on the road.

4. Improved Supplier Relationships

Automated software enables suppliers to be paid quicker as the whole process is completed in a shorter space of time.  

Only approved suppliers can be used in the purchasing process which removes verification checks.

You can read more in our blog The 7 Benefits of Accounts Payable Automation.

5 Financial Processes That Will Benefit from Automation

Financial processes are crucial to the success and growth of any organisation ensuring that money flows seamlessly through every department.

With that in mind, we outline below the five financial processes that will benefit the most from automation.

1. Invoice Processing And Accounts Payable

Automation can streamline the entire accounts payable process by applying digital workflows that take the strain off employees.

With automated invoice scanning software, invoice data can be accurately read, extracted and imported into an integrated finance package.  The software uses AI, Optical Character Recognition and machine learning to minimise errors, reduce manual data entry and save time. 

2. Expense Reporting And Reimbursement

Expense reporting is a lengthy and time consuming financial process for all involved.   Automating expense reporting allows employees to easily submit receipts and expenses through a digital platform, saving time and reducing the chance of fraud or errors.

3. Reporting And Analysis

Automation enables data to be gathered from various sources and consolidated into one system.  This speeds up reporting and provides much more accurate and up to date information.

4. Accounts Reconciliation

Financial processes like accounts reconciliation involves comparing and matching data from a variety of sources.  

Automation helps to identify discrepancies quickly and flag them to the appropriate person.

fraud detection

5.  Risk Assessment And Fraud Detection

Having proper risk assessments in place ensures the security of financial transactions, which is essential due to the growing sophistication of fraudsters.

Fraudulent activities amongst accounting processes can occur in a number of ways including:

  • Internal fraud where employees manipulate accounting records for personal gain
  • Financial statement fraud to deceive investors and stakeholders, and
  • Duplicate payments, either from vendors submitting multiple invoices, inaccurate data entry or system errors.

Implementing preventative measures such as the segregation of duties, additional training and technology solutions can all reduce opportunities for fraud and risk.

Automation and specialist software can identify unusual patterns and anomalies, and provide immediate alerts to the organisation.

For more detail on this, read our blog - 5 Financial Processes That Will Benefit From Automation.

What Is DocuWare?

DocuWare is a document management solution available both in The Cloud and On-Premise.  It provides a central and secure digital archive for all business documents. These documents are available from anywhere – at home, in the office or out on the road, by anyone with authorised access.

  • DocuWare provides quick and simple access to your indexed documents. There is no longer a need to print, store paper, save and forward emails or pay for expensive off-site storage.
  • Reduce overheads and give time back to staff so they can get on with more meaningful work.
  • Finance Workflow Software reduces the manual effort needed for invoice processing. Digital invoice data is captured, indexed, stored and pushed into an ERP or Finance package removing manual data entry and associated human errors.
  • Automate approvals based on predefined rules to move invoices through the system and reach approvers quicker. Any exceptions are flagged to the appropriate person making the invoice processing procedure faster and more transparent. With DocuWare you can improve approval time by up to 80% and cut data entry by 95% when using Intelligent Indexing.
  • Add annotated notes and digital stamps directly to the digital invoice to improve communication with colleagues, with the original and updated document both saved in DocuWare. This provides a full audit trail of approval history along with who changed what and when.
  • DocuWare’s invoice processing solution is available as a preconfigured system so you’re up and running faster. It comes with workflows, document templates and full security configurations and can integrate with your existing software environment.

Why You Should Choose DocTech for Automated Invoice Processing

DocTech was established in 1984 and we are the UK and Ireland's most experienced DocuWare partner, with a partnership spanning over 25 years. For 16 consecutive years, DocTech have achieved DocuWare Diamond Club status.

We understand that every organisation is different and has its own set of requirements and invoice processing needs. Our focus is to truly understand your business and work with you to establish the problems in your existing processes, and implement a cost-effective solution to achieve business goals.

MSV logo

Our clients stay with us for the long term and we’re proud of the relationships we’ve developed.   Mosscare St Vincent's Housing Group, a client since 2001 recently told us: "The fact we’ve been customers for many years shows that you guys are in it for the long term and genuinely want us to use your products and services to improve our business."

Our team has more than 80 years of combined experience of invoice processing solutions, expanding their knowledge further with each and every new implementation. We help our clients across both the private and public sectors work smarter, improve performance and reduce costs.

View our product video to see a more detailed view of the software.

Learn More About DocTech

Automated Invoice Processing FAQ

Having an accurate invoice processing system in place is vital for all organisations, and here we answer some of the most frequent questions we are asked.

What Is Invoice Processing Software?

Invoice processing software is a set of programs and instructions which tell a computer how to electronically handle invoices from receipt through to payment and storage.

Invoice processing can be, and is for many organisations a paper based and manual process but when carried out with computer software, each step can be automated to meet business requirements.

What Is Automated Invoice Processing?

When invoice processing is automated it means the data capture, validation, review and document approval can be carried out automatically by a computer software solution.

Invoice information is captured by either a scanner, automatically from an email sent or drag and dropped into the software from the desktop. From here invoices are validated by the system based on business rules; such as an invoice amount matching an approved PO for example. They are then reviewed, added to a cost centre and approved, via a task sent to the appropriate person to notify them an invoice is ready to be approved.

Is DocuWare Available With Sage Integration?

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Yes! DocTech has integrated DocuWare with all the different Sage packages, as well ERP, Finance, CRM, Housing and Educational systems. Integration with your existing systems is a key part of what we do.

What Is DocTech’s Solution For Automated Invoice Processing?

DocTech solutions quickly and easily capture invoice information from a variety of different document types including PDF, email, JPEG and TIFF.

Using machine learning technology, invoice information from predefined data fields needed for processing, such as supplier name, reference, invoice number etc. are automatically captured.

This capture can be customised to your organisations requirements and any information not recognised by the system can be highlighted by the user, simply corrected and remembered in the next data capture.

Conclusion

Organisations taking advantage of automated invoice processing, optical character recognition and machine learning capabilities are striding ahead of the competition.

Moving to a digital accounts payable process where invoices are automatically captured and securely stored brings huge benefits across the company.

Supplier relations are enhanced, better customer service, reduced overhead costs, improved bottom line, happier employees and less time wasted.

Manual and paper-based processes are slow and error prone and cannot easily scale up when needed. Implementing invoice processing software positions your organisation for growth and gives authorised users instant access to the critical data they need, no matter where they are located.

If your organisation is struggling with invoice processing in any way, whether there’s too much paper, duplicated payments, lost invoices, lack of visibility, stressed employees or a disjointed purchase to pay system then we’d love to explain how our solutions can help.

DocTech’s Free Discovery Call

We want to hear about what causes your biggest accounts payable headaches and what’s really driving your need for change. From there, together we will map out your current process and highlight the areas we can improve with our invoice processing solutions.

Streamlining your procedures with automation, removing the huge amounts of unnecessary work from your team and integrating into your existing software environment are what we do best, and it works. Make a change now and see the ROI.

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Contact us - info@doctech.co.uk or 0161 647 7040