How to Design Automated Invoice Processing Framework?

, ,

Automated invoice processing is extracting data from incoming invoices and transferring it to any ERP or financial system within seconds. To achieve this task, companies need a well-designed framework which works seamlessly.

Processing invoices and payments is a complex and a very time-consuming process with hundreds and thousands of invoices arriving in various formats (e-mail attachments, PDFs, paper based etc.). If accounts payable team is working manually to process invoices, errors and delays occur unavoidably.  For this reason, using an invoice automation software creates great benefits for companies.

How to Automate Invoice Processing?

Invoice processing as a business function, may seem relatively simple job with a low priority. It is not the case though. First of all, invoice processing has a multi-channel workflow and it sits in the middle of three critical processes: operations, production and finance. How can a company manage its supplier chain without running a fast, productive and error-free accounts payable operation? How is it possible to keep production lines (or services) working without managing your supply chain properly?

With its important role, invoice processing workflow needs to be improved. To do this, invoice automation solutions have been developed for the last decade. Let’s dive in details and see how to automate invoice processing.

Invoice Automation Basics

There are four main steps of invoice automaton.

  • Digitizing physical invoices (scanning)
  • Extracting data from invoices (invoice OCR). Powerful OCR and ICR engines let us to extract data from files in various formats such as PDF, jpg, TIFF.
  • Interpreting and analyzing the invoice content. AI and machine learning technologies come to help at this stage. Pre-trained invoice automation solutions are able to understand unstructured or nonuniform contents and classify them. No human intervention is needed.
  • Integration to core systems such as SAP, MS Dynamics, Oracle etc. (connectors and APIs)

An intelligent invoice automation software can handle these four steps seamlessly and help your company to save time, money and valuable other resources.

Invoice OCR or Cognitive Data Capture?

OCR (optical character recognition) is the technology which makes automated invoice processing possible.  When you scan a physical invoice or take a photo of it, OCR turns optical characters into digital data. ICR (intelligent character recognition) is the advanced version of OCR. It can even turn handwritten texts into digitally usable data.

However, invoice OCR does not suffice to fully automate invoice processing. It is mainly because, OCR software without an AI component can only extract data from pre-defined templates. When you add a new vendor to system, rule based OCR software is incapable of extracting data from new invoice layout since it doesn’t know how to process fields, line items, shapes etc.

Cognitive data capture, on the contrary, uses artificial intelligence to read invoices. Two key features of cognitive data capture are; ability of AI to learn by itself and ability to understand patterns and layouts which are not seen by it before.

Thanks to these two key features, cognitive data capture doesn’t require human supervision or continuous controlling. So that it really automates invoice processing and saves huge volumes of manpower. You can learn details about onVision Invoice Extraction solution here. 

/by

Why Intelligent Automation Is the First Step of Digital Transformation?

, ,

As the amount of data companies need to process in day-to-day operations becomes larger and larger, business processes get more sophisticated and intelligent automation needs gain urgency. There are many competencies that companies have to possess to keep pace with these requirements. Digital transformation is the overall framework which can be defined as the process of using digital resources to improve existing business models and culture or creating new ones.

Intelligent Automation as a Part of Digital Transformation

One of the main goals of digital transformation of an organization is to automate operations and processes. This not only about getting faster or more profitable, but also getting able to make better decisions and becoming more strategic.

Overall, we conclude that digital transformation is a more complex type of technology-enabled business transformation, which needs to address the strategic roles of new digital technologies and capabilities for successful digital innovation in the digital world (Yoo et al. 2010). We define it as the process through which companies converge multiple new digital technologies, enhanced with ubiquitous connectivity, with the intention of reaching superior performance and sustained competitive advantage, by transforming multiple business dimensions, including the business model, the customer experience (comprising digitally enabled products and services) and operations (comprising processes and decision-making), and simultaneously impacting people (including skills talent and culture) and networks (including the entire value system).

Digital Business Transformation and Strategy: What Do We Know So Far? by Mariam H. Ismail, Mohamed Khater, Mohamed Zaki

With this perspective in mind, we can understand why intelligent automation is such an important stage of digital transformation. It is so important because it is impossible to digitize processes and operations without utilizing intelligent automation tools. Companies need to free their employees from manual work as much as possible. So that employees can become more productive and focus on high value tasks instead of repetitive, time-consuming jobs.

Handling Data with Data Extraction

As we mentioned above, the amount of data companies need to handle is getting larger. It is not easy to process such a big amount of data, especially when it is generated through many types of documents. When data is arrived in various formats and mostly unstructured, we need a solution to extract, interpret and validate data. Data extraction tools are built to meet this demand and OCR technology has been enriched by AI assets.

Since it is possible to run intelligent automation only after proper data extraction from documents, it is critical to choose a well-developed data extraction solution.

What are the Stages of Intelligent Automation?

Although requirements and KPIs for intelligent automation differ from industry to industry, there are some common principles and methodologies to be used as a guideline.

  • Data Extraction: This is the first step towards successful automation. OCR and ICR engines working through AI based software, make it possible to extract data in various formats, from any type of document.
  • Data Processing: Once data is extracted and digitized, second step is processing it. Machine learning technologies come in help at this stage. Data validation and classifying is ensured with high accuracy.
  • Data Distribution & Automation: As a final step, structured and validated data should be distributed to relevant authorities and core systems. Integration to ERP or DMS software is undertaken at this stage and final automation tasks are completed.
/by

Invoice Processing Automation with RPA

, ,

While application areas of RPA (robotic process automation) are expanding steadily, one of the fastest growing area is back-office jobs and accounts payable (AP) operations. Companies who need to process high volumes of invoices periodically, suffer from complications of manual invoice processing.

Invoice processing is a key joint stage of many business operations. AP department needs to extract data from various invoice types and formats (PDF, printed etc.) and transfer these data into their own core system only after they verify the content. If this stage takes long to step further and discrepancies occur frequently, which is unavoidable during manual work, financial workflows start to tremble and fall.

How Can RPA Help to Optimize Account Payable Operations?

 

There are three main steps of AP automation through RPA:

  • Monitoring incoming invoices: via e-mail attachments, folders, servers
  • Invoice capture: extracting data with high accuracy (see onVision’s product)
  • Validation/approval: evaluation of invoice content by AI

You can see details of these steps, and most frequent use cases in Simplilearn’s video below.

 

 

Outcomes of Invoice Processing Automation

  • Among many benefits of automating invoice processing, we should emphasize key ones.
  • Shorter cycle time for AP operations and due to it better financial planning and internal harmony.
  • Compliance and audition requirements can be met easily, because RPA handles repetitive tasks which are prone to error with high precision.
  • Companies streamline financial part of vendor management process and it leads to several improvements from production to customer satisfaction.
/by

Intelligent Automation as A Way of Improving Employee Happiness

,

Too many companies and business leaders believe that using automation technologies is one of the smartest ways of gaining competitive advantage and profit. They are completely right; however, they overlook the human component frequently. When you run business automation technologies (RPA, process automation, intelligent document processing, data extraction etc.) within your organization, obvious benefits occur: reducing costs, speeding up operations, minimizing human error, getting more control and transparency.

All these benefits create great business results yet they can help to achieve something else, which is equally important: employee upskilling and satisfaction. If a company is able to use automation technologies to bring out the best in people, then it will take advantage of a lasting transformation of organizational structure and corporate culture.

How Does Business Automation Help Employee Upskilling?

In a recent Deloitte survey of more than 11,000 business leaders, more than 60 percent of respondents said they actively redesign jobs around artificial intelligence (AI), robotics, and new business technologies.

Robots, machines and business automation software can execute repetitive tasks much faster and more precisely than humans. Nevertheless, there are many critical skills such as innovative thinking, creativity, ethical judgement, responsibility, intuition which can be performed by only your human workers. And when people find room and time to use their skills, it is shown that they feel much better and engaged to work.

According to a recent survey, daily stress level of employees is getting higher. Intelligent automation can also help employees to cope with stress. When people have proper tools to use, they feel more secure and comfortable in terms of finishing their jobs on time and with success. 89% of employees believe that automation helped them to be more efficient on work.

Where to Start Intelligent Automation From?

It is always better to start simple. First, define what you need and specify bottlenecks of your processes. Listen your workers and involve them in decision making. Afterwards you can start looking for alternative solutions. Try to go step by step, but never miss the big picture. If you need an invoice extraction tool, for instance, be sure that it can integrate to your existing ERP or is able to streamline with a proper intelligent document processing framework.

/by