As one of the most popular business automation tools, invoice automation software streamlines accounts payable workflow. This blog post will help you to understand how it works and get an idea on features that make a solution the best.
Is it Necessary to Use Invoice Automation Software?
If you want to accelerate invoice processing while minimizing errors and systemic bottlenecks in accounts payable workflow, it is necessary to use an invoice automation software.
Imagine a company (probably yours is also a fine example) which receives thousands of invoices per month. Processing these invoices manually is a high-touch, time consuming and error-prone task. It is possible to reduce invoice processing time up to eight times by using invoice automation software.
Benefit of this transformation from manual to automated processing is two-sided. Firstly, you streamline AP workflow within your company and therefore reduce costs and improve employee productivity. Secondly, you improve vendor management process to a considerable extent.
Working Principles of Automated Invoice Processing
Invoice processing cycle is almost the same for all companies.
- Collecting invoices
- Entering invoice data into ERP or accounting system.
- Sending to authorized agent for approval
- Getting approval
- Payment and archiving
Invoice automation covers the first 2 steps, which are the most time-consuming stages of AP operations. Data extraction is the main function of an invoice automation software. OCR (optical character recognition) is used to read and parse invoices. In modern invoice automation solutions, such as onVision, OCR is coupled with machine learning.
Using cognitive data capture framework, machine learning makes it possible to extract data from any type of invoice, without applying certain layouts. Thus, invoice automation software can read and interpret an invoice, which is not familiar to it.
What is the Best Invoice Automation Software?
Although it is not easy to specify a solution as the best, we can list features which make an invoice automation software the best. It is also important to ask some questions about your AP operation and determine key KPIs according to your answers.
- It must be cloud-based. So, it is easily accessible any time anywhere.
- It must be layout independent. So, you will never have to worry about new invoice types.
- It must offer built-in connectors for ERP systems.
- It must be able to parse handwritten invoices.
- It must be priced in a flexible model, without annual commitment.
- It must be enriched by AI and ML capabilities
What are the Benefits of Invoice Automation?
Beyond working in a paperless office, invoice automation offers great benefits to companies.
- Capture invoices without wasting time with manual processing
- Clean your system by stopping duplicate and fraudulent invoices
- Improve spend management with automatic workflows
- Keep employees productive and happy
- Ease and simplify approval cycle
- Easily integrate data to your ERP or accounting system
