If you want to automate invoice processing but don’t know where to start or which invoice automation solution to choose, this post will help you.
Automated invoice processing starts with extracting meta-data and line items from invoices, and ends with transferring structured, validated data to your ERP or accounts payable system. An advanced invoice automation solution allows you to complete invoice processing in minutes, no matter how large is the number of incoming invoices. So that payments can be tracked and done without any delay or error. This will streamline procure to pay cycle for any company.
Invoice Automation or Invoice OCR?
These two concepts are frequently confused. OCR is a component of invoice automation. OCR technology enables us to extract data from the image of an invoice and hence we become ready to step further towards fully automated invoice processing. Nevertheless, OCR can be inadequate in certain scenarios. For instance, OCR is not capable of reading handwriting or extracting data from an invoice layout which is not involved in the pre-defined rule sets. When such an occasion occurs, invoice automation is interrupted. ICR is a better solution in such cases.
Before going deep with following steps, you can read our blog post on comparative analysis of OCR and ICR technologies.
Automated Invoice Processing Software
There are two main groups of invoice processing software:
- Rule based OCR solutions
- AI based intelligent solutions
First group can be classified as basic invoice processing software and the second as advanced. The reason we call them advanced is that these solutions are more flexible and comprehensive with respect to rule-based OCR solutions. They are more flexible in terms of being able to process a much greater variety of invoice types. They are more comprehensive in terms of executing tasks, which go beyond data extraction.
How Does Invoice Processing Automation Work?
Accounts payable operations need to be automated through an end-to-end invoice automation solution.
- Invoice data extraction
- Data validation
- PO matching
- Fraud and duplication check
- Delivery for approval
- Audit & reporting
- ERP integration
To fulfill these requirements, automated invoice processing platform has to be empowered with AI and machine learning features. It is also a great benefit to choose a cloud-based platform, since it is much efficient to work on cloud. Cloud-based invoice automation solutions also offer pay as you use model.
Benefits of Invoice Automation
Streamlining the Process: Manual invoice processing is slow and prone to error. Automation streamlines invoice processing.
Reducing Costs: Decreased processing time and simplified workflow cuts unnecessary labor costs. Legal or commercial penalties will drastically decrease.
Remote Working: When you automate AP operations, remote work becomes possible.
Transparency & Audit Readiness: As human intervention is minimized; invoice automation improves transparency and system prevents errors in advance.
Better Vendor Management: Late payments or purchase planning clashes diminish.