6 Ways Invoice Automation Helps Business Processes
What is Invoice Automation?
Invoice automation is using technology to automate and streamline the accounts payable process. It involves digitizing invoices, extracting data from them using optical character recognition (OCR) or other technologies, and automatically populating that data into an accounting or ERP system. Invoice automation can also involve automated routing and approvals, as well as integration with payment systems for faster and more accurate payment processing. By automating the invoice process, businesses can reduce errors, save time and money, improve visibility into their financial data, and optimize cash flow management.
Why Companies are Hesitant to Invest in Invoice Automation
Many companies around the world have a manual accounts payable system. These processes may have been in use since the company first started. The motto “if it ain’t broke, don’t fix it” is something we commonly hear when we approach prospective clients about invoice automation. We’ve compiled the top four reasons businesses are hesitant to adopt invoice automation, which are:
Personalization: When invoices are processed manually, there is more room for personalization and customization. This can be helpful for building relationships with suppliers and customers.
Flexibility: Manual processes can be more flexible, allowing for exceptions and changes to be made easily.
Control: With manual processes, there is more control over the process, and it can be easier to identify and address errors or discrepancies.
Cost: Depending on the volume of invoices processed, manual processing may be less expensive than investing in an automated solution.
However, it is important to note that these benefits may not outweigh the potential drawbacks and risks associated with manual accounts payable processes, such as increased processing time, higher error rates, and limited scalability. In this blog, we will discuss the top six ways invoice automation software can improve your accounts payable process while also providing insight on how an automated invoicing process addresses personalization, flexibility, control, and cost savings.
The 6 Benefits of Automated Invoice Software
Most solutions make use of artificial intelligence (AI) in some way or another. AI can be used to automate and streamline various aspects of the expense management process, from analyzing and categorizing expenses to identifying patterns and predicting future spending.
One of the most common ways AI is used is for automatic expense analysis and categorization. This can be a huge time-saver for organizations, as it eliminates the need for manual data entry and classification. Machine learning algorithms are often used for this purpose, as they are able to learn and adapt over time to become more accurate in their categorizations.
In addition to automating the expense management process, AI can also be used to improve its accuracy and effectiveness. By analyzing past spending patterns, AI can help organizations predict future needs and make more informed decisions about where to allocate their resources. This can help organizations save money and avoid potential financial problems down the road.
1) Increased Efficiency
Invoice processing can be a time-consuming and tedious task for any business, large or small. Automating this process can help to reduce the amount of manual work required, resulting in increased efficiency and productivity for your accounts payable department.
There are many benefits to automated invoice processing, including the elimination of manual invoice processing steps and data entry, reduced risk of human error, and improved accuracy. Also, automation can provide real-time visibility into invoice status and help identify potential bottlenecks in the process.
The elimination of manual data entry frees up employees’ time to focus on more value-added tasks, such as developing new products or services, providing customer support, or generating sales leads. Additionally, automated systems are less likely to make errors than humans when entering data into an ERP or accounting system.
Another benefit of automated invoice processing is that it can speed up the overall approval process. With improved workflow automation, faster invoice approval can lead to quicker payments and improved supplier relationships. It can also help businesses avoid late payment penalties and interest charges.
Overall, automating invoice processing and business processes will have a positive impact on a business’s bottom line by increasing efficiency, reducing costs, and improving supplier relationships.
2) Better Audit Trails
As businesses increasingly look to automate their operations, automating accounts payable is one area that offers significant potential benefits. Automating invoice processing can help improve efficiency, reduce errors, and save time and money. One key advantage of using invoice processing automation software is that it can provide detailed audit trails.
Audit trails are an important tool for tracking and monitoring invoice processing activities. They can help businesses to identify potential issues and bottlenecks in the process, and make it easier to resolve any problems that may arise. Also, audit trails can provide valuable insights into how the process is working and whether improvements could be made.
There are a number of ways in which automated invoice processing can create better audit trails. For example, by automatically capturing data from invoices and storing it in a central database, businesses can have a complete record of all their invoices in one place. This makes it much easier to track invoices and activity over time. Additionally, automated systems can generate reports that provide valuable insights into the performance of the invoice processing system.
Overall, better audit trails are one of the key benefits of automating your accounts payable workflow. By making it easier to track activity in the accounting system, businesses can gain valuable insights into how the process is working and make necessary improvements.
3) Improved Accuracy of Accounts payable
Automated invoice processing can provide businesses with improved accuracy. This is because automated processes are less prone to errors than manual processes. Fewer mistakes means improved accuracy for businesses, which can lead to better decision-making, improved efficiency, and reduced costs. Additionally, automated invoicing processes can provide businesses with real-time visibility into the status of invoices, which can help to identify potential bottlenecks in the process.
Accounting teams can also make costly errors when verifying invoices. When a vendor invoice is returned, 2/3/4-way verification is essential for catching errors that reduce duplicate payments and help track missing invoices. With the technology behind expense managment software, paper invoices can also be managed seamlessly and reduce manual data entry burdens on the accounts payable clerk.
4) Better Financial Management with automated invoice processing
Automated invoice processing can provide businesses with better visibility into their financial data. This improved visibility can enable businesses to better manage and control their finances. With automated invoice processing, businesses can track invoices and payments, identify trends, and make informed decisions about spending. Also, automated invoice processing can help businesses avoid late payments, reduce fraudulent activity, and improve cash flow.
An area of opportunity that is often missed in a manual process is early payment discounts. When an AP department is processing their bandwidth, valuable discounts are often overlooked.
All of these benefits can lead to better financial management and control for businesses.
5) Scalability of processing invoices
As businesses grow, their volume of invoices also increases. This can lead to problems if businesses don’t have a way to scale their invoice processing. Automation can be easily scaled to accommodate growth in invoice volume. This means that businesses can continue to process incoming invoices efficiently and effectively, without having to invest in additional resources. Automation can help businesses achieve ROI on the initial investment in automated invoice processing, while also making sure that the process remains efficient and effective over time.
6) Compliance
AP automation software can help businesses follow regulatory requirements and company policies by managing invoice approvals. This is because automated processes can help to ensure that invoices are processed accurately and on time. Additionally, automation can help businesses to track invoices and payments, identify trends, and make informed decisions about spending.
The approval process will also see a substantial boost in efficiency, particularly when exceptions occur. In a manual process, exceptions on approved invoices typically fly under the radar or are approved without documentation. With invoice automation, exceptions are flagged for review and can either be approved, denied, or consulated on within a central system. Automated invoice processing software, such as InvoiceAnywhere, uses AI and machine learning to recognize patterns for exceptions and will provide suggestions on how to handle exceptions from the requisition request through payment of vendor invoices.
All of these benefits can lead to better compliance with regulatory requirements and company policies.
Conclusion
In conclusion, there are many compelling reasons to automate your invoice processing. Increased efficiency, better audit trails, improved accuracy, better financial management, scalability, and compliance are just some of the key benefits that automation can provide. By freeing up employees’ time, reducing errors, and providing real-time visibility into invoice status, businesses will see ROI while also improving supplier relations and providing regulatory compliance. If you’re still processing supplier invoices manually, it’s time to take advantage of the many benefits that automation can offer.
About ExpenseAnywhere
Headquartered in Pittsburgh, PA, USA with offices on three continents and clients all over the globe, ExpenseAnywhere is a world–class provider of exceptionally powerful, easy–to–use, web–based solutions for travel and expense management, supplier invoice processing, and p-card / prepaid card management.