![]() The system verifies that the payee exists and that the purchase order listed on the invoice is the same as the number on the original purchase order.The invoice processing prebuilt AI model extracts key invoice data to help automate the processing of invoices. The data is entered into the company’s accounting system and recorded as a credit in the AP account of the general ledger. The text is extracted courtesy of optical character recognition (OCR) technology, and pertinent data, including the vendor (payee), purchase order number, payment due date and amount are entered into the AP system. The vendor bill arrives, either in paper format to be scanned by a person or in electronic format (51% of the time for the latter, according to Beanworks). While the workflow from invoice receipt through payment can differ from one company to another, it typically includes the following steps. Automation can address those pain points and other common invoicing problems, such as lost or missing invoices, fraudulent invoices and the inability to approve invoices in time to capture discounts. Manual data entry and inefficient processes top the list of challenges AP professionals face, according to a 2021 survey from Levvel Research. The steps in between comprise the business’s workflow - such as extracting data and routing invoices to approvers - all of which are accomplished using robust AP automation software that goes through a series of predetermined checks, or rules, to determine whether the invoice is correct and can be paid. The automated invoicing process begins when a company receives a vendor invoice for goods purchased or services rendered and concludes when a payment is sent. Automated invoicing shoulders the load, slashing processing time (and associated costs) and helping the business better manage cash flow by appropriately timing payments. ![]() How Does Automated Invoicing Work?Īs a business grows and the volume of invoices it receives increases, the more time-consuming and labor-intensive it becomes for accounting teams to manually process and pay them. At each step, the software makes an either/or binary decision and, based on the result, moves to the corresponding next step. Think of invoice automation as a workflow. Then it moves to the next step in the process. ![]() For instance, when the software identifies the purchase order on the invoice, it might query the purchase order database to ensure a matching number is on file. With invoice automation, when a business receives an invoice - either electronically or a paper bill that must be scanned - software parses different bits of information from it and then decides what happens next based on predetermined rules. To understand invoice automation, consider how an email goes through a series of security tools, such as antivirus and anti-malware software, before it’s deemed safe to land in the intended recipient’s inbox. Invoice automation helps a company manage its cash flow.Īn automated invoicing system receives vendor invoices and automatically manages their processing through payment via a specific workflow that is constructed around a series of “if this, then that” business rules.At the heart of an invoice automation system are a series of business rules and tolerances that mandate how and whether an invoice proceeds through the AP workflow.Invoice automation reduces the time and costs involved in error-prone manual processing.Indeed, invoice automation is estimated to save businesses $35,000 per year, according to Beanworks’ 2021 survey of 600 AP employees. Automating accounts payable (AP) substantially reduces the time it takes to process invoices manually, which in turns lowers operational costs and fosters better relationships with vendors. Invoice automation, also called automated invoice processing or automated invoicing, relies on software to handle the end-to-end receipt, management and payment of vendor bills. Invoice automation also leads to happy vendors, who appreciate being paid on time, and happy employees, who can be redeployed to work on more high-value projects. Invoice automation can lead to other savings for businesses, too, such as eliminating late fees that are incurred when a payment misses its due date. ![]() The exact amount of that hidden cost depends on whose research you’re reading, but the trend across all is clear: Compared to manually reviewing and paying invoices, automating invoice processing saves companies a substantial amount of time and money. East, Nordics and Other Regions (opens in new tab)Įvery invoice your business receives contains a hidden cost - the cost to process and pay the invoice.
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