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Standardizing all vendor invoices on a conventional template is very important before it’s entered into the system. Most organizations work with different vendors, each of which often send invoices using different templates. 

Naturally, feeding every invoice into the system manually is not only time-consuming, but creates an unnecessary burden on your AP department. Autocoding invoices is one of the best ways to quickly generate metadata for invoices and feed it into the system. 

What is Autocoding?

Autocoding is a feature provided by most invoice processing software. It uses a series of specific parameters to quickly process invoice information, including the name of the vendor, particulars of the invoice, and of course, the amount from the invoice. 

The extracted information can then be used to generate important metadata for the invoices. This includes information such as:

This information allows the company to process and classify invoices. Auto-coding becomes especially useful when a company has to process non-PO invoices. Advanced invoice processing software uses machine learning (ML) technology, along with Optical Character Recognition (OCR) to capture data from the invoice.  

This information is then extracted using ML and then routed for automatic matching. Non-PO invoices can automatically be routed to the AP team for coding and for approval from relevant departments. This information can be used for establishing audit trails and for invoice summaries. 

Key Benefits of Autocoding Invoices

Instead of having to do everything manually, auto-coding invoices makes it easy for businesses to quickly process invoices. When using invoice processing software that contains auto-coding, companies can reduce resource consumption dramatically. 

Instead of having a member of the AP team go through invoices one by one to record relevant details, OCR technology automatically extracts this data. This not only improves productivity, but it also reduces the chances of inaccuracy. 

Large amounts of documents can be saved and accessed with a couple of clicks, making it easy for AP teams to manage invoices more effective. 

Applications of Autocoding Invoices

In case an invoice does not contain data that makes it easy to identify, companies can use auto-coding to identify them. Autocoding is also handy when AP teams want to identify specific data from different invoices.

When identifying specific invoice-related documents, AP executives don’t have to worry about spending their time carefully reviewing and identifying data from each document on their own. Instead, all documents can be quickly identified and coded with relevant titles and dates using software. 

With the help of auto-coding, some software programs can even pre-approve invoices and authorize payment if it falls within the defined threshold. Using comprehensive matching technology, the software automatically matches invoices against vendors with the help of identifiable data. 

If the amounts fall within defined thresholds, the software can also be set up to approve payments. This allows companies to reduce the time it takes to approve poorly written invoices, without letting them affect vendor payment times. 

More importantly, since the software uses machine learning, it continues to get better and more accurate over time as it processes more invoices. Since it only searches through data within the database of already-provided invoices, and matches them, the risk of approving fraudulent invoices is significantly reduced. 

This helps improve efficiency, especially when companies have to process invoices that are spread over several pages or those that contain numerous invoices. You can even set up confidence levels so you know when data cannot be recognized. The AI auto-fills custom fields and continues to get better with time, improving data capture and entry accuracy as it processes more invoices. 

Make Invoice Processing More Efficient with AP Automation Software

SoftCo’s AP Automation software makes it easy to process vendor invoices and auto-code, whether they are PO or non-PO invoices. The data is captured using SoftCo’s OCR technology or the company’s outsource data capture service. It supports both 2-way and 3-way matching. 

And, it supports autocoding, letting you choose from pre-configured rules to determine the treatment for non-PO invoices. You can also choose from a selection posting templates that are associated with your vendors.