Invoice automation is the process of automatically extracting data from vendor invoices and entering it within the company’s finance system. Instead of having to do everything manually, invoice automation simplifies the process, reducing manual input and human error in the process.
This usually involves the automation of several processes such as:
Advanced invoice automation processing software first extracts data from the invoice and enters it into the system.
Here’s the invoice automation workflow:
Invoice automation offers a variety of benefits to companies, reducing their procure-to-pay cycle and cutting down on inefficiencies by a significant margin. Here are some of the benefits that invoice automation offers.
Since data is automatically recognized and entered into the system, the margin for error is significantly reduced. The potential for transcription mistakes is generally high when invoice data is entered manually, especially since it’s such a tedious, repetitive task.
Invoice automation also reduces the chances of duplicate or erroneous invoices being paid out.
Secondly, with invoice automation, the time it takes to get invoice approvals and clear invoices is significantly reduced. Invoices are matched automatically and sent for approvals, which means they can be cleared much faster.
AP teams that have to perform repetitive tasks can benefit from invoice automation as it significantly reduces the burden on their teams. It also frees them up to focus more on high-impact tasks instead of performing these low-level activities regularly.
Timely payments automatically improve vendor relationships, leading to favorable terms. The greater transparency throughout the invoice lifecycle also allows vendors to quickly check what stage of processing an invoice is in.
This also means they don’t have to repeatedly call AP staff to find out about payment times. More importantly, the company can save money by making payment on time as they might be eligible for early-payment discounts.
A major benefit of invoice automation is that it improves compliances throughout the company. Everything is matched and digitally stored, leading to a comprehensive audit trail. More importantly, in case an issue arises, AP teams can be notified immediately.
Because entire audit trails can be reviewed instantly, it also helps companies reduce fraud in the AP department. Details can be quickly verified with vendors in case there’s an issue.
Invoice automation software often generates detailed reports regarding the time it takes to process invoices, the associated costs, and other details. This allows businesses to know exactly how their AP departments are performing. These reports are generally quite helpful for reviewing overall performance and identifying bottlenecks or areas for improvement.
SoftCo Procure-to-Pay is a fantastic solution that lets you automate your entire finance process, starting from procurement to invoice automation and posting the payment straight to your financial or ERP system. It reduces manual processes and duplication, resulting in cost savings of up to 80%. It’s a fantastic solution for companies that want to reduce spend and improve vendor relationships.