January 17, 2024 |
Sorting invoices and managing data is important, but it takes a lot of time, money, and effort. Setbacks and complications arising from human errors can lead to considerable expenses.
Automating invoices provides a swift and cost-efficient Accounts Payable (AP) workflow with numerous advantages. Invoice automation brings about shorter turnaround times from invoice generation to payment, opportunities for early payment discounts, and enhanced rapport with your suppliers.
Continue reading to discover how to automate your entire invoicing process and its positive impact on your bottom line.
What is Invoice Automation?
Invoice automation uses artificial intelligence (AI) and Machine Learning (ML) technology to streamline the invoice processing workflow. The software identifies invoices received by email or EDI, captures the data, validates, routes, and approves it before sending the invoice for payment and reconciling it with your ERP or accounting system.
Automating invoices reduces costs, increases accuracy, saves time and labor, and increases overall efficiency.
What Part of Invoicing Can be Automated?
Practically the entire invoicing process can be automated end-to-end, from initial invoice receipt to making a payment, including:
Invoice receipt and verification
- Purchase orders, receipts, and supplier invoices can be automatically detected and processed with the data sent to ERP systems.
- Automated verification confirms that the vendor already exists in your database.
- Invoice data can be two and three-way matched against POs and receipts.
Invoice routing and approval
- Rules can be preprogrammed to control invoice approval or routing.
- Exceptions are automatically flagged and routed to an authorized person for approval.
- Accounts receivable can be verified against accounts payable.
- Digital payment transfers can be made by the system.
How to Automate Invoicing
Different types of software use distinct approaches to automating invoices. Most software solutions use Optical Character Recognition (OCR) to extract textual information from invoices received in document and image format. However, OCR struggles to accurately assess handwritten or poor-quality documents as well as look-alike characters. This requires manual verification to ensure the integrity of the data captured from the invoices.
Conexiom’s invoice automation solution only uses OCR for invoices received as images; instead, it uses customizable data mapping with automated business rules to fully automate the entire invoice lifecycle while reducing the need for manual validation.
Conexiom offers solutions for both frequently-seen and first-time invoices. We can handle your frequently seen invoices with 100% accuracy by consulting with your AP team to understand your business rules and logic before building custom data maps and templates to meet your unique needs. For novel invoices, Conexiom’s solution uses advanced Machine Learning, AI, and prebuilt maps to identify, extract, and validate data.
Let’s take a look at how the overall process works.
Invoice Receipt and Capture
- Conexiom automatically detects unstructured or semi-structured invoices received via digital channels such as email, and processing begins without delay. For invoices received on paper or as digital images, OCR technology is used to enter them swiftly into the system.
- Conexiom’s Machine Learning and AI algorithms process the invoices, identify the relevant data fields such as vendor details, amounts, dates, and line items, and extract them with 100% accuracy.
- Using the ERP as the source of truth, Conexiom performs a two-way match between the invoice details and the PO to validate it and then makes a further three-way match with the PO, receipts, and the original invoice.
- If discrepancies are flagged, the system sends an alert to your AP clerks for further analysis.
- Invoices are then routed through an automated approval workflow using predefined reference tables, business logic, and business rules on the global, vendor, and SKU layers.
- Relevant stakeholders are notified to ensure timely approvals.
Benefits of Automating Invoices
Have you ever calculated how much time and money your Accounts Payable (AP) team spends handling invoices? Depending on the complexity, it can take hours or days to fully process an invoice, and on average, each can cost businesses up to $15. Optimizing this process is good for your bottom line.
Let’s look at what you can gain from automating your invoice processing.
Reduce Errors and Improve Accuracy:
The traditional methods of processing invoices require employees to exercise meticulous attention to detail despite the monotony of the work.
No matter how diligent your employees might be, mistakes are unavoidable. Invoices can get misfiled or lost, figures misread or mistyped, and payments can be duplicated
Errors in invoice processing can have serious consequences for supplier relationships, compliance, and your bottom line. Duplicate payments are estimated to cost businesses $100,000 for every $10M spent.
However, automated invoice software can reduce or even eliminate errors completely.
Conexiom is the only invoice processing platform that can offer 100% accuracy in invoice processing and secure the integrity of your financial records.
Save on Costs
With an effective automated invoice processing platform, you can minimize employee time spent on AP. This lets you redeploy team members to more value-added tasks, reduce new hires, and restrain overtime spending.
Speeding up your payment processes also lets you take advantage of five times as many early payment discounts and steer clear of penalties for late payments.
Conexiom customers can cut their invoice processing costs by as much as 81%.
Automated invoice processing makes adherence to regulatory and compliance requirements much more painless.
Conexiom’s platform treats your ERP as the source of truth. It improves the accuracy of your financial records thanks to a two-way match between the invoice and the PO during validation and a three-way match between the PO and receipts and the original invoice. If exceptions are found, your AP team will be alerted to review any discrepancies.
It also gives you real-time access to up-to-date invoice data to generate accurate financial reports on demand.
Automating invoices means no approval bottlenecks due to errors, understaffing, or invoice overload. Speeding up the approval process means faster payment cycles and better vendor relationships.
Manual invoice handling is a complex procedure that can lead to lost invoices, delayed payments, and burnout in understaffed or overworked AP teams.
Automating invoicing means software rapidly captures, processes, validates, and routes these invoices in seconds rather than hours. This streamlined workflow means you can be confident that invoices are managed efficiently, payments are made promptly, and days payable outstanding are reduced.
Your AP team can focus on value-added tasks that require the human touch, keeping them engaged and productive.
Find out how Woodhill Supply implemented Conexiom and saw ROI in just four weeks.
Automate Invoicing with Conexiom
Conexiom has two decades of experience helping companies of all sizes automate invoicing.
We offer our clients:
- 3x as many invoices processed compared to manual methods.
- 73% faster invoice processing times.
- An 81% reduction in processing costs versus manual methods.
- Access to 5x as many early payment discounts.
- 100% data accuracy
Explore how our invoice automation platform can help you cut costs, pay early, and transform your organization into a future-ready business.