January 17, 2024 |
Have you ever wondered if there’s a better alternative to the slow, inefficient, and error-prone process of manual invoice capture? Getting invoices into your system accurately and efficiently from the start is the best way to ensure your overall Accounts Payable (AP) workflow is smooth and precise. Read on to discover how cutting-edge automated invoice capture solutions upgrade your AP system and bring you unprecedented efficiency, accuracy, and compliance.
What is Invoice Capture?
Invoice capture refers to the process of taking all the relevant information from an invoice and introducing it into your AP system. This typically includes vendor names, invoice numbers, dates, line items, and corresponding amounts. Digitally extracting, capturing, and converting this unstructured invoice data into a structured, machine-readable format is a crucial first step in the automation of your financial workflow.
The Importance of Invoice Capture
Automating invoice capture offers your business many advantages, including:
Saving Time and Boosting Efficiency
Manually sorting, entering, and checking invoice information can be time-consuming and monotonous. Relying on valuable multi-skilled employees to carry out this tedious work can lead to disengagement and poor performance.
Invoice capture automates this process, vastly reduces the time and effort required for data input, and allows for rapidly processing a large volume of invoices. Handling routine financial tasks more efficiently frees your AP team to focus on more valuable and engaging work.
Reducing Errors and Enhancing Accuracy
Automated invoice capture systems can significantly reduce the risk of human errors associated with manual data entry. Conexiom can capture your invoices with 100% accuracy, greatly enhancing the integrity of your financial records.
By automating invoice data capture, you can substantially save on costs associated with manual labor, including overtime and new hires. This is especially beneficial for companies dealing with a high volume of invoices.
Helping with Compliance and Auditing
Automated invoice capture ensures that financial data is consistently captured in a standardized format helping you comply with regulatory requirements.
Up-to-date and accurate financial records are crucial for making informed business decisions. Automated invoice capture accelerates the availability of data, enabling faster decision-making processes within an organization.
Integrating with ERP Systems
Transforming invoice data into a structured digital format makes it available to your ERP system. This integration enables the flow of crucial financial information across various departments and systems.
Improving Vendor Relationships
Automating invoice capture can lead to faster processing and payment cycles, positively impacting relationships with your vendors which can put you in a stronger position when it comes to negotiations.
What are the Challenges of Invoice Capture?
If you want to implement invoice capture successfully, there are some potential pitfalls to watch out for. Here are some of the key factors that can hinder the process:
- Data Variability: Invoices can come in diverse formats, styles, and structures, so effective processing requires sophisticated algorithms and techniques to extract information accurately.
- Handwriting and Quality Issues: Handwritten and scanned invoices can be particularly challenging for some types of automated software such as OCR. Overcoming issues related to illegible text, poor image quality, or variations in document conditions requires advanced image processing and text recognition capabilities.
- Language and Localization: Dealing with invoices in multiple languages and alphabets requires robust localization algorithms that can accurately extract information in diverse contexts.
- Integration Complexity: To be effective, automated invoice capture must integrate with your existing systems and workflows. This requires careful coordination to avoid incompatibilities and disruptions and enable a smooth data flow.
- Data Security Concerns: Addressing data security concerns is crucial in invoice capture. Strong encryption, access controls, and secure data transfer mechanisms must be in place to safeguard sensitive financial information.
How to Automate Invoice Capture
One method of automating invoice capture is by using OCR, or optical character recognition .
OCR is an older technology with well-known and significant limitations when it comes to capturing data accurately. Although it is an effective way to extract data from images, when used for documents, OCR can result in errors that require more time and human intervention to resolve. Also important to note that OCR alone isn't enough to process invoices as it requires additional software, like robotic process automation, to populate your system with the extracted data.
That’s why Conexiom, a modern automated invoice capture system, uses AI and machine learning (ML) for data extraction and only employs OCR to process invoices sent as images.
Conexiom’s automated data extraction is more efficient and accurate than OCR and removes the need for human verification. To ensure the extracted data is 100% accurate, the system carries out a 2-way match to validate the invoice information against the purchase order and a 3-way match against the receipt.
However, Conexiom also overcomes the other challenges of invoice capture.
Using ML, AI, and a neural network of prebuilt maps, Conexiom can process invoices in any format. These technologies also mean the platform can easily deal with handwritten or scanned documents and process multiple languages and alphabets to extract information accurately.
Conexiom’s invoice capture solution integrates with your existing technology stack, and service experts are available to support your automation transformation.
To see how automating invoice capture helps businesses stay competitive, explore our Woodhill Supply case study. Woodhill Supply’s adoption of Conexiom allowed them to capture invoice data and free up their AP team for value-added tasks.
ERP Add-ons vs. Dedicated Invoice Data Extraction Software
Invoice capture add-on modules that integrate with your ERP enhance the efficiency and accuracy of your AP processes. ERP add-ons can reduce manual errors, as well as allow for faster invoice processing and a more cost-efficient use of resources.
With the ERP as a single source of truth for all financial data, this setup can also improve your real-time financial visibility and management.
Another approach is to use dedicated invoice capture and data extraction software.
Specialized solutions support quick and accurate handling of a variety of invoice styles. The advantages include improved workflow automation, reduced manual effort, and seamless integration with existing ERP systems.
However, initial setup costs can be high, and you may encounter compatibility issues.
When selecting a solution, companies should consider if the software will be able to scale and adapt to meet their needs as their business grows and technology evolves. It is also important to carefully weigh whether you need a simple workflow tool or an automation tool. Both solutions have their use cases but offer vastly different outcomes.
With a workflow tool, the data extraction isn't 100% accurate, and every invoice will still require manual review before validation. Additionally, these tools require another outside solution to host purchase order and receipt data before they can perform 3-way matches and deliver invoices to the ERP. This typically requires employees to import those documents into a different platform every day, and it also means the ERP cannot act as the single source of truth.
On the other hand, an effective automation platform treats the ERP as the source of truth and performs critical processes like 2-and 3-way matching, validation, and routing within the system itself, making software such as Conexiom the ideal solution for anyone who needs fast, efficient, and accurate invoice capture.
Sonepar leveraged Conexiom’s to replace outdated OCR solutions and achieve high-level results, including automating 200,000 lines and saving over 1,000 hours monthly.
Automate Invoice Capture with Conexiom
Conexiom’s automation platform is the only solution that offers your business invoice capture with 100% accuracy. Conexiom can automatically extract relevant data from emailed or scanned invoices, convert them into EDI 810s, and then validate, route, and reconcile them in your ERP within minutes of receipt.
With rapid processing and full visibility into your invoices, due dates, and receipts, you can avoid late-payment penalties and take full advantage of early payment discounts.
Learn more about how Conexiom can improve your AP process and future-proof your financial operations.