The first step in implementing invoice automation is defining your goals. These include improving approval cycle times, making early payments, or accelerating approval handoffs.
It’s also important to document any changes to your processes and communicate them with stakeholders. This helps ensure that any new steps are followed and reduces the risk of human error.
Collect Payment Information Upfront
Whether you’re a contractor who fixes roofs, a makeup artist who styles a photo shoot, or a consulting firm that helps clients achieve their business goals, an invoice is an essential tool to have in place for requesting payment from your customers and clients. Invoices provide a record of the goods and services provided to each customer, including the cost of those goods or services, the date of service, and the payment due date.
Effective payment collection processes are critical to your company’s financial health. However, many businesses struggle to create timely and accurate invoices. This can be due to various factors, from human error to lack of time and resources.
Minimizing or eliminating errors in invoice processing is possible with the right technology. Invoice automation can streamline the process, allowing your team to focus on more valuable tasks. For instance, using an all-in-one procurement software solution like Sage Intacct Integrations, you can automate your entire AP process from procurement to payment in a centralized platform.
This can save your organization time and money by eliminating the need for manual processes. In addition, it can reduce the risk of missed payment deadlines and associated late fees. It can also improve relationships with vendors, who appreciate receiving their payments on time, and it can free up your employees’ time to focus on activities that will drive your business forward.
Automate the Invoice Approval Process
Once verified and validated, invoices must be approved for payment. This step is vital to the procure-to-pay process, but manual processes can be prone to human errors and damaged supplier relationships. Automating this step with an AP automation solution reduces the risk of delays and helps your organization improve cash flow by reducing manual, error-prone steps.
During this step, the system will index all invoices received and match them with corresponding documents, such as purchase orders or order receipts, in real-time to ensure accuracy. The matched data will be coded to the correct general ledger accounts and sent to the appropriate approvers for approval. AI-driven automation uses predefined rules to route each invoice to the right approvers, eliminating bottlenecks and ensuring compliance. Smart notifications and backup approvers also ensure that invoices are not lost if an employee is absent from work, preventing delays.
Once the invoice is approved, it will be automatically created in your accounting system and ready to be paid. This step should be a priority, as delayed payments can lead to missed discounts and late fees. In addition, a well-planned invoice approval process is important to maintain internal control and ensure that the responsibilities of each team member are clearly defined based on their expertise and job description.
Automate the Invoice Payment Process
With automated invoice processing software, companies can save significant money on labor. The software eliminates manual data entry and synchronizes supplier information, thus saving employees and accounting teams from tedious and time-consuming work. Additionally, the software can mark invoices as paid once the funds are transferred, thus avoiding overpayment, underpayment, or incorrect payments.
The best AP automation solutions offer features like coding, which assigns specific codes to individual line items on an invoice for easy reference and reporting. This makes it easier for managers to track expenses, even down to the last dollar, which can be critical for small businesses and those with high transaction volumes. In addition, a good AP solution will automate the payment process by matching an invoice against a company’s purchase order and goods received report to ensure accuracy.
This also reduces the risk of lost or misplaced invoices. Whether an invoice gets lost in the mail, caught in spam filters, or accidentally deleted, a good AP automation solution will keep tabs on the status of each bill and send notifications to the right people for action. This helps a business reduce the risk of missing or delayed payments, which can impact vendor relationships and company cash flow. It can also help a business qualify for early payment discounts many vendors offer, resulting in additional savings.
Automate the Invoice Delivery Process
Traditionally, an invoice would be received via email or post and manually processed through a series of steps that involve scanning and reading unstructured documents to get data into a digital system, verifying the sums on the document against purchase orders, routing it for approval, and then ensuring payment gets sent out on time. This process is often slow, inefficient, and error-prone. An automated invoicing system is designed to streamline these processes by automating invoice and payment processing.
Invoice automation begins with an invoice being scanned into the platform, which then uses OCR technology to capture any relevant information on the document. The software then matches and validates the data against existing records, such as GL codes, purchase orders, vendor details, etc., to confirm accuracy. Once all of the data has been verified and validated, it is then transmitted into a company’s ERP or accounts payable system for processing and payment.
Invoice automation platforms can integrate with other business systems, such as RPA, CRM, ECM, and accounting systems, allowing for a faster, smarter, and more efficient automated accounts payable workflow. These systems provide:
- An end-to-end solution for invoice processing and management.
- Eliminating costly errors.
- Reducing oversight.
- Boosting performance.
- Ensuring that all data is accurate and up-to-date.
