A guide to automated invoicing – Why is it essential?

Organizations strive to be successful and stay ahead of the competition today. Implementing the latest technologies and practices helps keep the organization up to date with best practices. Understanding the meaning, scope, and importance of automated invoice processes is essential. This article will help to learn more about the importance, benefits, and scope of automated invoicing.

Automated invoicing: What is it?

Here software technologies get used for processing invoices and scheduling the same for payment at a particular time and date. Software-aided invoice processing with minimal involvement of paper checks and people is the core of automated invoicing. The automated invoice process is as follows:

• A business receives invoices in the form of email attachments.
• Invoice data gets electronically captured and converted into digital files, then get added to the corporate database.
• Invoices approval gets processed.
• Payment and invoice data get integrated into the company’s accounting or ERP (Enterprise Resource and Planning) system.

Importance of automated invoicing

In the steps mentioned above of invoice processing, software technology is relevant from the very beginning. It converts invoice and payment data into digital files (online corporate documents) that are easily searchable.  Software technology significantly reduces the involvement of manual labor and time in invoice processing. 

Automated invoicing is vital because of the following benefits:

• Boosts productivity.
• It cuts processing time and speeds up payments.
• Cuts costs related to paper, labor, envelopes, stamps, and postage.
• The possibility of manual errors significantly reduces due to the lack of involvement of people and manual processes.
• Automatic scheduling of invoice payments (in advance) helping in getting discounts and avoiding late payment penalties if any.

Automated invoicing types

As a finance professional, you should focus on two types of automated invoicing, namely, invoice capture and optical character recognition (OCR).

• Optical Character Recognition (OCR): This automated invoicing technology captures texts from scanned documents and then converts the same to digital files. There are mobile apps too that scan invoices and extract data.
• Invoice capture: Invoice capture performs the function of OCR and captures key values and pairs for streamlining automated invoice processing.

Automated invoicing: The costs involved

One of the most significant advantages of implementing invoice automation software for AP processes is the considerable boost in the profitability of a business. As mentioned earlier, implementing automated AP processes is like an investment with profitable returns because the costs related to paper, labor, envelopes, stamps, and postage get cut. According to Kofax, invoice automation can reduce costs by 81% and increase efficiency by 73%.

Automated invoicing: Time-saving benefits

Implementation of AP automation software for invoice processing significantly boosts productivity. Productivity increases because the processing time gets reduced substantially. The probability of costly manual errors gets minimized because of the minimal involvement of manual labor. Another time-saving benefit of automated invoicing is the ease with which invoices can be searched and identified. They get converted into online digital files that get incorporated into the corporate database of a company.

We also have digital invoicing software like GetMyInvoices digital invoicing that delivers benefits like saving time by downloading invoices automatically.

Automated invoicing: Key technologies used

Software code and machine learning (a particular type of artificial intelligence) are the two key technologies used in automated invoicing. Software code provides the relevant instructions required to run the automated system efficiently. Machine learning identifies the approvers for invoices and detects patterns in invoice data and payment data.

Manual AP processes are one of the most significant barriers to productive and efficient finance departments. Automated invoicing is worth considering if you want to boost the profitability as well as productivity of your company.

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