Invoice Processing Automation Software: 6 Reasons to Build Your Custom-Shaped Solution
Invoice processing automation software maintains its position as a key digital trend within the accounting domain. Even a small-scale business receives a whole lot of invoices every day, which imply time-intensive manual routing and approval. Therefore, industry leaders strive to adopt automated solutions to optimize xpenses and workflow.
We at Surf have been creating digital solutions and mobile apps for banks, trading platforms, and marketplaces for over 12 years and are quite familiar with the ‘pain points’ encountered by companies on their way to digital transformation. In the article, we’ll explore invoice processing automation tools, their key features, and their top vendors. In the end, you’ll get a clear picture of their possible contribution for your activities and learn how to choose a suitable system for your goals.
Benefits of automated invoice processing
Manual accounting has numerous drawbacks compared to automated one. Firstly, it takes longer to process the same number of invoices manually than electronically; then, a high risk of errors — everyone’s heard about inputting mistakes that made recipients millionaires due to a few additional zeros; lastly, a potential threat of insider’s fraud, with manual adjustments being in the center of some billion-dollar corporate scandals. Let’s check why businesses should automate invoice processing.
Automation software allows to completely digitize invoice issuing and payment and avoid excessive paper and ink consumption. It saves money on expendables and office’s storage space and (what’s important as well) preserves trees and nature.
Streamlined and faster workflow
Such platforms speed up the collection and approval of invoices, decreasing payment time. Besides, most of the software for automatic invoice processing can be integrated with SAP and procurement systems through APIs, further optimizing payment workflow.
When a company grows, so does the amount of payments, which leads to hiring additional staff. Obviously, a company’s size influences software cost, but it is less troublesome to purchase a software upgrade than to conduct an HR process and expand office space to accommodate new members of accounts payable teams.
Fewer missed payments
With electronic invoice processing, the risk of paying a surcharge for payments made past the deadline is lower, as well as a chance of getting discounts on the early ones is higher.
Decreased audit prep time
For audits, searching for paper documents can be really time-consuming. And invoice processing software allows to keep all documents organized and stored in secure digital storage accessible to authorized employees only.
Accounts payable (AP) automation keeps the entire invoice processing within one system, which contributes to stronger security and lower risk of fraudulent activities like manual adjustments and tampering.
How it works
The exact workflow of automated invoice processing depends on the software used. There are 5 main steps it usually covers:
- A company receives an incoming invoice via a dedicated email address as an image or PDF attachment.
- Scanning the attachment, the software captures supplier details, descriptions of goods, purchase amount, and other details.
- The extracted data is converted into text, mapped by the system and verified in line with business requirements. If unverified, the invoice goes for manual review and editing.
- After successful verification the system passes the document for approval – the process depends on the company’s internal rules.
- Once approved, a payment is made and the system generates a report with its details, which can be extracted or stored in the corporate SAP system.
Automated invoice processing key features
Any software for automated processing of invoices has several main components. Let’s consider the topic in more detail.
Optical character recognition capabilities allow the platform to detect data in various formats and convert it into text. The function is usually implemented by using a plugin rather than created from scratch.
For instance, when Surf developed a mobile app for Pakistani neobank, the team integrated ID WISE solution into the app. It allowed the upload of document details by simply photographing a passport and made the verification of identity process entirely remote.
Neobank app by Surf
Intelligent Document Processing
After the details are extracted from invoices, the system interprets them. Further, IDP technology helps to transform seemingly random characters into values that can be verified against a company’s business rules and passed on to payment confirmation. While OCR is a rule-based solution with limitations in recognizing uncommon layouts, IDP uses smart algorithms and self-learning abilities to correctly interpret a wide range of documents.
In the world that is entering the era of remote work and decentralization, it is better to store invoices in secure cloud storage. This provides trackable access to digital documents from anywhere for the account payables team; also, it makes business more scalable because expansion doesn’t require setting up additional physical servers.
Any business that deals with a lot of payments aims to make transactions for key partners or VIPs a priority. Electronic solutions should provide an option for automatic regulation of invoices’ position in a query according to predetermined rules and attributes.
Just as cloudification makes the process more accessible for remote workers, mobile access can take things even further. The best way to achieve this is having a version of software adapted for smaller screens.
A great example of such finance document management is a mobile corporate banking app. Developed by Surf, the app has a dedicated section where users can search for and view invoices, as well as create new ones from templates in just a few taps.
Mobile corporate banking app by Surf
To successfully pass audits, prevent fraud, and avoid fines, payment automation should meet both internal and external requirements on financial reporting. This includes end-to-end transparency of the whole payment history, from its appearance in the system to payment approval. Thorough legal compliance with global (GAAP, IFRS) and local accounting standards (SOX) decreases the risks of double, inflated, or false invoices, as well as fines from state regulators.
Best automated invoice processing software
Zoho Books. Introduced in 2011, Zoho Books is an electronic AP solution designed primarily for freelancers and small to medium-sized businesses. It is known for effortless setup and import processes, allows users to customize sales and purchase transaction templates’ appearance, and supports the creation of external alerts or in-app notifications triggered by specific activities.
OpenInvoice is a B2B invoice management system made for the oil & gas industry that accelerates accounts payable procedures, streamlining payments for contracts to suppliers and partners worldwide and matching purchase orders to receipts and invoices. The platform comes with built-in audit logs, role-based views and privileges, as well as detailed reports.
Coupa is a vendor of electronic services with 2 or 3-way matching rules (to ensure payments are aligned with orders and receipts) and has adjustable tolerance settings along with extensive routing rules customization. The platform automatically scans for early payment discount opportunities and allows users to grant payment approvals from mobile devices or even emails.
AvidInvoice. One of the most popular tools among those automating medium and large size businesses, AvidInvoice has tools for accurately identifying various documents, intelligent routing, customizable approvals and real-time reporting, which makes regular billing much easier.
Yooz was designed with a focus on mid-sized enterprises that process around 100 invoices a month. The cloud-based accounting service utilizes robotic and AI technologies to streamline the company’s payment processing, approval control, fraud detection, and cash management. The platform supports integrations with over 250 ERP platforms and business apps.
Summing things up
Automation of invoicing brings accuracy, efficiency, speed which are hardly achievable with manual payment handling. Studies prove that eleminating manual data inputting, routing, and approval is one of the most desirable things for an accounts payable team and business as a whole. Finally, it should be one of the company’s top priorities to automate accounts payable with a suitable ready-made solution or create its own to be integrated into the existing software ecosystem.
Surf has broad and in-depth development experience, having created native and cross-platform applications that are performant, secure, and modern-looking. Our clients include both multi-million enterprises and emerging startups in fintech, m-commerce, and other industries.