In any business, managing accounts payable efficiently is crucial for maintaining smooth financial operations. One essential aspect of accounts payable is invoice processing. Invoice processing is the method by which businesses handle incoming invoices from vendors or suppliers. Efficient invoice processing is essential to ensure timely payments, avoid late fees or penalties, maintain strong vendor relationships, and obtain a clear picture of the company’s financial liabilities.
Traditionally, invoice processing has been a manual and time-consuming task, often prone to errors and delays. However, with the advancement of technology, businesses can now leverage smart solutions to streamline and optimize their invoice processing workflows. In this article, we will explore how these technologies, including OCR (Optical character recognition), IDP (Intelligent Document Processing), RPA (Robotic Process Automation), and BPA (Business Process Automation), can make your invoice processing smarter and more efficient.
Steps for Processing Invoices
Before delving into the technological solutions, let’s first break down the typical steps involved in invoice processing:
- Invoice Receipt: The process starts with the receipt of an invoice from the vendor. It can be anything from receiving a physical paper document to electronic invoices via email or online platforms.
- Invoice Verification: In this step, the invoice’s accuracy is verified against purchase orders, delivery receipts, or any other supporting documents to ensure that the goods or services were received as expected.
- Data Entry: The relevant data from the invoice, such as invoice number, date, item descriptions, quantities, and amounts, needs to be accurately entered into the accounting system for recording and payment purposes.
- Approval Workflow: Depending on the company’s policies, the invoice may need to go through an approval process before payment. This may involve routing the invoice to various stakeholders for their review and approval.
- Payment Processing: Once the invoice is approved, it is scheduled for payment, and the transaction is recorded in the accounting system.
- Archiving and Reporting: Finally, the processed invoice and all related documents are archived for future reference and reporting purposes.
Technologies to Make Your Accounts Payable Invoice Processing More Efficient
To enhance the efficiency and accuracy of invoice processing, businesses can leverage several cutting-edge technologies. Some of the most impactful ones include:
1. OCR (Optical Character Recognition)
OCR is a technology that converts different types of documents, such as scanned paper invoices or PDFs, into machine-readable text. By using OCR, you can automate the extraction of relevant information from invoices, eliminating the need for manual data entry. This significantly reduces the chances of human errors and speeds up the entire processing cycle.
2. IDP (Intelligent Document Processing)
IDP takes OCR to the next level by incorporating artificial intelligence and machine learning algorithms. It can not only extract data from invoices but also intelligently understand and process the information. Intelligent Document Processing can handle unstructured data, adapt to varying invoice formats, and even learn from previous processing patterns to continuously improve accuracy and efficiency.
3. RPA (Robotic Process Automation)
RPA involves the use of software robots or “bots” to automate repetitive and rule-based tasks. In the context of invoice processing, RPA can be employed to handle routine tasks. For example, data entry, verification against purchase orders, or even routing invoices for approvals. This frees up human employees to focus on more strategic and value-added activities.
4. BPA (Business Process Automation):
Business Process Automation is a comprehensive approach to streamlining business processes, including invoice processing. It often integrates multiple technologies, such as OCR, IDP, RPA, and workflow automation, to create an end-to-end automated and seamless process. With BPA you can implement accounts payable workflow automation, that will optimize the entire AP function, leading to faster processing times, reduced costs, and improved accuracy.
IDP + BPA: The Most Efficient Combination for Accounts Payable Invoice Processing
While each of the technologies mentioned above can individually enhance invoice processing, the most efficient solution lies in combining IDP and BPA. By integrating IDP’s intelligent data extraction capabilities with BPA’s holistic process automation, you can achieve a seamless and intelligent invoice processing workflow.
Here’s how the combination works:
- Intelligent Data Extraction: IDP accurately captures data from invoices, regardless of their format or layout. This eliminates manual data entry errors and ensures that the information is ready for processing.
- Automated Workflow: With BPA, the entire invoice processing workflow is automated, from verification to approvals and payment scheduling. The system can intelligently route invoices to the appropriate approvers based on predefined rules, speeding up the approval process.
- Exception Handling: IDP’s machine learning capabilities enable it to learn from past data and handle exceptions more effectively. If an invoice deviates from the usual patterns, the system can intelligently route it for manual review or flag potential issues for human intervention.
- Scalability and Flexibility: The combination of IDP and BPA can handle high invoice volumes with ease. As the business grows, the system can scale up accordingly without compromising on accuracy or speed.
Get Started With Accounts Payable Invoice Processing on Google Workspace
If your organization relies on Google Workspace for its operations, then discover the power of automation in accounts payable invoice processing by watching zenphi’s insightful webinar recording. In just under an hour, we will guide you through the process of automating invoice routing using IDP and BPA, streamlining your workflows like never before.