Posted by Bill Sengstacken ● 5/14/21 2:08 PM
How to Automate Invoice Processing
Invoice processing is time-consuming and tedious. There’s a lot of repetitive work. It’s prone to human error. Getting proper approvals and sign-off in a timely manner can be challenging. Even for a smaller startup, processing invoices for payment quickly is a challenge that eats a lot of time that could be spent on more productive endeavors.
As an organization grows, the number of invoices arriving that need to be processed and paid can be substantial.
The growth in vendors and invoices adds complexity to the process. Terminology, fonts, and formats can vary from vendor to vendor. Some invoices will come as PDF attachments. Others will arrive in the body of an email. Some may still arrive on paper, sent through the mail.
Clearly, there is a need to automate invoice processing. But how do you do that?
Audit Your Invoice Payment Processes
The first thing to do is to have a clear understanding of your current processes. I would suggest mapping everything you do as a flowchart. It’s likely that there will be some “decision points” in your workflows. Be sure you account for those “if this/do that” parts of your process.
Be as detailed as you feel is necessary to achieve your required results. Should there be points in your process that typically require human intervention, make that known as part of your flowchart. This would include gathering those needed signatures and sign-offs, but also consider your exceptions and error handling rules. If a supervisor is needed to handle an exception in your current process, then that needs to be mapped as part of your flowchart. This can help to identify potential bottlenecks.
I think you should have the point by now - map out everything - details matter.
Identify Repetitive Processes
In your current process, the low-hanging fruit that you can most likely automate is going to be the multi-step processes that apply to a significant portion of your invoices. For example, it’s likely that a good chunk of your incoming invoices arrives via email. Here you might want to sort the ones with PDF attachments from the ones without. You might also want to sort these by department, type of product or service, and the like.
Next, you might want to filter these by the amount due. Those under a specific level may not require sign-offs, while those above that level may require gathering approvals as part of the invoice processing workflow.
We’re literally scratching the surface here, but if you do this process to completion, you will likely identify a multitude of repetitive tasks that would benefit from automation. Especially when we add artificial intelligence (AI) to the mix.
Apply Artificial Intelligence
Despite what Science Fiction may lead you to believe, artificial intelligence isn’t intended to be nefarious. What AI allows us to do is to train machines to further automate those repetitive and time-consuming tasks so that humans can do more meaningful work.
For example, as invoices are processed, sometimes the software has challenges reading the fonts or understanding an abbreviation. AI can be pre-trained to understand abbreviations or recognize a variety of fonts, but it can also “learn” as newly discovered items are encountered and processed. Map these to the “amount” field a few times, and the AI will then come to learn that “amt” and “qty” mean the same thing.
The right AI engine can also learn to automatically map data fields on incoming invoices. Should a vendor change the format of their invoices, or a new vendor come online, artificial intelligence can detect these changes and then map or remap invoice data automatically.
SaaS Security and Privacy
If you’re going to automate all of this, then you should also look at governance and permissions needs and capabilities. Not everyone needs to have access to invoices, so look for a solution that allows you to create and adjust granular permissions. If this is to be part of a larger document management system deployment, you may need to work with your IT department to ensure there won’t be any conflicts with other policies and procedures.
Security of stored documents is also a consideration. As many teams now include remote contributors, on-prem systems are no longer practical. A cloud-hosted, Secure SaaS solution allows for contributions from any location with a connection, but it also frees your IT team from the burden of supporting another system.
Automated Invoice Processing from AODocs
While you could cobble together a solution to automate some aspects of this, you will have better results if you look for an invoice solution that is designed to integrate with the office application suite and business systems that you’ve already invested in.
If your company has standardized on Google Workspace (formerly G Suite), AODocs is the only automated invoice processing software solution that’s tightly integrated with Google Drive and Workspace.
You can process invoices just by forwarding them to a specified email address. Once received, AODocs automatically processes the invoice, gathers approvals via workflow automation, escalates exceptions, sends alerts and reminders to relevant parties, and then makes the captured data available for other business systems.
Automated Invoice Processing from AODocs is built using Google’s DocAI technology. Once integrated with AODocs, the AI engine easily identifies letters and numbers regardless of variations in the fonts it encounters. It parses the content of an invoice, correctly identifying common invoicing terms and abbreviations, while it automatically maps or remaps invoice data to the appropriate fields.
When paper invoices are scanned, any stray ink marks, folds, or stains are ignored, ensuring accuracy no matter the initial form of the received invoice.
Processed invoices are securely stored in an organized centralized Google Drive repository instead of countless personal drives. This makes it easy to audit past expenditures or to quickly find a copy of a specific invoice.
As your organization grows the number and frequency of incoming invoices can soon become overwhelming. Conduct an internal audit to better understand and visualize your existing processes and look for areas where automation could be used to boost efficiency and accuracy. Finally, look for a secure SaaS solution that integrates with your business systems, as AODocs Automated Invoice Processing does for Google Workspace.
Topics: Invoice Processing