Invoice Automation – imagine processing invoices as fast as you can snap your fingers.
Sounds pretty nice, doesn’t it? You would (practically) never have to manually process or manually hand-key information again. Eliminating the inefficiency of paper-based invoices and manual processing with an electronic invoice management system can increase control over the entire payables process. This is all done through proper workflow management, advanced capture capabilities, robots, and artificial intelligence (but more on this down below).
What is Invoice Automation?
Invoice automation is a hands-free process to direct and process incoming invoices, and it’s becoming a crucial part of ‘tomorrows’ ap teams. Tomorrows most innovative accounts payable teams are recognizing the largest ROI by implementing these new technologies (especially those with 5 or more team members).
In addition, invoice automation handles both physical paper invoices, as well as electronic invoices despite; however, they do have slightly different processes. For paper invoices, there is a bit more manual work because they have to be scanned in (which is one of the steps you should strive to eliminate). But, both use OCR (optical character recognition) to extract the data from the invoices (like supplier, invoice date, amount, dates, etc.).
Shameless plug, but we happen to offer an extremely advanced, capture software outfitted with artificial intelligence capabilities. This means, over time with the more invoices that are seen by the software your system continually comes ‘smarter’ about extracting that information. We call it ‘Forms Magic’ (and you should Check It Out Here)!
The benefits of Invoice Automation
1) Going Paperless
What’s worse than a paper invoice? Not being able to find it. We’ve all been there – you receive it on a Tuesday, place it in a very specific place on your desk, and when Wednesday afternoon comes around it’s lost from all the shuffling on your desk. Paper invoices are not only expensive to process from a manually inputting perspective but the time spent searching for information only adds frustration on top. With an invoice automation system, you’re able to go (practically) completely paperless.
In addition, chances are that more than over 30% of the invoices you receive are still paper-based (according to iPayables). While paper invoices may never go away completely, new strategies can save up to 62% of invoice processing costs by eliminating all the paper in your process. And there are other benefits as well.
2) Kicking off workflows
Workflows are one of the most important parts of an invoice automation system. With workflows you’re able to route the correct invoice to the correct correspondent, depending on the level of seniority or account managers. The best aspect as that this is completely customizable to each organization, so you can set up what works best for you and your team. Workflow (our software offering) is included with an invoice automation system, and we also have a fantastic onboarding process to set you up for success and not need to depend on an external team. Workflows can be as easy or as advanced as you’d like to set them up so if you’d like to start easy and work towards continual improvement that’s no problem.
With an invoice automation system, it becomes really easy to keep your entire team informed on the status of each invoice. Although sometimes account managers handle specific invoices, senior-level execs gain the advantage of staying on top of their department. In addition, when you partner your invoice automation system with a document management system, you’re able to share information effortlessly, and also track who and when those invoices were accessed. Transparency helps speed communication and openness across teams, allowing you to focus on more important tasks rather than continually explaining the status on certain invoices.
4) Early Payment Discounts and Discrepancies
We probably don’t need to explain what these are to you, but they are still real, bottom-line benefits when Invoice automation is put in place.
In addition, you’ll gain these benefits as well – all directly affecting cost saving and revenue generating activities:
- Duplicate Payments
- Late Fees
- Lost early payment discount captures
5) Working with Experts
Since this service is ‘on the upswing’ we’ve seen organizations benefit greatly from having a partner help you through this process. Setting up an invoice automation system can involve a lot of moving parts, and they can help you get comfortable using and setting up some of the different technological pieces. And, as a bonus, they have experience doing this in other organizations and can help you bypass some of the entry-level ‘learning mistakes.’ From a pricing perspective for something like this, some organizations will charge you a consulting fee. However, we here at Imagetek don’t believe in charging companies extra for helping you get set up for success. If that sounds interesting to you, you can get in contact with us here.
6) These all result in – SIGNIFICANT cost savings
Obviously, when you’re marrying technology with more efficient processes there are cost savings from a lot of different avenues. From saving money on not using as much paper, all the way to getting extra money from your suppliers,
The different components of Invoice Automation
Scanning is the process of taking physical papers (such as invoices) and turning it into a digital format – usually into a picture of some sort. However, the second part of the scanning process is a bit more important, but that’s covered in the next session. This phase involves both hardware and software: 1) a physical scanner (such as a Panasonic scanner) and Capture software.
You can also use a batch scanner. Batch scanners are designed for large volumes of paper documents – and in this case invoices. If you are processing more than 20 invoices at a time, a batch scanner saves a considerable amount of time and effort throughout the lifetime of the hardware. Saving a few minutes every day over the span adds up to some serious productivity boosting – not to mention less time sitting at the scanner. Our flagship Capture software also has great both batch and regular scanning capabilities as well.
Once the physical document is scanned into the computer, and it is turned into an image, you can begin to enter in the metadata. Metadata helps make these images searchable in the future, so that when you’re searching for an invoice that you prococessed six months ago you’re able to locate it with ease. This is another huge incentive to finally ditch those filing cabinets too.
With metadata, you’re able to pick out things like company name, invoice numbers, who it’s from, the amounts, dates, etc. Pretty much anything that is on the invoice is able to be entered into their corresponding fields.
Above you can see an example of how we extract the invoice data. Traditionally, this is done with hand-keying the information into an accounts payable system or updating an account.
Above, you can see that metadata getting pulled off and Forms Magic assigning it ‘confidence intervals’ – which means that’s how accurate it believes that the data entered into your system matches what’s actually on the page.
However, new technologies have deloped that eliminates both of these steps – which has what Imagetek has been working diligently to offer and provide. Our more advanced systems utilize artificial intelligence to not only extract the data from invoices but to also key in that metadata on your behalf.
But it doesn’t stop there.
It then takes that information and enters it into your accounts payable system for you.
Imagine having an electronic invoice getting sent to you, it gets automatically routed to your AP system, and then all you have to do is approve the data entry the software provided for you.
Pretty amazing stuff. If you’re interested in learning more, you can check it out here.
The new way of processing invoices
Here is a (somewhat) typical workflow of an invoice automation system.
- Suppliers send you invoices through multiple channels – whether that’s paper or electronic
- While this is optional, we do have an on-site digital mailroom processing center. Essentially, all of your mail is forwarded to us, and we process it and put it in a secure system for you. Check it out here – it’s an absolute steal.
- After we process it in our system, we put our robots to work. Here they take that metadata (as mentioned above) and enter it into your accounts payable system. This is completely autonomous and requires no extra work from you at all. Even better, this happens all within SECONDS – meaning information is fed and distributed incredibly fast across your team
- Next, Workflow takes over. Here you can input exception routing and review capabilities to ensure the right people are getting the right information at the right time
- And lastly, receive your information! Have the freedom to access it in real-time, from anywhere in the world, on any device (even a beach in Maui)
Things to remember when implementing an Invoice Automation system
- There are other providers of invoice automation systems, but it’s important to understand if they can offer the entire ecosystem. This way you won’t have to cobble different software‘s together as this creates a layer of technical challenges (or incompatibilities) and inefficiencies.
- Every system is different, but the theory should remain consistent. We’ve kept things simple by explaining this concept with how it works with our products. We did this to keep things simple since we’re not 100% confident how other systems work. And, as a shameless plug, we’d love to have you as a customer too so we might sell ourselves a little. 🙂
- How does the pricing work? Is it a system you buy once our right and then maintain yourself? Or is it a SaaS setup? Our software is a SaaS offering – or better known as software as a service. This makes it so you don’t have to buy or download any software (besides Capture) to any of computers, and can instead access your information and invoices on any computer, and you’ll always have access to our support team.
- Imagetek’s system is ERP-Agnostic – meaning it works and it integrates with other systems and document management systems.
Integrations into an invoice automation system
- Any ERP System
Invoice Automation use case
MSI Mold Builders recognizes MASSIVE gains!!
As a state-of-the-art injection mold producer, MSI Mold Builders wanted to digitize their AP processes and cut down on processing time for over 1,200 invoices received monthly. Using a suite of Digitech’s products, they’ve increased efficiency, saved money, and gained control!
- Invoices take only 15 minutes to process instead of over an hour, saving more than 10,000 hours of productivity annually
- 100% of documents are now protected from disaster
- Now saves more than $40 per invoice processed, a total cost savings of $676,000 per year
- Implementation and training for nine people were completed in just a week.
“Network and Computer Systems Manager” Forms Magic has revolutionized our AP processes! We’ve been able to cut our invoice processing time by over 75%. We’re saving the organization money and improving relationships with our business partners. We love Forms Magic!“
-Jason Sojka, Network and Computer Systems Manager