Invoice processing is a business function that involves managing all incoming invoices from receipt to payment. This is mainly carried by the accounts payable department within a company. It refers to handling supplier invoice from receipt to payment. This whole process can be automated through the software application; thus, it is also called automated invoice processing.
What is invoice processing software?
Invoice processing software is designed to manage receipt processing sequence end-to-end. This software collects data from invoices and transfers it into the accounts payable system. With the help of this software, it is faster and more secured than the manual.
The invoice processing workflow:
The automated invoice process uses the software application to automatically performing actions in the payment lifecycle. It involves certain steps, from receiving an invoice to paying it. Let us discuss how AP automation solutions are enabling accounts payable departments to keep the current workflow and how AP technology is streamlining the invoice process:
- Receiving an invoice: this is the first step in which invoices are sent from suppliers or vendors to the buyer in different formats such as pdf, emails, or any other electronic form to facilitate faster communication. When these are received by the accounts payable department, they are scanned by advanced technology, and all details are entered into the accounts payable system. The company must verify whether the invoice details are accurate.
- Accuracy checks: as soon as the information is scanned, invoices can be checked against existing purchase orders and delivery receipts to ensure they are legitimate and accurate. In case of any discrepancy in the invoice, the process stops here until the issue is resolved.
- Invoice approval: before the introduction of AP automation invoice solution, the approval process suffered severe problems. This was because of the paper invoices, which got misplaced. The main benefit of using invoicing software is that any number of invoice copies can be easily generated. Once the invoice is approved, the only task is to send it for approval before releasing payment. This is simplified using invoicing software which reduces the approval time to a few minutes.
- Payment of invoice: Once the invoice is logged and approved, the process moves to the next stage, processing the appropriate payment to the supplier. The payment will be made as per the terms agreed, and within specific dates, an invoice will be cleared. With the help of digital banking, payments can be made in a matter of a few minutes.
An established invoice processing workflow will make the accounts payable department work efficiently. This will help in gathering accurate information on accounts payable, producing a correct balance sheet.
Benefits of Automated Invoice Processing:
Automated invoice processing software is mainly used by the accounts payable department for streamlining billing procedure, having more control over internal processing functions with a tracking facility, and this also improves the speed at which vendor invoices are processed. An automated invoice processing system help team automate the capture, coding, and sending of a bill for approval, in addition to assigning approvers and further pushing the invoices into the financial system for payment.
Hermes is one of the best-automated invoice processing software which provides better financial health to your business. This is designed to streamline the accounts payable process and deal with large backlogs and losses. This software improves performance and removes the possibility of manual errors with the help of cutting-edge technologies.