Did you know that supplier invoice processing is one of the most tedious and time-consuming tasks for any business that deals with vendors or suppliers? It involves receiving, verifying, approving and paying invoices for the goods or services purchased from external sources. Manual invoice processing can be prone to errors, delays, fraud and inefficiencies, which can affect the cash flow, profitability and reputation of the business.

However, there is a better way to handle supplier invoices: automation. Invoice automation is the use of software to streamline and optimize the end-to-end process of invoice management and payment. By automating supplier invoice processing, businesses can reap many benefits, such as:

–       Reduced processing time: Invoice automation can significantly reduce the time it takes to process an invoice from receipt to payment. According to a survey by Beanworks, automated invoice processing can save businesses 35,000 euros per year by reducing the average processing time from 25 days to 5 days.

–       Lower cost per invoice: Invoice automation can also lower the cost per invoice by eliminating manual labor, paper, postage and storage expenses. According to NetSuite, invoice automation can save businesses up to 80% of the cost of manual processing.

–       Better visibility of invoices: Invoice automation can provide real-time visibility of the status and details of each invoice, as well as historical data and analytics. This can help businesses monitor their cash flow, track their spending, identify trends and anomalies, and make informed decisions.

–       Ease of sticking to compliance norms: Invoice automation can help businesses comply with various regulations and standards, such as tax laws, accounting rules, audit requirements and contractual obligations. By automating invoice processing, businesses can ensure accuracy, consistency and transparency of their records and transactions.

–       No scope of manual or human error: Invoice automation can eliminate the risk of human error and manual mistakes that can lead to inaccuracies, discrepancies, duplicates and fraud. By automating invoice processing, businesses can ensure data quality, integrity and security.

–       Enhanced supplier relations: Invoice automation can improve the relationship between businesses and their suppliers by ensuring timely and accurate payments, reducing disputes and errors, and providing clear communication and feedback. By automating invoice processing, businesses can increase their supplier satisfaction and loyalty.

How to Automate Supplier Invoice Processing

To automate supplier invoice processing, businesses need to implement an invoice automation system that can handle the entire workflow from receipt to payment. An invoice automation system consists of four main components:

–       Invoice capture: This is the process of receiving invoices from suppliers in various formats (such as paper, email or electronic data interchange) and extracting relevant information (such as purchase order number, amount, date and vendor details) using optical character recognition (OCR) or artificial intelligence (AI) technologies.

–       Invoice validation: This is the process of verifying the accuracy and completeness of the invoice information against predefined rules and criteria (such as purchase order matching, duplicate detection, tax calculation and approval limits).

–       Invoice approval: This is the process of routing the invoices to the appropriate approvers (such as managers or department heads) based on predefined workflows and policies (such as approval hierarchy, thresholds and exceptions). The approvers can review, approve or reject the invoices using online portals or mobile applications.

–       Invoice payment: This is the process of issuing payments to the suppliers using various methods (such as electronic funds transfer, credit card or check) based on predefined schedules and terms (such as due date, discount rate and currency).

Benefits of Automating Supplier Invoice Processing

By automating supplier invoice processing using an invoice automation system, businesses can enjoy many benefits that can improve their operations, performance and profitability. Some of these benefits are:

–       Improved efficiency: By automating supplier invoice processing, businesses can reduce manual work, speed up processing time, eliminate errors and delays, and optimize resources.

–       Reduced costs: By automating supplier invoice processing, businesses can save money on labor, paper, postage and storage costs, as well as avoid late fees, penalties and interest charges.

–       Better cash flow management: By automating supplier invoice processing, businesses can gain better visibility and control over their cash flow by tracking their spending, forecasting their needs and managing their liquidity.

–       Increased profitability: By automating supplier invoice processing, businesses can increase their profitability by taking advantage of early payment discounts, reducing fraud and waste, and enhancing their supplier relations.

–       Higher customer satisfaction: By automating supplier invoice processing, businesses can improve their customer satisfaction by delivering quality products and services on time, meeting their expectations and resolving their issues.

Supplier invoice processing is a critical but challenging task for any business that deals with vendors or suppliers. Manual invoice processing can be costly, time-consuming, error-prone and inefficient, which can affect the business’s cash flow, profitability and reputation. However, by automating supplier invoice processing using an invoice automation system, businesses can streamline and optimize their invoice management and payment process, and enjoy many benefits, such as improved efficiency, reduced costs, better cash flow management, increased profitability and higher customer satisfaction. Invoice automation is not only a smart choice, but a necessary one for any business that wants to stay competitive and successful in today’s market.