What is invoice management?
Invoice Management, or the accounts payable process, is a collective term for the entire process of handling a supplier invoice – from the receipt to accounting in the company’s ERP system and finally to the payment.
An automatic and digital workflow for your company’s invoice management can ensure efficient and accurate bookkeeping.
What does the invoice flow look like?
Company X sends an invoice to Company Y as they have purchased various products. Before Company Y can pay for the products, the invoice must go through three general steps:
- Scanning and data capture
- Integration to ERP/finance system
Scanning and data capture
The invoice contains a lot of different information’s (see list above) which must be used for further processing. The data needs to be lifted from the invoice and then forwarded into an invoice workflow.
The workflow is dealing with the more accounting specific matters like posting, distribution and approval of the supplier invoices. They must be assigned to the correct account in the chart of accounts and then rules for distribution and approval flow ought to be set up.
Integration to ERP/finance system
When the invoice data has been processed, entered/automated and approved, it is ready for bookkeeping. And it is therefore ready to be exported to the ERP/finance system. This can either be done through an automatic integration between the invoice management system and the financial system or through manual export and manual upload.
Manual or automatic?
The above process can be done manually or automatically. Posting, distribution and approval can all be done manually, but this is really time-consuming.
In an automatic invoice management workflow is scanning and data capture done with help from advanced and very accurate AI technology. The workflow will take care of enriching invoice data with an approval trail, as well as accounting and bookkeeping related information. This process will often be manageable through a mobile app. Finally, the processed data is delivered to an ERP or finance system through an automatic integration between the systems.
How to get started with automatic invoice management
It is not a problem to find a solution for automatic invoice management, since there are many really good solutions on the market. A good piece of advice is to think one step further. It makes sense to find an all-in-one solution that can handle all the other employee-related expenses your employees might have as well.
Want to know more?
Research from Institute of Finance Management unveils that a full time employee in the finance department can process 16 times the number of vendor invoices, if they are handled digitally compared to manual handling. Other research demonstrates that businesses, who automates their invoice management process, saves an average of 84 % of the cost related to this.
If you are interested in knowing more, you are always welcome to contact us.