According to the recent studies, a cost of a single invoice is between 8$ and 40$ due to excessive manual processing and input errors. The very same study confirms that applying automated invoice processing can reduce this cost up to 80% and be a very important part in the companies back office end-to-end process automation strategy.
Invoice Processing Automation, Here’s How to Do it
Modern ERP’s are efficient when it comes to invoice transactions provided that the information is correct. There quite a few steps that need to be taken to post an invoice and in most cases those are error-prone and labor-intensive tasks. As a bonus automated invoice processing not only provides labor savings but also allows monitoring of the current payment status.
Opportunities to improve Invoice Processing
- Cost – 8$ per invoice
- Processing time – 5 days to process an invoice
- Manual input error rate – Average error rate is 5%
- Duplicates and fraud – 30% of companies have this problem
- Control – Payments are made without invoices
How it works:
Automated invoice processing is built upon the current ERP system you’ve invested in. We can divide it into 5 stages:
- Data Capture
- Data Validation
- Automated Invoice Reconciliation
- Information access
The self-learning technology recognises structured and unstructured information from any digital sources including but not limited to PDF, Excel sheets, emails. The recognised information is then automatically matched and checked against the PO’s, master data or goods receipts in any ERP system. The validation stage will be described further in the article. Invoices that are completely matched are automatically posted without manual interactions. If there are issues found in Purchase Order based invoices they are automatically forwarded to the AP department for discrepancy handling. After the approval, they are automatically posted. Status of the processed invoice can be automatically sent to vendor portals or can be emailed or notified via messenger platforms.
Invoice Exceptions Management
Exceptions are the main reasons for high operating cost and late payments and as a result – unsatisfied customers. Checking and removing invoices from ERP’s is based on pre-defined set of rules. Those may range from insufficient funds, difference in prices and quantities, unmatched purchase orders or wrong vendor data. Intelligent Robotic Process Automation Software can be used to learn the exception patterns and transfer the exceptions to the employees with the right set of skills and access. Companies can then educated their suppliers about the mismatched for better streamlining of the invoice data.
More than saved money:
Invoice processing automation is more than saving your companies money. The adoption of Cudato’s Robotic Process Automation technology has a very broad impact. Other major gains include Increased capacity (a reduced processing time by 60% was noticed by our BPO client) and reliability (since invoice processing is rule-based and repetitive and in most cases doesn’t require analysis, the accuracy levels reach up to 100%) and as a result – an improved customer service level. However, the most important value RPA brings is freeing your staff from doing the manual work such as invoice reconciliation and letting them focus on creating and exploring new ideas.
- Incoming invoices are posted automatically
- Status is constantly monitored
- Audit trails are left to ensure compliance
- Data is validated automatically against other ERP data (Master data, GRN, PO)
- No more late fees
- No more incorrect payments
- Reduced processing time