With the number of invoices a business receives throughout any given week, manually keying invoice data into a back-office system is a guaranteed way to create more headaches and fall behind on accounts payable (AP) processes. Digitizing invoices is a much faster and more accurate way of ensuring all invoices are accounted for and that all invoice data is standardized across all vendors, making general ledger (GL) coding, payments, and reconciliation that much easier.
Invoice digitization is a staple in most modern AP automation solutions. With invoice automation, businesses can see up to 50% cost reduction and process invoices three times faster than manual methods.
How Invoice Digitization Works
Capture Invoice Details
Capturing invoice details can occur in multiple ways depending on the invoice processing system used. When you upload an invoice into an invoice processing system, there are typically three options available to capture the data:
- Photo Library (your selection of available photos on a device)
- Take Photo (take a photo of the invoice for immediate upload)
- Choose Files (select from previously stored invoice files)
After uploading, optical character recognition (OCR) and machine learning technology automatically extract key information like invoice number, date, amounts, and vendor details. In other words, OCR essentially lifts the ink off the physical invoice copy and digitizes it for processing.
Data Standardization
Now that the invoice data has been digitally captured, it needs to be standardized so that all the data is consistent across all invoices. Imagine you have four different vendors that deliver one type of product. That product can be labeled four different ways across each vendor. Data standardization transforms this data into a consistent format. There are AP automation solutions, like Fintech, that understand the importance of standardization as a critical step to ensure data quality and accuracy and set you up for further automation possibilities by way of integration.
Back-Office System Integration
Once all the invoice data is captured, extracted, and standardized, the next step is to receive this clean data into your accounting or back-office system electronically.
At this stage of the process, what started as a paper invoice is now converted into a digital format by the AP solution, enabling it to be electronically received by your system in the format you require. This automated workflow provides a drastic reduction in manual processes while also increasing speed to data realization, allowing businesses to achieve faster reconciliation to better protect margins and save on operational costs.
Improve Business Performance with Paperless Invoicing
Invoice digitization is an important step for businesses considering AP automation. If you are looking for faster access to standardized data, simplified reconciliation, and accelerated payment cycles across your vendors, electronic invoicing is the right direction. You can save on unnecessary labor and process more invoices in a shorter period than you would with manual invoice processes.
Fintech offers automated invoice digitization and processing through PaymentSource® Premium. With Premium, businesses can consolidate all their invoicing needs into one convenient system across all vendors. Contact us to learn more about how PaymentSource can revolutionize the way you handle your AP.
