Envision the time you could save if your accounts payable (a/p) took care of themselves. In a completely automated accounting process, the invoices could be automatically read, verified, cross-checked, and quietly into the system in the background when a report has been entered without mistake. Wouldn’t that be efficient and cost-savvy?
Automating the accounting for your records payable can expand the division’s – and organization’s – proficiency many times, not least because the system does the legwork for yourself and discreetly enters and categorizes invoices with no human intercession. The more you’ve digitalized your accounts payable, the more you can automate the accounting. Moreover, paper-based invoices or non-organized receipt data (for example, pdf) can be digitized with the goal that these exchanges can be streamed into an automated bookkeeping system.
Read more about the solution available to speed up the administrator of entering and handling your invoice system.
As it is clear, the more you automate your transactions, the more cost you save. The accounts payable department would have to work only on invoices that the system shows are wrongfully entered or missing information. Be that as it may, in Germany, under 25% of invoices are completely automated into the system. On the off chance that you consider that it costs a Germany-based organization a normal of €4.50 to enter, sort, and endorse a receipt physically, you can see the immense costs saving that automated bookkeeping accounting can offer an organization.
Increase Cost Saving with Automated Accounts Payable Invoice Solutions
After an invoice is sent to a company, it goes through 5 steps. They are as follows
- Authenticate (might need further explanation)
What about supplier’s invoice- Accounts Payable?
When a supplier receives the invoice, the first step is to file it digitally. The process should be able to manage multiple ranges of invoices, from digital to paper-based invoices, which need to be scanned, and entered into the system. Many of these invoices might be in the correct structure, machine-readable, and some might be unstructured. Unstructured data needs to be processed further. It would help if you essentially had a multiple-channel solution that supports all the different ways you receive remittance advice, such as;
- Paper-based invoices
- Pdf-file invoices
- Documents via dedicated portals
- A hybrid form of invoices
- EDI Invoices
How do Organizations like to Receive Invoices?
According to a recent survey, several German companies were asked about their preference for receiving invoices from their suppliers. The majority of the participants responded that they would prefer e-invoices.
How are Organizations currently receiving their invoices?
Currently, most companies mainly receive invoices in an unstructured manner, i.e., probably 40% paper-based, and 44% are pdf file based sent via mails. On the contrary, structured billing patterns are rarely used. Only 2% of invoices are generated via the portal, 13% e-invoices, and B2B networks just 2%.
Entering your Payables
Invoices need to be presented in a structured form. Entering these received invoices into the bookkeeping system takes a lot more than we can imagine. From a bookkeeper’s point of view, invoices need to be categorized into purchase invoices, final invoices, billing, correction billings, partial order billings, and as such. From a technical perspective, we need to differentiate between;
- Unstructured- Paper-based and File-based invoices
- Structured- EDI and Hybrid Invoices
Modern technology enables you to digitalize unstructured invoices so that everything is automated easily. Data can be extracted from invoice images at an impressive speed and quality. Employing OCR technology will not provide you with a very significant rise in efficiency in your account records but will still bring an improvement of 30-40%
Invoices in hybrid form or visual representations can be automatically captured and entered into a system.
All invoices, whether structured or unstructured, are entered into a unified, electronic ledger. It lets you keep track of processed documents, where they are stored, and all the other details. The following steps are included in verifying the documents;
- A thorough check that the invoice is as per the laws/standards.
- Automated cross-check
- Vendor data
- Order details, i.e., date, day
- Warehouse records
Purchase Order Invoice
Generally speaking, there is almost no data previously saved in your ERP system for a receipt that doesn’t identify with a buyer’s invoice. You have purchase details already in your system that you can use to authenticate details, such as order quantity and prices. In accounting terms, it is called 3-way matching. This data enables you to categorize the invoices based on different types, such as who placed the order, received it, pricing order, cost per unit, and others. This 3-way matching can also be done by matching the system with the information in the warehouse records.
If there is no formal tax or legal errors and all the details match, the invoice is automatically entered into the system. Nobody needs to intervene to get approval or verify any details, and the system does the work quickly, smartly, and automatically.
However, an invoice without a purchase order can also be entered automatically with the following techniques;
- Use heavy data and account allocation details to automatically categorized
- Set an account allocation template for repetitive daily tasks.
- Use the information in documenting to allocate the invoice correctly.
- Use machine learnings to make the process error-free.
Spots Checks and Expectations
Spot checks and special case
An automated accounting system can be set up to lead on-the-spot checks during transaction processes. This is in addition to any manual checks you might do. The number of spot checks or test sizes can be set independently for every customer. It is additionally conceivable to set standards to not consequently deal with specific automated invoices. These might include:
- Surpassing a certain, predefined value
- Coming from a specific provider
- Starting from a nation considered risky
Basically, you can set up exemptions for any invoice measures you need for your business.
Ideally, your purchase-to-pay process will be set up to run on an ERP system from the beginning. The order approval process should be set out clearly and logically, including any cut-off points or vital checks. This empowers the whole process, from submitting a request for invoice approval check and explanation to taking place on a unified system that is reported and effectively recognizable.
Besides, any means taken to explain the content are also recorded so anybody associated with the approval and payment process can perceive what’s happening.
Once the invoices are processed from the supplier’s side, they are archived with their existing documents and log not to be altered. Any invoice or documents which need to be achieved for a more extended period can be stored solely in digital form.
This saves paper and space yet additionally makes it fundamentally simpler to find specific records during a review or audit.
HubBroker has designed unique Integration apps for popular ERP and accounting systems that facilitate connectivity between business systems for real-time data exchange and automation of critical workflows. Connect with us today to know how HubBroker can help you transform time-consuming, manual processes into automated, efficient workflows and help make nearly every part of your business work better.