The way in which invoices are processed can make a major difference to both buyer and supplier. Read on to learn how to optimize your invoicing process.
The way in which invoices are processed can make a major difference to both buyer and supplier. All too often, the invoicing process is fraught with difficulty, from inefficient manual processes to the risk of human error. But with an effective electronic invoicing or invoice automation solution in place, companies can streamline this process and reduce the risks. Read on to learn how to optimize your invoicing process.
Invoice processing challenges
For suppliers, the invoicing process is often associated with challenges. For one thing, sending a paper invoice costs time and money, while invoices sent via email still run the risk of error and delay. Furthermore, if an invoice is lost or delayed, suppliers may have to spend precious time raising queries, or may even have to reissue that invoice.
Invoice processing also presents some challenges for the buyer. Getting a supplier’s invoice into the accounting or ERP system might sound like a simple task, but in practice, this tends to be inefficient and manually intensive. Suppliers may send their invoices using a range of different channels, from physical mail to PDF invoices sent by email, resulting in diverse operational challenges. And in many cases, manual data entry is used to get the necessary details into the buyer’s system – an exercise which is both time consuming and prone to error.
Optimize your invoicing process with einvoicing
Fortunately, these challenges can be overcome by adopting a suitable electronic invoicing (einvoicing) solution. The benefits of electronic invoicing are clear: invoices that are sent using a dedicated invoicing solution can be delivered directly into the buyer’s ERP system, reducing the risk of error or delay, and streamlining the process for both buyer and supplier.
Not all einvoicing solutions are alike, and different techniques will suit different companies. Taulia, for example, offers a range of invoice submission methods to suit every scenario, including:
- A portal that allows you to directly enter information or flip a purchase order into an invoice
- The ability to email a pdf or upload csvs and allow mapping and AI to parse the data
- For large invoice volumes, suppliers can use system-to-system data transfer
Whatever the chosen model, an effective einvoicing solution can make sure the supplier’s invoice is in the right place at the right time – thereby reducing risk and maximizing the efficiency of the invoicing process.
Implementing a new invoicing process
A new invoice program can bring numerous benefits, from cost reductions to time savings. But first, the chosen solution needs to be implemented effectively and consistently across your supplier base.
First and foremost, that means communicating the benefits of the new system to suppliers clearly. It’s also essential to keep suppliers informed about how the new program will work – and different companies may approach this in different ways. For example, you might communicate the message en masse to low volume suppliers, while speaking individually to high volume suppliers.
Whatever the chosen approach, it’s important to make sure suppliers understand the new invoicing process, what the timelines will be and who they should contact with any queries. Companies also need to have a clear policy in place to address any instances of non-compliance from suppliers, as well as agreeing any waivers to the policy in advance.
That said, introducing a new invoicing solution doesn’t have to be a time-consuming exercise. In April 2020, with businesses forced to close shared service centers due to the Covid-19 crisis, Taulia launched Rapid Start Invoicing, which can be implemented in only seven days. By enabling suppliers to start submitting invoices electronically, the solution has allowed businesses to continue processing invoices on time, despite the disruption caused by the pandemic.
Making use of invoice automation
Streamlining invoice processing doesn’t always involve changing suppliers’ behavior. For companies that continue to receive invoices via unstructured formats such as a PDF, another option is to adopt a solution that can capture invoice data and transfer it seamlessly into the buyer’s system.
In the past, it has been difficult to create a solution that can achieve this effectively. While traditional Optical Character Recognition (OCR) can go some way towards capturing invoice data automatically, OCR only tends to be successful if the right information is in exactly the right place in the invoice file – so in practice, manual intervention is often needed in order to correct any errors.
A more sophisticated approach announced by Taulia last year is Cognitive Invoicing, an AI-based solution developed by engineering teams from Taulia and Google, which combines Taulia’s intelligent platform with Google’s Document Understanding AI. The solution can parse invoices in any format, including both machine-generated and scanned image PDFs, and extract the necessary data. Meanwhile, a cloud-based resolution process has been created to address any situations where information may be missing from the file.
The bottom line
For companies looking to automate the capture of suppliers’ invoice data, there are a number of routes available. Whatever the chosen approach, a solution that automates the invoicing process can reduce the time taken to approve supplier invoices – and this, in turn, means that suppliers will have more time to take advantage of opportunities to access early payment on their invoices via a dynamic discounting or supply chain finance program.
For buyers, this can bring financial benefits. By offering a dynamic discounting solution to their suppliers, companies can gain attractive risk-free returns on their own excess cash – and the higher the level of supplier adoption, the greater the benefits of the program will be for both buyer and supplier.
By automating invoice processing, companies can therefore not only improve their relationships with suppliers, but also capture lost opportunities for early payment discounts. In some cases, the resulting savings can cover the costs of the invoice automation exercise – and even help turn accounts payable into a profit center.