In recent years, digital transformation has taken the business world by storm. However, some departments have been slower to catch up than others. Some accounts payable (AP) departments have struggled with manual, paper-based accounting processes that limit visibility and increase the risk of fraud. Despite the potential benefits of automating end-to-end invoice processing, many finance executives remain hesitant to embrace new technologies like automated invoice processing.

The reality is that manual invoice processing is time-consuming and costly. Without automation, there’s a risk of inaccurate processing, leading to repeated cycles and wasted time. Moving from paper to electronic invoices alone isn’t enough to achieve digital transformation in AP departments. Instead, automated invoice processing is necessary to improve the speed, usability, and performance of procure-to-pay processes.

If your organization still relies on older methods and overlooks critical aspects of business, it’s time to think about using newer technology. Automated invoice processing software can make a huge difference in the efficiency and accuracy of your AP processes.

What is automated invoice processing?

Automated invoice processing is a method of handling invoices using technology to reduce the need for manual data entry and processing. This involves using software that can scan and extract data from invoices, such as the vendor name, invoice number, date, and payment amount, and then automatically enter that data into your accounting system.

Automating your accounts payable can be a valuable tool for small businesses looking to streamline their accounting processes and improve their financial management. Many software providers offer end-to-end AP solutions tailored to your small business needs.

What are the benefits of invoice processing automation?

If you’re reading this, you are looking for ways to improve efficiency and stay ahead of the competition. One area where automation can make a big difference is in your invoice processing methods. By automating your AP, you can save time, reduce errors, and gain greater visibility into your financial processes. Here are some of the benefits of automated invoice processing:

  • Increased efficiency: On average, one invoice takes 3 to 6 weeks to get paid. Automation can reduce the time it takes to process invoices by 73%, freeing your team to focus on other tasks.
  • Reduced errors: Automated invoice processing is more accurate than manual processing, reducing the risk of errors.
  • Invoice due date management: By automating invoice processing, you can better manage due dates and keep more cash in your accounts for longer, improving your cash flow. 
  • Greater visibility: Automation provides real-time data and insights into your invoice processing, giving you a better understanding of your cash flow and financial position.
  • Enhanced security: Automated invoice processing can reduce the risk of fraud and improve data security.
  • Cost savings: In a recent Business Insider report, companies using digital AP platforms saw 81% lower processing costs.
  • Scalability: Automated invoice processing can grow with your business, accommodating an increasing volume of invoices and transactions.
  • Better vendor relationships: Automated invoice processing can help you build stronger relationships with your vendors by ensuring accurate and timely payments.

Overcoming AP challenges with automation

Automated invoice processing has many benefits, but some financial officers hesitate to transition to this new technology. A common concern is fear of the unknown or resistance to change. Some CFOs used to traditional paper-based processes may be reluctant to embrace digital and automated invoicing due to a lack of familiarity with the technology. Security concerns are a concern since financial officers worry that automated invoice processing could increase the risk of fraud.

Unfortunately, this reluctance to transition to automated invoice processing has repercussions. Without automated invoicing, companies may be slower to process invoices and make payments, which can strain vendor relationships and potentially result in missed early payment discounts. Manual invoicing processes can be error-prone, leading to costly mistakes and wasted time. An analog invoicing system significantly reduces visibility into AP operations and increases the risk of fraud.

Without automated reporting and dashboards, CFOs may struggle to gain real-time insights into their financial processes, making it harder to make informed decisions and identify potential issues.

Moving toward automated invoice processing

Financial leadership must set benchmarks to address these issues and improve your business’s invoice processing methods for the new fiscal year. Use the following steps to set your company up for successful AP automation.

1. Identify your pain points and set clear goals

Identify the challenges and inefficiencies in your current invoicing process and determine what specific goals you want to achieve with automation. These could include reducing errors, speeding up invoice processing times, or improving visibility into financial operations.

2. Research and select automation software

Look for a platform that aligns with your goals and needs. Make sure the software offers the features you need, such as automatic data capture, approval workflows, and reporting tools.

3. Plan for implementation

Before implementing the software, create a plan that outlines the steps required to transition to automation. This might include setting up the software, training employees, and establishing new procedures for invoicing and payment.

4. Customize the software to fit your needs

Work with the software provider to customize the system to fit your specific business needs. This could include configuring workflows, setting up approval hierarchies, and integrating the software with your existing accounting system.

5. Test the system and train your team

Conduct thorough testing to ensure everything works correctly before going live with the new system. Once testing is complete, train your team on using the new system effectively.

6. Go live with the new system

After thorough testing and training, you can officially go live with the new automated invoicing system. Monitor the system closely in the initial weeks to ensure everything is running smoothly and make any necessary adjustments.

7. Evaluate and refine the system

After it has been in place, evaluate its effectiveness and make any necessary refinements. Look for opportunities to optimize processes and further improve efficiency and accuracy.

Choosing the right AP automation software for your business

Selecting automated invoice processing software can be a daunting task, especially when there are so many options. Considering factors vital to you, such as transaction limits, budgeting features, invoicing capabilities, and app integrations, is essential when evaluating different solutions.

It’s smart to seek out a comprehensive business banking platform that offers a range of features designed to simplify financial management for small business owners, freelancers, and startups, including the ability to:

  • Create and send invoices
  • Create professional invoices with different templates
  • Easily track invoices from your computer or phone
  • Send automatic follow-ups
  • Make and receive unlimited transactions and payments via ACH or domestic wire transfers
  • No transaction limits or incurring additional fees
  • Budgeting and savings features to help you plan for future expenses

These and other features will help you manage your finances more efficiently and effectively, and can be a boon for businesses looking to streamline their financial operations.

Improve your bottom line with automated invoice processing

If you’re ready to streamline your invoicing process and take your financial management to the next level, North One’s automated invoicing software is a great place to start. With features that simplify your invoicing process, North One can help you save time, reduce errors, and increase efficiency. Get started today and see how automation will transform your invoicing methods.