8 Ways to Use Invoice Automation Software for an Efficient Billing Process
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Processing and managing invoices manually are time-consuming, susceptible to human errors, and more inclined to fraudulent activity. As per CFO.com, the five areas witnessing more internal fraud are sales and receivables processing, corporate credit cards, purchase-to-pay processes, payroll departments, and information systems departments. However, invoice automation software mitigates the risk of crime and helps businesses enhance payment processing efficiency, better allocate resources, and verify payments on time.
What is Automated Invoice Processing?
Automated invoice processing scans, extracts, matches, and validates relevant invoice data and feeds it to the accounts payable system. Invoice automation software streamlines billing processes, reducing the burden on finance and accounts payable teams. It automates cash flow, facilitates additional savings, and helps procurement organisations maximise dynamic discounting opportunities.
How to Use Invoice Automation Solution?
Businesses can get the most out of invoice automation software if they understand how to use it wisely and smartly. Here’s how:
1. Create a Checklist
Automated invoice software is easy to use but requires manually inputting vendor information. The accountants must ensure that the data they enter is accurate to make timely payments. It is good to create a checklist and ensure that the team is provided with its copy. Whilst entering the data of each supplier into the system, it is crucial to check that the following details are correct:
- Name of the vendor
- Supplier’s contact information, such as email address, website address, postal address, phone number, etc.
- Tax ID number of the vendor
- Names of the supplier’s representatives responsible for invoicing.
The more detailed information about each vendor is given, the more helpful it becomes during tax season. It also ensures each vendor is paid from a valid account. Changing a number whilst entering account details manually leads to financial issues, such as hindered financial management. Moreover, it damages vendor relationships. However, all these issues can be resolved by creating a checklist. Another tip is to brand every invoice, expanding brand awareness and adding credibility to your firm.
2. Verify Payments and Track any Changes
Another tip to best use invoice automation software is that it must be checked periodically for any discrepancies. Monitor every software action and promptly address all concerns or questions, as even a small mistake can result in financial loss. For instance, a specific supplier is categorised as providing an early payment discount. Whilst monitoring employees’ actions, it becomes clear the vendor is removed from the category of ”Early Payment”. It receives no early payment, leading to a rough loss of a 5% discount each month. Thus, authenticating payments is also crucial to mitigate the risk of double payments.
3. Create and Implement Automation Rules
Automation standards are linked to particular statuses, triggering a particular action to take place and simplifying invoice processing. Here’s a quick overview of a few of the most important automation rules that must be implemented such as:
- Delete Invoice Record: Usually applied when any invoice is entered incorrectly. Thus, a new bill will be created whenever any such incident happens.
- A Particular Activity to Take Place: A certain activity is performed when any specific action occurs. For insurance, the activity rule may automate sending an email to the worker who has to pay invoices once they are approaching the due date.
- Change Status: Used to change the status of the invoice to be paid as soon as the Accounts Payable (AP) automation software finalises the employee’s payment.
- Schedule a Call: Used to notify the relevant entity for scheduling a call with the particular vendor as their invoice becomes past due.
4. Use During Audits
Audits are burdensome, especially when there is a massive pile of paper invoices. However, automated invoice streamlines the audit process by facilitating the accounting professionals to run only on-demand reports. These reports could be used to prepare for an audit and detect any issues before it even begins. It is crucial to retrieve AP documents quickly via digital accesses and enjoy greater response times once the audit starts. Directly accessing bills using invoice automation software mitigates scrambling at the eleventh hour to find missing files. This all leads to less external and internal disruption, improving vendor relationships and workflows.
5. Streamline Accounts Payable (AP) and Accounts Receivable (AR)
Better management of AP and AR is the key to building strong relationships with suppliers and vendors. Manually monitoring every invoice, identifying how old the bill is, and checking payment status is frustrating at times. However, automated invoicing software keeps a bird’s eye view of each and every invoice in real time, helping businesses establish long-term customer relationships. Business owners can easily check where their money is going, enabling them to explore more money-saving opportunities. It even helps to identify early payment discounts and enhances cash flow.
6. Provide Mobile Access
One of the important tips is to invest in an invoice automation solution that provides mobile access. This will help the AP and AR departments process invoices on the go. Automating invoices means that bills are approved and paid even when the team is not in the office. Invoice processing through mobiles enhances productivity and helps build better vendor relationships as payments are made quickly.
7. Identify Vendors Preferring Automated Invoicing
Automated invoices are now replacing paper bills and spreadsheets due to the greater ease and satisfaction level that automation offers. It helps vendors access updates regarding invoice statuses via the cloud and ensures they are paid on time by sending out payment reminders. Automated invoicing provides a seamless experience for the payer across all suppliers and vendors. It’s crucial to check which vendor prefers automated invoice processing and to stick to their preferences.
8. Take Advantage of Wholesale
Buying in bulk from wholesale suppliers makes automated invoice processing even more beneficial. When dealing with wholesale transactions, the financial risks become more significant, particularly concerning payment conditions. However, the automated invoice software enables you to focus on nurturing supplier rea; relationships, reducing procurement costs and boosting profit margins. Rather than becoming frustrated by laborious administrative tasks, AI-powered invoicing streamlines the process of managing AP and AR whilst engaging with a vendor.
Benefits of Automated Invoice Processing
Automatic invoice generator helps eliminate traditional invoice processing and offers a business many benefits, including over an 80% reduction in a firm’s procure-to-pay cycle. Here are some additional benefits of automated invoice processing, such as:
- Minimises error rates as less manual data entry means little room for mistakes.
- Speeds up any approval process and lowers processing times.
- Helps save on labour costs, and staff can focus on more critical tasks of the company.
- Reduces the chances of duplicate bills and payments.
- Improves relationships, liberates employees from tedious tasks, and ensures vendors have a transparent process.
- Lowers the expense of conventionally processing invoices (paper, postage, etc.).
Automate Your Invoice System with RecordMe
Are you frustrated generating invoices manually on a daily basis? RecordMe, an AI-powered financial bot, is your go-to option. We help remove the burden of accountants by generating invoices in multiple formats and languages with an accuracy rate of 99.99%. What makes our invoice automation software stand out is its advanced validations to check anomalies, e.g. duplicate invoices or missing information. We ensure reduced operational costs by 80%, managing daily invoices leveraging AI and enhancing efficiencies.