The average cost to process 1 single invoice is $22.75. Manually processing invoices costs time, money, and labor and does not come without its challenges. At the end of the day, you want to reduce labor expenditures and optimize your business in a more productive manner.
The global market is forecast to encompass 550 billion invoices annually and is expected to quadruple in size by 2035.
What if you could automate your invoice processing saving you money and resources? Leveraging emerging technologies such as artificial intelligence, PDF parsing, and optical character recognition will make sure that your business benefits from better data accuracy and cost savings.
Challenges of manual invoice data entry
In simple terms, invoice processing means entering invoice details into a system. Suppliers' invoices come in all shapes and forms, making invoice data entry difficult. The effort to input an invoice in an accounting software can take up more than a couple of minutes.
According to Business Insider, analog accounts payable processes can take 30 to 90 days.
Manually processing a high volume of invoices leads to more human errors as well. For example, your employees might not spot line item errors or typos the first time they are processing an invoice. It’s only after that they’ve realized that the purchase order does not match the invoice, that the error will be discovered.
Moreover, mistakes and processing quality issues will happen when hand-keying invoices. Quality issues are solved by implementing spot checks (checks on a random pool of invoices). But that, of course, also costs time and effort.
Risk of fraud
Accounts payable departments are more susceptible to internal and external fraud. Your staff might not be able to detect fraud quickly if they are processing hundreds of invoices on a daily basis.
Payment delays and duplicate payments
Another common data entry error which can occur is double payment. Payment delays happen especially during peak season such as Black Friday or Christmas, as manual data entry is time consuming and if you want to get things quicker, you’ll have to hire more staffs resulting in more business costs.
39% of businesses report that duplicate payments and over payments represent more than 1 % of their payments
AP automation saves you a lot of your company's time while also improving processing quality and reliability. An automated workflow updates your systems in real-time and reduces spot checks to the minimum. Let your collaborators focus on your company's core business instead of spending time doing manual processing!
What is automated invoice processing?
In simple terms, automated invoice processing allows businesses to process invoices with zero human intervention. Incorporating invoice software into your business processes will automate mundane tasks.
Benefits of invoice automation
More firms are turning to automated accounts payable software so that they can cut down on costs and improve business efficiency in the long run. Here are just some of the ways it can help:
Automating invoicing means that you don't have to manually enter data into multiple systems or spend hours chasing down customers for their payment details. You can also design your invoices to include all the information you need in one place, so you don't have to go searching through multiple documents for details.
Time and cost savings
By automating invoicing, you can reduce the amount of time and money spent on processing payments and chasing down overdue invoices - allowing you to focus on other important tasks in your business. This could include increasing sales by offering new products or services or reducing costs by outsourcing certain aspects of your business.
A benchmark made at Parseur in September 2022, concluded that on average a customer of Parseur invoice processing tool saves about 142 hours of manual data entry and about $5417 every month.
—Parseur statistics, September 2022
Improved customer service and retention rates
Customers value good customer service and are more likely to use companies they trust and feel comfortable dealing with - which is why automated invoicing helps provide better support for them throughout the entire payment process.
How to automate invoice processing?
Invoice data capture can be automated in 3 ways:
- Gathering and scanning the PDF invoices
- Extracting data from the invoices as per specific requirements
- Sending the invoice data to an ERP or another accounting software
Parseur: The best invoice automation tool
Parseur is an invoice extractor that has an OCR engine integrated. Use the PDF parsing tool to extract data from invoices received as emails, PDFs, CSVs or other text-based attachments.
What Parseur does best as an invoice OCR?
- Parseur is template-based which means that compared to other invoice processing tools, it does not require any coding knowledge. Our easy-to-use template editor adapts to all types of documents. It allows you to select the pieces of text you want to extract with a simple point & click interface.
- Parseur has a built-in library of templates for specific industries. In this case, Parseur does have an invoice template whereby data is extracted automatically.
- The PDF parser uses Zonal OCR and Dynamic OCR to capture all the data from the invoices.
- It can easily extract data from tables irrespective of the number of items in an invoice which is a must-have when processing invoice line items.
What data fields to capture in an invoice?
Fields to capture will depend on your type of business and the local legislation.
The following fields are usually common on an invoice and you will want to capture them most of the times:
- Invoice date
- Invoice number (usually a unique sequential number identifying the invoice)
- Supplier name
- Supplier address
- Customer name
- Customer address
- Line items containing a description and quantity of goods (or services rendered)
- Price excluding Tax
- Tax rate applied
- Tax amount
- Total price (including Tax)
The following fields are usually optional and you may or may not be required for your invoice processing:
- Invoice due date
- Supplier Tax identification number
- Customer Tax identification number
- Unit price of goods and services
- Shipping address
- Purchase order number (PO number)
- Any other required legal mention;. Terms and Conditions, reference to applicable legislation, legal mentions related to type of invoice (Reverse charge, Margin Scheme, Self Billing etc.)
How to create your own invoice automation tool?
Parseur is free to start with all the features available.
An invoice processing workflow with Parseur has the following steps:
The invoice is sent to the invoice automation software
This can be done by forwarding the invoice to your Parseur mailbox or uploading invoices directly to the Parseur app.
Data is extracted from the invoice automatically
If you need specific data to be parsed, then you can make use of Zonal and dynamic OCR to highlight only the data that you need.
Verify the parsed results from the invoice data
What's more, you can create as many templates as you need, Parseur will always pick the best one. So, you can forward all your invoices to a single mailbox and let Parseur process consolidate and consolidate your invoices data in one repository.
Export your parsed invoice data
Now you have your mailbox up and running, you can send your data extracted from your documents wherever you want it to be:
Automating AP invoice processing
Integrating an invoice processing software will not only improve your business processes but improve both suppliers and customers’ relationships. Automating invoice processes will provide you with faster data extraction, access to real time and scalability.