How to streamline accounts payable with invoice automation software

In finance, manual invoice processing presents one of the most admin-intensive tasks. It involves manual data entry, requires cross-referencing, and is prone to errors. Upon receiving paper and electronic invoices from multiple vendors across dispersed locations, organizations face time-consuming processes such as manual data capture, invoice matching, and handling duplicate entries. Consequently, maintaining efficiency and accuracy in accounts payable (AP) processes can be challenging.

Common challenges faced by finance teams, small and large include: 

• Time-consuming and labor-intensive processes: manual data entry and capture of each invoice, followed by physical routing for approvals, slows down the entire AP process. This drains valuable resources and impacts productivity.
• Prone to errors: human error is inevitable with manual data entry, leading to inaccuracies in invoice processing. These discrepancies can cause delays and necessitate corrective action.
• Lack of real-time visibility: traditional paper invoices and manual workflows make it difficult to gain real-time insights into the status of your AP process. This lack of visibility impacts the ability to monitor progress, identify bottlenecks, and optimize workflows.
• Approval bottlenecks: routing paper invoices for signatures or engaging in multi-level email approval threads can be slow and inefficient, resulting in payment delays to vendors.
• Delayed payments: impacts vendor relationships and can lead to late fees or penalties.

The impact of an inefficient AP process extends beyond wasted resources. It increases your risk of financial errors and fraud, hinders vendor relationships, and makes scaling operations difficult.

However, there is a solution. 

In this blog post, we'll explore the power of invoice automation software and how it can revolutionize your AP process, streamline workflows, boost efficiency, and unlock significant cost savings.

The power of AP invoice automation

The burden of manual invoice processing can indeed feel relentless. However, there's a powerful solution waiting to transform your accounts payable process: AP invoice automation software.

By streamlining the entire invoice processing workflow, this innovative technology eliminates the inefficiencies and frustrations associated with manual methods. 

Let's explore the advantages of AP invoice automation and how it can empower the accounts payable team, enhance the overall performance of the finance team, and ultimately generate efficiencies and savings for the company as a whole.

Maximize efficiency and control

AP invoice automation software tackles the time-consuming tasks that slow down your AP team. By automating key processes such as invoice intake, data extraction, data entry, invoice approval routing, and data synchronization to your financial system, it is possible to:

• Reduce processing time: eliminate manual data entry and streamline approval workflows, significantly accelerating invoice processing times.
• Free up resources: redirect your team's valuable time away from repetitive tasks and towards more strategic initiatives.
• Enhance control: streamline approval processes, manage exceptions efficiently, and enforce spending rules to ensure compliance.
  

Eliminate errors and ensure accuracy

Manual invoice capture frequently results in inaccuracies, but AP invoice automation software mitigates this risk entirely. 

In recent years, many companies automating accounts payable have turned to Optical Character Recognition (OCR) technology for invoice data capture. However, the next wave in invoice capture technology surpasses OCR and lies in Artificial Intelligence (AI) advancements. AI technology is revolutionizing invoice handling within finance departments, enhancing efficiency, accuracy, and overall productivity.

AI technology in invoice capture encompasses various advanced features:

• AI data extraction and review: AI can automatically structure, and accurately validate complex data extracted from electronic and handwritten invoice formats.

• Automated invoice classification or predictive coding: automatically classifies and codes invoices, GL accounts, and cost allocations.

• Unlimited scalability: AI has the capacity to process high volumes of pages and invoices.

Enable real-time visibility and improved decision-making

With traditional paper invoices and manual workflows, gaining real-time insights into your AP process can be a challenge. AP invoice automation software provides:

• Real-time dashboards: monitor the status of invoices at every stage, identify bottlenecks, analyze extraction accuracy, and identify opportunities for process improvement.
• Enhanced visibility: gain valuable insights into spending patterns, identify cost-saving opportunities, and make informed decisions. The software provides an overview of the AP cycle, simplifying the tracking of invoice statuses and identifying the relevant contacts in the event of process delays.
• Fraud prevention: Centralized and automated AP processes ensure transparent visibility and accountability, facilitating the detection of fraudulent activities.

The technology and features behind AP invoice automation

AP invoice automation software features are driven by powerful technology, engineered to streamline your invoice processing:

• Automated data extraction: this cutting-edge technology goes beyond traditional OCR. Powered by Artificial Intelligence (AI), it can extract key information (vendor, amount, currency, line-item level data) from a wider range of invoice formats, including multiple pages, handwritten text, and even poorly formatted documents.
• Machine learning: AP invoice automation utilizes machine learning to detect patterns and anomalies in large volumes of invoice data, enhancing accuracy improvement over time through learning from past processing experiences.
• Predictive coding: using machine learning anticipates and suggests GL coding categories for invoices based on historical data, streamlining the invoice categorization process.
• Workflow management: set up automated workflows to efficiently route invoices for approval based on predefined rules. This ensures invoices are processed by the right people and eliminates delays.
• Exception handling: AP invoice automation software automatically identifies invoice processing issues, leading to streamlined workflows, reduced manual intervention, and improved accuracy.
• Duplicate invoice detection: minimizes the risk of duplicate payments and reduces overpayment errors.
• Reporting and analytics: generate reports and gain valuable insights into your AP performance. Track metrics like processing times, error rates, and vendor payment terms to identify areas for improvement and optimize your AP processes.

Choosing the right AP invoice automation solution

The abundance of AP invoice automation solutions on the market can make selecting the ideal software a complex task. However, focusing on key factors ensures a solution is chosen that streamlines accounts payable and empowers teams.

This quick guide navigates the selection process:

1. Functionality: matching specific needs

The initial step involves identifying specific needs for AP invoice automation software. Here are some key functionalities to consider:

• Data extraction accuracy: ensure the solution offers high accuracy in extracting data from invoices, especially if vendors utilize diverse invoice formats. Look for solutions that leverage AI capabilities for reliable data capture.
• Integration capabilities: does the solution integrate seamlessly with existing accounting software or ERP systems? Streamlined integrations eliminate manual capture and data duplication, ensuring a smooth and accurate flow of information within financial processes.
• Workflow customization: can approval workflows be customized to align with a company's hierarchy and spending limits? Flexible workflow management ensures efficient invoice routing and timely approvals.

2. Scalability and flexibility: adapting to growth

As a business scales, its AP needs will evolve. Choose an AP invoice automation solution that can adapt alongside the organization. Look for a solution that offers:

• User-friendly interface: Prioritizing user experience ensures ease of use, especially as teams evolve. The software remains intuitive and accessible to new members, facilitating seamless onboarding.
• Scalable functionality: ensure the solution can accommodate an increasing volume of invoices, vendors, and users without compromising performance.
• Adaptable and accessible features: Cloud-based solutions offer users the flexibility to access the system from anywhere, at any time. This capability is particularly advantageous for businesses with remote teams or multiple locations, as it enables seamless collaboration and accessibility across dispersed work environments.

3. Security and compliance: protecting data

The security of financial data is paramount. When evaluating AP invoice automation solutions, prioritize options that offer:

• Robust security features: look for solutions with strong encryption protocols, user access controls, and undergo regular security audits, penetration tests and threat assessments to safeguard sensitive financial information.

4.  Ease of use and user adoption

A user-friendly interface is crucial for ensuring team adoption of the new AP invoice automation software. Here's what to consider:

• Intuitive interface: choose a solution with a user-friendly and intuitive interface that minimizes training time and simplifies adoption for the AP team.
• Support and resources: does the vendor or provider offer a knowledge base, tutorials, and ongoing support to ensure the team can effectively utilize the solution going forward?

5. Pricing models: finding the right fit for your budget

AP invoice automation solutions come with varying pricing structures. Consider the following factors when evaluating costs:

• Deployment method: cloud-based solutions typically offer a subscription model, while on-premise deployments require upfront licensing fees. Choose the model that best aligns with a company's budget and IT infrastructure.
• User count: The pricing may vary depending on the number of individuals from your organization who will utilize the software.
• Transaction volume: Some vendors determine pricing based on the volume of transactions or invoices processed within a specified timeframe. This model offers scalability, with the cost per invoice typically decreasing as the volume of invoices increases.

Remember: leverage free trials, videos, and demos offered by vendors throughout the search for the ideal AP invoice automation solution. This allows for firsthand experience with the software and assessment of its suitability for specific requirements. Visit third-party software comparison sites to see independent customer reviews and satisfaction ratings.

By carefully considering these factors, you can confidently choose an AP invoice automation solution that streamlines invoice processing, boosts efficiency and accuracy, and empowers your accounts payable team.

Why ​​Fraxion is a good choice for AP automation

Fraxion is a leading provider of procure-to-pay software, featuring AP invoice automation. The solution manages the entire purchase requisition to AP process, with advanced analytics, reporting, and integration capabilities.

The AI-powered software eliminates manual tasks, minimizes errors, and unlocks significant cost savings and efficiencies for companies across industries.

What sets Fraxion apart?

• All-in-one solution: Manage purchasing, expenses, accounts payable, and analyze spend in one comprehensive cloud procure-to-pay solution.
• User-friendly interface: Fraxion's intuitive design minimizes training time and disruptions, getting your team up and running quickly.
• Mobility: Fraxion offers a native mobile app for easy spend management on-the-go.
• Unmatched accuracy: Fraxion extracts data from single to multi-page electronic and handwritten invoices.
• Effortless integrations: seamlessly connect Fraxion to your ERP system, vendor catalogs, and messaging tools for a unified workflow, eliminating data silos.
• Robust security: robust security features and undergoes regular audits and assessments to manage access and protect financial data. 
• Dedicated customer support: Fraxion offers training, ongoing support, release notes and new feature training, and customers have access to a knowledge base to ensure that users maximize the value of the solution.

Optimize efficiency and accuracy in accounts payable

Transform your accounts payable workflow with Fraxion's AP automation feature. Say goodbye to manual invoice processing, and welcome enhanced efficiency, error reduction, and sustainable cost savings. 

Schedule a free consultation with a Fraxion product specialist to discuss your specific needs and discover how our innovative solution can transform your accounts payable process.