5 Simple Steps to Implement Paperless Invoicing (+ Expert Tips)

Steps to Implement Paperless Invoicing

Paperless invoicing is just one of the many benefits of accounts payable automation, which is revolutionizing how businesses process and manage their payments. It allows you to automate tasks like capturing the data on invoices and completing three-way matching, making the whole process less time and labor-intensive. Your team no longer has to manually enter, code, and match each invoice, saving them countless hours. Paperless invoicing increases speed, efficiency, and cash flow visibility—and implementing it is easier than you might think.

How to Implement a Paperless Invoice Process

Proper planning is key to successfully implementing paperless invoicing and optimizing accounts payable. Follow these simple steps for the best results.

1. Set Specific, Yet Achievable Goals

First, figure out what you want to achieve by implementing a paperless invoice process. Are you hoping to reduce processing time and costs per invoice? Lower the time to approval? Take advantage of discounts? Or maybe you want to eliminate duplicate payments, late payments, or fraud.

Whatever your goals may be, make sure they’re achievable and measurable. Use key performance indicators (KPIs) to monitor progress toward them. For example, some popular AP process KPIs are days payable outstanding (DPO), percentage of supplier discounts captured, and average approval time. You should reassess these KPIs regularly to make sure you’re on track to reach your goals.

2. Define Clear Expectations & Standardize Workflows

It’s important to communicate how this change will affect your team. Many employees fear that automation will lead to job loss and are likely to resist or criticize it. To avoid confusion, clearly define the AP team members’ roles. What will be expected of them moving forward?

After defining expectations, create a standardized workflow. Be sure to include steps for the AP team’s involvement in document capture, approvals, the three-way matching process, general ledger coding, and payment distributions. If your paperless invoicing software includes a self-service supplier portal, you should also develop and communicate a standard workflow for supplier onboarding and management.

3. Capture, Code, Match, & Verify Existing Data

You’ll need to digitize your existing AP data during the implementation process. Paper invoices, order receipts, and purchase orders should be scanned to PDF files and uploaded into your AP software. The software should include optical character recognition (OCR) to extract data from the uploaded invoices.

Once the software has read the invoices, you’ll need to code them to the right general ledger accounts. You can do this manually for each invoice, or set up the software to recognize GL codes to save time. Then, allow the system to automatically match each invoice to a purchase order and/or order receipt to verify that it’s accurate and ready for payment.

4. Adopt Automated Solutions for AP Processing & Payment

It’s nearly impossible to go paperless without using automated solutions to process and pay invoices. Automation allows you to streamline your AP process and can help you achieve the goals you set in Step 1. The software uses tools like OCR and AI to improve factors like invoice processing time, cost, and time to approval. It can also alert you to duplicate invoices and late payments.

Some automated software solutions include dashboards with insights into various AP activities and KPIs, like the cost of processing an invoice, invoice exception rate, or invoice processing time. These dashboards can also help you to identify bottlenecks so that you can make the process more efficient.

5. Develop a Seamless Implementation Timeline

You probably won’t be able to implement a paperless AP process in one day. It takes time to decide on the right software, set it up for your business, define roles and workflows, upload existing data, and onboard suppliers.

To keep things moving smoothly, develop an implementation timeline that divides the various tasks into stages:

  • A planning stage in which you define your goals, analyze current KPIs, clarify expectations, and develop standard workflows.
  • An installation and setup phase, with time set aside for employee training.
  • A usage period that allows your team to use the software for a specified amount of time.
  • A review phase in which you can evaluate the success of the implementation and make any necessary changes.

3 Best Practices for Paperless Invoice Processing

Use these strategies to get the most out of your new paperless system and optimize invoice management.

1. Ensure Everyone Is on Board

Before you can implement any system, you have to make sure everyone is on the same page. That includes anyone who’s involved in the management and execution of accounts payable, from the CEO and CFO to the AP clerk. Remember that those on the front line will be using the system daily, and will be the ones most critical or supportive of the change. Having their full support will make implementation much smoother.

2. Implement a PO Matching System

A PO matching system helps to make on-time supplier payments for the correct amount and detect potential fraud or unauthorized transactions. The process involves matching invoices to purchase orders and order receipts. Although it can be done manually, it’s very time-consuming. Most AP software has a PO matching feature, sometimes called two- or three-way matching. Using this feature will greatly increase efficiency.

3. Work in the Cloud

Cloud-based AP processes allow your team to work from anywhere with an internet connection. All of your data will be accessible 24/7 and updated in real time. This also means your AP data will be secure and backed up automatically, so you don’t need to worry about things like lost invoices. Working in the cloud will make your AP team’s jobs much easier, while also maximizing the security and accessibility of your data.

No Paper, No Problem

A paperless invoicing process eliminates the need for manual data entry, approvals, and payment processing. It also increases data accuracy and ensures that all invoices are paid as quickly as possible. Ultimately, it increases the efficiency of your AP team and saves you both time and money.

Implementing spend management solutions can help make the switch to paperless invoicing seamless, thanks to features like automated workflows and OCR data capture, which help reduce the workload of manual tasks for your finance team.

  • Get the latest blogs from Mesh by subscribing to our newsletter

Manage Your Payments With Full Control & Visibility

Take Control of Your Spend
Manage Your Payments With Full Control & Visibility