7 Ways Automation Simplifies Invoice Coding & Processing

Ways Automation Simplifies Invoice Coding & Processing

Managing accounts payable can be a huge headache depending on the size of your business and the processes you have in place. Some large companies process up to 10,000 invoices per month, while smaller organizations might see around 3,000. Manually processing these invoices requires significant time and resources. If you’re not implementing accounting automation, invoice coding and processing is likely slowing down your finance team in a big way. To stay competitive and improve efficiency, you’ll want to consider the significant benefits of invoice automation.

1. Enables Significant Time Savings

It takes around 10 minutes to manually process one invoice, whereas automated processing takes only 2–3 minutes per invoice. If your AP department were to manually processes 3,000 invoices per month, it would take them about 500 hours. Processing the same number of invoices with the help of automation would require only 100–150 hours. Implementing invoice automation can save literally days (or weeks!) worth of manual work each month.

2. Contributes to Bottom Line Cost Savings

The average cost of manually processing a single invoice is between $15 and $20. Automation can reduce this cost by over 75% to only $2 to $4 per invoice. If you need to process 3,000 invoices per month, you could save at least $9,000 in just invoice processing costs, immediately improving your bottom line. Not only will you save on processing costs, but the increased processing speed can allow you to take advantage of supplier discounts.

3. Enhances Employee Efficiency & Productivity

Invoice automation allows employees to process more invoices in less time. Optical character recognition (OCR) automatically reads and codes invoices, so employees only need to verify that the data was coded correctly. Cloud software also improves the accessibility of invoice data, allowing employees to easily find the information they need. With automation, your AP department can process invoices much more quickly and efficiently.

4. Reduces Human Error

One of the top benefits of automation is the reduction of human error. Typos are incredibly common when entering invoices and disbursing payments, especially if your AP clerk is spending their whole day on these tasks. Matching and routing invoices is another pain point where human error can create avoidable issues. Software can take on all these tasks, taking the pressure off your AP team. It only requires human input if a problem comes up.

5. Improves Vendor Relationships

By now, you know that automation tools can help your AP department to enter, match, and route invoices for approval much faster than manual methods. This increased efficiency allows AP to get payments out the door more quickly and accurately, which will foster trust and credibility with your suppliers. AP can also improve communication with vendors when they aren’t bogged down with entering invoices by hand.

6. Provides Greater Control, Visibility & Transparency

Automation gives you visibility into the status of each invoice—whether it’s awaiting approval, has pending errors, or has already been paid. You can easily find specific invoice data with advanced search features and filters. Software also gives you greater control over your invoicing process in general. Most AP software offers insights into your AP activity and key metrics, alerting you to any potential bottlenecks or opportunities for improvement.

7. Allows for Improved Data Collection, Analysis & Reporting

The data analytics capabilities that come with automation tools are invaluable. You can view high-level expense data to understand the big picture and drill down into more detailed information for greater transparency. Beyond that, you can also create customized reports to suit your specific needs—whatever they may be.

Paperless AP Best Practices

  • Get employee buy-in: The people using the software daily should be on board with the transition. Include the AP department in planning and implementation to help streamline the process.
  • Track KPIs: Measure performance before implementation and across reporting periods. These metrics can help identify bottlenecks before they get out of hand.
  • Integrate with accounting software: What’s the point of automating your invoicing process if you still need to manually enter data into your accounting system? Choose software that will integrate seamlessly.

The Bottom Line

The value of invoice automation can’t be overstated, both in terms of time and money saved, both of which are critical for businesses trying to stay competitive in the current uncertain economic climate. Make sure to follow the best practices above for best results when moving to an automated system, so you can enjoy the (many) extra hours your finance team will get back every month.


What are the advantages of using automated invoice processing over manual invoicing?

The advantages of using automated invoice processing include faster processing, reduced manual errors, improved efficiency, and cost savings.

How does automated invoice generation reduce the risk of errors and delays?

Automated invoice generation reduces the risk of errors and delays by automating data entry and validation processes, minimizing human involvement.

What role does automation play in improving the accuracy of invoice data entry and matching?

Automation plays a significant role in improving the accuracy of invoice data entry and matching through the use of intelligent algorithms that ensure precise data capture and matching.

How can businesses benefit from faster payment processing with automated invoices?

Businesses can benefit from faster payment processing with automated invoices as it leads to quicker invoice approvals, resulting in improved cash flow and timely payments.

How does automated invoice software streamline the invoice creation and distribution process?

Automated invoice software streamlines the invoice creation and distribution process by simplifying tasks such as creating, sending, and tracking invoices electronically.

What integrations are available to connect automated invoice software with accounting systems?

Automated invoice software can integrate with various accounting systems such as QuickBooks, Xero, and others, allowing seamless data transfer and synchronization.

Can automated invoice software help businesses track payment status and manage cash flow effectively?

Yes, automated invoice software can help businesses track payment status in real-time, enabling effective payment management and improved cash flow.

What steps are involved in automated invoice processing, from receipt to approval and payment?

Automated invoice processing involves steps such as receipt scanning, data extraction, approval routing, and payment initiation to streamline the entire invoicing workflow.

What are the potential cost savings and efficiency gains achieved through automated invoice processing?

Automated invoice processing leads to potential cost savings and efficiency gains by reducing processing time, eliminating manual errors, and optimizing resource utilization.

How does invoice processing automation improve the overall accounts payable workflow?

Invoice processing automation improves the overall accounts payable workflow by streamlining processes, reducing processing time, and enhancing visibility into invoice status and payments.

What are the key benefits of automating invoice processing for businesses of all sizes?

The key benefits of automating invoice processing for businesses of all sizes include increased efficiency, reduced errors, faster payments, improved cash flow, and better supplier relationships.

What reporting and analytics features are available in invoice processing automation systems?

Invoice processing automation systems offer advanced reporting and analytics features that provide data visualization, financial insights, and detailed information about the invoicing process.

How does invoice processing automation enhance supplier relationships and invoice tracking?

Invoice processing automation enhances supplier relationships and invoice tracking by ensuring on-time payments, reducing payment delays, and providing a more transparent and efficient invoicing process.

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