The ultimate guide to automated invoice capture
Does your invoice capture process still involve too much paper?
Even though many AP departments have moved to digital processes, many are still dealing with “lots of paper shuffling,” according to one CFO who describes the challenge of eliminating paper from their accounts payable processes. “Lots of printed-out invoices. Productivity was low. And we had a lot of lost invoices between our branch offices.”
It doesn’t have to be this way.
Invoice capture software is evolving. AP automation solutions like Stampli leverage AI and machine learning to make invoice processing faster, more accurate — and paperless. Businesses are seeing real benefits from implementing intelligent document processing in their accounting departments.
In this article, we’ll explore modern invoice capture solutions: how they work, why accurate and fast capture is important, and how AP automation solutions like Stampli can transform your AP processes.
What is automated invoice capture?
Invoice capture is the process of extracting data from invoices and entering it into an ERP or accounting system. The capture process traditionally depends on the type of invoice received. For example, AP departments typically scan and digitize paper invoices, although some businesses may rely on manual processes or outsource paper invoice capture to a third party.
Once the invoice data has been captured and entered into the ERP, it can be coded, verified, and sent for approval and payment.
Invoice capture processes usually use technologies like digital scanning and optical character recognition (OCR) to extract invoice data. Some companies also use electronic data interchange (EDI) or similar systems to transmit and receive invoices without manual intervention.
Why is automated invoice capture important?
According to a 2023 survey by Stampli and Probolsky Research, 80% of companies have automated all or most AP processes. However, another Stampli survey reveals that 15% of companies report having to manage too much paper.
Invoice scanning is important for three reasons:
- Eliminates paper from your AP process.
- Reduces errors.
- Speeds up invoice processing.
Let’s break these out.
Benefit 1: Eliminating paper from invoice processing
Manual paper-based invoice management is error-prone and slow. Scanning or entering paper invoices by hand ties up AP resources, but there are other drawbacks. Very often, AP teams will print out invoices, purchase orders, and other documents as part of their process. Then those paper documents shuffle from desk to desk as the invoice moves through the system. Switching to an automated AP solution eliminates the paper chase and all the errors, delays, and lost documents that go with it.
Benefit 2: Greater invoice capture accuracy
Invoice capture errors have a way of cascading into big problems. One error on a line item could result in an overpayment and a costly investigation to find and correct the source of the error. AI-powered invoice capture significantly reduces error rates and cuts costs. AP automation solutions like Stampli use machine learning to identify your invoice types, internal processes, and GL codes and improve invoice capture, data entry, and coding accuracy. It also features fraud detection and prevention capabilities to reduce the risk of invoice fraud.
Digitizing invoices also lets you store them in a central location and share them with your ERP, making it easier to review transactions and files and keep a complete audit trail.
Benefit 3: Faster invoice processing
Replacing slow, paper-based manual processes with automation speeds up processing times by streamlining complex, labor-intensive processes like invoice coding, 2-way matching, and approvals. AI-powered solutions like Stampli ensure that a human is kept in the loop by ensuring employee oversight of AI decisions and suggestions.
Also, by reducing errors, automated invoice capture reduces the time AP teams spend investigating exceptions, tracking down POs and other documents, and answering questions from approvers and vendors. The result is faster payment cycles and better supplier relationships.
Unlike manual processes, Stampli’s automated system is also fully scalable, ensuring that AP process efficiency won’t be negatively impacted as your business grows.
How automated invoice data capture works
The evolution of artificial intelligence (AI) technology has empowered modern invoice processing systems to interpret different invoice formats with minimal need for manual data entry. AI-powered automated invoice processing solutions replace or eliminate manual steps to produce a more streamlined and accurate workflow.
Here are the steps of the automated invoice capture process.
Invoices received
The process begins when an invoice is received from a supplier. Paper invoices can be delivered by regular mail or courier, while digital invoices can be delivered by email, fax, instant message, EDI, or via a vendor portal. Once the AP department receives the invoice, they can begin processing it.
Scanning and data extraction
The next step is scanning the invoice, converting it to a digital format (for paper invoices), and extracting the header information and line details. The invoice capture tool scans paper documents using OCR technology and converts them to digital format.
The system uses machine learning and natural language processing techniques to identify and extract relevant information like vendor name, invoice number, PO number, line items, product descriptions, prices, credit terms, and taxes and populate them into an invoice record within the system.
As it processes invoices, the system learns your different invoice formats and internal processes to become more accurate and efficient. In systems like Stampli, the AI indicates when it has automatically updated a field so an AP employee can confirm the information.
Invoice coding
As the invoice processing software extracts the invoice data, it automatically codes the invoice. The system looks at the invoice line items and suggests the appropriate GL codes. As with data extraction, the system’s coding accuracy improves as it gradually learns your GL codes.
Invoice and PO matching
When it has populated and coded the invoice data, the software automatically matches the invoice details to the associated purchase order to ensure they’re consistent and avoid paying a duplicate invoice. If the system detects an invoice exception, it alerts the AP team so they can investigate it.
Invoice data entry and approval routing
When the invoice is coded and validated, the system automatically enters the invoice data into your ERP or accounting software for processing. It also suggests the appropriate approver(s) so the AP team can forward the invoice for approval and payment.
The bottom line: An AI-powered AP automation solution with intelligent invoice capture will reduce errors, save time, and let you go truly paperless.
Smart invoice capture with Stampli AP automation
If you want to streamline your AP team’s workload, Stampli is the perfect tool for the job. No other AP automation provider comes close to Stampli’s ease of deployment, quick learning curve, and in-house AP expertise.
“Stampli has made paperless AP possible”
Stampli is the only solution designed to meet the unique needs of accounts payable. It streamlines invoice management, eliminating the need for external communication, ad-hoc workarounds, and manual AP tasks. Stampli provides complete visibility into every transaction, making audits and month-end close easy and informing strategic business decisions — in the words of one customer, making “paperless AP possible.”
“The main thing that benefits our company is the ability to get answers quicker, get approvals quicker, get things done quicker,” reports another Stampli customer. “Before, we were scanning invoices, supervisors were printing them, signing them and scanning them back, then we had to reprint with the approval. Now with one scan and a few clicks, I can have an invoice entered, packing slip attached and an approval within minutes! Stampli saves me TIME and EFFORT!”
Save time and boost productivity with Billy the Bot™
Unlike with other invoice processing solutions, with Stampli, you don’t need to map your workflows manually or document all your edge cases. You can keep fixed workflows or choose dynamic workflows that adapt when processes change.
To create dynamic workflows, Billy learns as it goes. It adjusts itself whenever you change its suggestions or alter your workflows. Once Billy understands your workflows, it adapts. It suggests routing workflows for approval, pre-fills coding fields based on past data, or flags invoice exceptions for further review, providing the flexibility this customer appreciates: “Stampli is easy to use, especially with the help of Billy. I like that Billy can read vendor invoices after scanning, and I do not need to enter the invoice manually. Stampli is helping me solve the problem of processing invoices manually, and this saves me time and helps in my productivity.”
No change to ERP or existing processes
Billy learns and adapts to your invoice management processes, so you don’t have to change your unique business structure or rework your ERP system. With Billy on your side, you can easily manage time-consuming, repetitive tasks like invoice capture, coding, approvals, fraud detection, and syncing invoice data to your ERP. Plus, Stampli features seamless integration with over 70 ERPs, including Microsoft Dynamics GP and Dynamics 365 Business Central, NetSuite, and Sage Intacct, to provide a single source of truth for invoice data across the whole organization.
Billy facilitates smooth communication and collaboration across the invoice workflow. “We are no longer printing and/or scanning invoices then sending through email for approval,” one customer mentioned, saying that Stampli’s centralized communications have ”solved the issue of late invoices due to lost or misplaced emails. Communication between managers and vendors is documented and has saved us so much time and frustration trying to track down the status of invoices.”
Stampli’s unique ability to streamline invoice processing frees your business from paper invoices efficiently – and painlessly.
Contact us today to set up a free demo.
