QuickBooks invoice processing automation: The essential guide
Is your QuickBooks feeling not-so-quick lately?
QuickBooks is a good accounting solution, especially for small businesses, but its vendor invoice processing capabilities are limited. QuickBooks Online and QuickBooks Desktop offer basic AP features like invoice data entry, approval, and payments. However, their reliance on manual processes, lack of advanced accounts payable functionality, and poor scalability can become significant obstacles as your company grows.
If you’re a growing business using QuickBooks, this is likely a familiar story. If manual data entry, approval bottlenecks, and payment errors are slowing down your business, it’s time for a change.
Your AP solution should grow with your business. Having a dedicated solution for managing, tracking, approving, and paying vendor invoices is crucial for financial management and business growth.
In this article, we’ll explain how to leverage financial automation software to optimize the QuickBooks invoice process. We’ll break down the core workflows, show how they can be optimized, and share what other businesses are saying. By the end, you’ll have a roadmap to more streamlined and scalable AP processing in QuickBooks.
What is invoice processing in QuickBooks Online and Desktop?
The invoice processing workflow in QuickBooks provides basic AP functionality for entering, approving, and paying vendor invoices. It also offers some reporting capabilities to help businesses monitor invoice status and financial performance.
Why QuickBooks isn’t ideal for invoice processing
QuickBooks is a powerful accounting and financial automation tool. Its core AP functionality is sufficient for small businesses that handle a small number of invoices each month. However, it has limitations when it comes to processing large volumes of invoices:
- Manual processing: QuickBooks relies on manual processes that are slow, error-prone, and not easily scalable.
- Limited workflows: QuickBooks only offers customizable approval workflows in its top-tier Enterprise packages. Approvals are manual in other versions.
- No centralized communications: QuickBooks doesn’t have an internal communications tool. Users must communicate about invoices outside the platform, resulting in lost emails and miscommunication.
- Limited visibility and reporting: While QuickBooks offers comprehensive financial reporting capabilities, it doesn’t provide detailed AP performance reports to help you track invoice status and identify bottlenecks.
- QuickBooks Desktop has been discontinued: Intuit has announced it will stop new sales of QuickBooks Desktop effective September 30, 2024. It’s unlikely that Intuit will be adding new features to the platform after this date.
In its survey “AP in 2023: Expectations, Technology, Opportunity”, Stampli asked finance leaders about their expectations for the volume and complexity their organizations would receive in the near future. The findings revealed that a significant majority (75%) anticipate an increase in invoice volume, with over a quarter (27%) expecting a significant jump. More than half the respondents (53%) predict that invoices will also become more complex.
As small and medium-sized businesses grow, the volume and complexity of vendor invoices often increase, straining QuickBooks accounts payable management. Scaling invoice processing to meet this growing demand becomes challenging without addressing QuickBooks’ limitations. The best solution is to implement a financial automation platform that seamlessly integrates with QuickBooks to eliminate these obstacles and streamline invoice processing.
Let’s examine the QuickBooks invoice processing workflow more closely to see how financial automation can optimize invoice processing.
How to automate invoice processing in QuickBooks
Although the different versions of QuickBooks differ slightly in the invoice management features they offer, they provide the same basic functionality. We can break down the core QuickBooks invoice process into 4 components:
- Invoice data entry
- Invoice coding and matching
- Approval
- Vendor payment
1. Invoice data entry
The QuickBooks invoice process begins with entering the invoice details as a vendor bill. For most versions of QuickBooks, it involves opening a new vendor bill, selecting the vendor and payment terms, entering the bill date, due date, and bill number, and then entering the invoice details and amount. This process is slow, prone to errors, and isn’t easily scalable.
QuickBooks also offers the option to upload a digital invoice and automatically scan the invoice details. However, customers say the automatic uploads don’t always work, forcing them to enter the details manually: “The upload/review bills section could use some work. It is not very intuitive and does not prefill very much information for you.”
How automation streamlines invoice data entry in QuickBooks
AP automation solutions use optical character recognition (OCR) to scan and capture invoice data and eliminate manual data entry. Solutions that integrate with QuickBooks can then synchronize this data to create the QuickBooks bill records.
Smart QuickBooks invoice capture with Stampli
Many invoice processing solutions offer automated invoice scanning but struggle to capture invoice details and detect duplicate invoices consistently. Only Stampli features smart invoice capture that leverages AI and machine learning (ML) to eliminate errors and duplicates. Billy the Bot, Stampli’s AI assistant, is trained on millions of invoices. Billy understands different invoice formats and languages to capture invoice details accurately.
“…Stampli is a huge blessing for our company!” one customer says. “It’s easy to search for what you’re looking for, make needed updates to the coding, add additional reviewers, ask questions and work through the process in general. Having it directly upload to QuickBooks is also a huge blessing to save time on payment processes.”
2. Invoice coding and matching
After the bill details have been entered into QuickBooks, the invoice can be GL-coded and matched to the purchase order (PO) and shipping receipt. Invoice coding in QuickBooks is a manual process. Although most versions of QuickBooks will suggest expense categories, this functionality is rule-based. The user needs to review and verify the coding, making changes or adding codes where needed — a laborious process. One QuickBooks user complained: “Input can be tedious with batch upload of transactions, and a little hard to follow when coding accounts.”
Once the invoice is coded, it needs to be verified. In QuickBooks, this involves manually comparing the bill record to the purchase order and shipping receipt. However, one QuickBooks user pointed out that QuickBooks “doesn’t have the PO options where we can manage purchase orders and link with the invoice.” In other words, users must manually locate the PO associated with the bill before they can perform 3-way matching. Furthermore, if the business manages its purchasing and inventory operations with a different platform than QuickBooks, users will need to access the PO and receipt in those platforms to compare them with the bill record in QuickBooks.
How AP automation improves invoice coding and matching in QuickBooks
Many AP solutions automatically code invoices and match them against POs and receipts. Removing manual coding and matching expedites invoice processing and reduces errors and the risk of fraud.
Fast and accurate invoice coding and matching with Stampli
Although many AP automation platforms perform invoice coding and matching, they often fall short of fully automating these processes. Many rely on rules-based workflows to code invoices, requiring users to manually review invoice details and correct any mistakes. Others offer three-way matching but don’t always synchronize real-time PO and receipt data from ERPs, requiring AP teams to check invoices manually.
Stampli makes invoice coding and matching faster and more accurate. Billy the Bot, Stampli’s AI copilot, learns your cost accounting rules and invoice coding patterns and automatically assigns the correct code. Billy also ensures human oversight of its coding decisions. When Billy codes an invoice it adds an icon next to each suggestion so users can easily see and review its decisions.
One user says that Billy has helped improve invoice processing efficiency: “Stampli streamlines the payables process with its ability to read bills, extract information, and remember coding details over time. We have decreased the amount of time spent in data entry.”
Stampli also optimizes 2- and 3-way matching by synchronizing live PO and receipt data from QuickBooks. Using live data ensures the matching process is as accurate as possible. Billy automatically matches the PO and receipt against the invoice. In the event of a discrepancy, Billy flags the error and notifies the user.
“Stampli has made invoice processing very quick and easy,” says a G2 reviewer. “Billy the Bot is a big help with filling out most of the fields, which allows us to spend less time entering every line and more time to analyze. PO matching has also increased the number of invoices entered per day.”
3: Bill approval
Once the invoice has been coded and verified, it can be sent for approval. However, most versions of QuickBooks don’t automatically send the invoice to an approver when it’s ready for payment. The AP user must go outside QuickBooks to notify the approver by email that the bill is ready.
Large business customers complain that despite being an “enterprise” solution, QuickBooks Enterprise doesn’t offer automated approval routing. “QuickBooks Enterprise is made for larger companies,” says one customer, “but lacks control points such as the ability for transactions to be reviewed and approved before posting.”
QuickBooks customers say they want a financial automation platform that handles approvals. In a TrustRadius review titled “Moving on from QuickBooks,” one customer said, “We would also like to have a system where expense processing (approval process) is within the financial system; something not currently performed in QuickBooks.”
QuickBooks Enterprise Platinum and Enterprise Diamond solutions offer automated rules-based approval routing. AP departments can create rules to route bills to specific approvers based on criteria such as bill amount or supplier name. However, these service tiers are substantially more expensive than QuickBooks’ other solutions.
How AP automation simplifies invoice approvals
Most ERPs and accounts payable solutions offer automated approval routing. Depending on the solution, they either automatically notify approvers by email when an invoice is ready for approval or notify the approver within the platform. Some providers also offer customizable approval workflows to route invoices based on amount or other criteria or to route invoices to multiple approvers.
Dynamic approval routing from Stampli
Many financial automation platforms offer customizable approval workflows. In reality, these solutions often only offer limited customization, often requiring expensive IT rework when business processes change. Stampli offers fixed and dynamic workflows to give AP departments maximum flexibility in routing approvals. Dynamic workflows leverage machine learning to learn your cost accounting rules and approval processes. They automatically adapt when your business policies change, with no need for rework.
One AP coordinator shares how Stampli has “revolutionalized” their job: “[B]efore, we used to e-mail certain people to get approval for invoices and I had to manually enter the invoices into QuickBooks. [Stampli] makes it easy to upload, code, and then send it to a user for approval. I can see exactly where I am in the approval process without having to keep track of threads of e-mails. It’s easy to see rejected invoices and the reasons they were rejected when vendors e-mail asking why they haven’t received payment. We’ve been able to go paperless because all of our invoices are now stored by Stampli.”
4. Vendor payment
The invoice can be paid once it has been approved. Vendor bill payment options in QuickBooks include paying the bill directly using QuickBooks Bill Pay, printing and mailing a paper check, or sending an ACH file to the bank.
Some QuickBooks customers complain that the Bill Pay service is slow. “THIS SOFTWARE IS SO GLITCHY AND SLOW!” says one customer. “Some days this software works phenomenally and on the days you need it to work it doesn’t. This is especially bad when it comes to the payment feature for contractors. To pay one contractor is fine but when you need to pay multiple and use the feature included in QB it’s horrible. Every click takes at least 30 seconds to load making a job that should only take a few minutes take 1/2 your workday.”
Growing businesses need flexibility in paying vendors. While not every customer has had a negative experience with QuickBooks Bill Pay, the negative reviews reveal how staying with one payment processing service can leave a business vulnerable. Fortunately, there are many integrated third-party payment solutions for QuickBooks, so there are plenty of choices.
How AP automation streamlines vendor payments in QuickBooks
Standalone payment processing solutions can streamline vendor payments in QuickBooks by bringing various payment methods onto a single platform. They also simplify payment tasks like preparing and sending ACH files, saving time and reducing errors and fraud. AP automation solutions are another good alternative. They combine automated payment processing with control and visibility over invoice processes, making it easier to monitor invoice status and pay vendors on time.
Optimizing QuickBooks vendor payments with Stampli and Stampli Direct Pay
Although payment processing and AP automation platforms can streamline invoice and payment processing, they may not integrate seamlessly with QuickBooks. As a result, AP teams must update QuickBooks records manually or rely on file-based synchronization or workarounds. Stampli and Stampli Direct Pay feature pre-built integrations that support full native functionality for QuickBooks Online and QuickBooks Desktop.
Customers say Stampli’s seamless integration is a game-changer. “Currently we use QuickBooks online and knowing that as soon as an invoice says ‘Authorized for Payment’ in Stampli it will show up in QuickBooks is wonderful,” says one G2 reviewer. “No more guessing at whether it is going to show up, or when it is going to show up. I also love that as soon as I mark something as paid in QuickBooks, it shows up in Stampli means that the connection goes both ways, and all the data is up to date.”
Use case: Becker Studios realizes 4X ROI with QuickBooks and Stampli
Becker Studios Construction specializes in interior design, construction, real estate consulting, and estate management. As a growing company, they were managing more than 1200 invoices per month — and processing them manually in QuickBooks Desktop.
Accounting manager Jeremy Patterson knew Becker needed to automate accounts payable. Becker was using QuickBooks to manage its 13 entities, so Jeremy needed a scalable solution that was flexible enough to manage multiple companies, would seamlessly integrate with QuickBooks, and was powerful enough to handle Becker’s invoice processing.
Becker chose Stampli. Implementation and onboarding took only three days, including Becker buying and setting up a dedicated QuickBooks Desktop server. Stampli seamlessly integrated with QuickBooks, imported Becker’s AP data (including general ledgers, classes, customer lists, and bank account listings), and trained Becker’s AP team.
After integration, Stampli continuously syncs AP data with QuickBooks, ensuring that users always have access to up-to-date data when processing invoices. “It’s the same exact thing as entering it into QuickBooks,” said Jeremy. Becker’s users still maintain data integrity and accuracy without having to manually enter data into QuickBooks or access QuickBooks to complete AP tasks.
After implementing Stampli, Becker gained visibility and control over their invoice processes, which immediately translated into time and cost savings. “Before Stampli, nobody actually viewed invoices until they got to the billing side — which was already too late in many cases, because they may have already been paid,” said Jeremy.
Jeremy’s assessment of Becker’s ROI from choosing Stampli is twofold. First, by automating invoice processing, Becker avoided having to hire a full-time account payable employee, which Jeremy calculates as a 4X ROI on labor costs. Second, using Stampli gives Jeremy and his team time for more strategic work. “Before Stampli, I was just running AP and putting out fires left and right,” he says. “Now I’m able to actually manage the department to help the business.”
Take control of QuickBooks invoice processing with Stampli
Stampli is the financial automation solution for AP teams that want the efficiency of automation but don’t want to rework their ERP or change their existing processes. Its flexible and powerful pre-built integrations for all versions of QuickBooks Online and QuickBooks Desktop sync key data and documents from any company in QuickBooks into Stampli. Stampli provides AP teams with up-to-date information and lets them process invoices quickly and accurately without needing to go into QuickBooks directly.
Stampli is the only financial automation platform designed for the way AP teams work. It’s recognized by AP professionals for its ease of use, customer relationships, fast and easy implementation, and delivering real results.
“I love that everything is in one place. I’m able to see all of my invoices, make notes, ask my team members questions, see my vendor’s details, and even ask questions directly to the vendors,” says one Stampli customer. “Direct Pay is one of my favorite features! Before Stampli, I was making sure each invoice was in QuickBooks, then using a second program to pay our vendors. So I’d have to make a bill payment in QBs, then manually put in the amount for that vendor in the second program to pay them. Now I don’t have to do any of that. I simply select what invoices I want to pay and click pay. It’s seriously that simple. It connects to our QBs and automatically updates the bills there. It saves me so much time and the potential for human error.”
Stampli helps businesses get more out of QuickBooks by enhancing its capability without changing their workflows. Here’s how Stampli transforms QuickBooks invoice processing:
- Reduced Processing Time: Automates tedious manual tasks, allowing your team to focus on high-value activities.
- Increased Accuracy: Minimizes errors and ensures compliance with financial regulations.
- Improved Cash Flow: Accelerates approvals and takes advantage of early payment discounts.
- Enhanced Visibility: Tracks invoices and payments in real-time, gaining better control over your financial operations.
- Scalability: As your business grows, Stampli scales with you, handling increased invoice volumes without sacrificing efficiency, or when you upgrade to an ERP
“Stupendous Stampli!” says a Stampli customer. “I like how Stampli automates our payables cash flow. It increases our efficiency. The best thing about this is a centralized location for our AP flow…. It allows us to have our AP flow exclusively in one place. It also allows us to get approvals in-system rather than via emails. Business performance has increased.”
For QuickBooks users with a lot of invoices or POs to manage, the combination of QuickBooks and Stampli offers a powerful solution for efficient invoice processing. Contact Stampli today to talk to one of our AP experts.
