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Electronic invoice processing: what is it and how does it work in practice?

More and more organizations are adopting electronic invoice processing. The promise underlying e-invoicing is clear: the ERP systems of supplier and recipient automatically exchange orders, delivery notes and invoices so that both parties do not have to worry about the processing. In practice, things are a bit more complicated. We still have some way to go before we reach the ideal of e-invoicing. The various standards, the different formats in which invoices come in (such as XML and pdf) and the diversity in channels of entry (including mail and Web services) require attention. It requires quite some flexibility from your organization to move with all the developments. At the same time, e-invoicing offers plenty of opportunities to realize an even more efficient process. You can further reduce issues such as manual operations and error proneness, for example. And you will have a more controlling role in the financial administration. So e-invoicing is a nice development towards an even smoother process of processing orders, receipts and invoices. The question is: what does e-invoice processing really mean right now? And how can you process XML invoices in an efficient, smooth and time-saving way?

Coordinate the flow: how do you process electronic invoices quickly and efficiently?

An e-invoice can come in through a variety of channels. Think e-mail or a more secure channel, such as a web service where you can retrieve e-invoices directly. Because there is a considerable diversity of standards and initiatives, your organization must be very flexible. Only then can you ensure a clear process. Important, because this diversity will remain for some time. In addition, you never receive only e-invoices. There are many e-invoicing initiatives within industries. But suppliers operating in other sectors sometimes use different standards. And as long as not everyone sends e-invoices, you will have to deal with a hybrid structure of PDF and XML invoices. Somehow, you will have to process the diverse stream of incoming invoices in a structured, efficient way. The solution: smart software that lets you process each invoice automatically. It interprets invoice data and converts an electronic invoice into a booking proposal.

With smart software, manual operations are truly a thing of the past

E-invoicing in all its glory ensures that the process from order to invoicing is virtually operationless. But in practice, we currently see that it is mostly an exchange of XML invoices, where you do have to perform certain actions to get a booking proposal. And should the full e-invoicing process already be in place, you still need a process for checking, correcting and fixing mismatches and discrepancies. Good software takes these tasks off your hands. Next, you need the right approvers to approve the invoice. And for that, you can use a digital workflow. A supplier of solid invoice processing software often offers a total solution that allows you to reduce all manual actions in the purchase invoice processing process to an absolute minimum.

From paper invoices to e-invoicing: does electronic invoice processing suit your organization?

First, it’s important to find out if your suppliers are ready for e-invoicing. But even if the concept is not yet alive with them (or in its infancy), it makes sense to prepare for it. Because within the next few years it will play an increasing role. So take a look now at how electronic invoice processing can benefit you. For example, if you work with purchase orders, it’s smart to look into a matching module that will help you process XML invoices in a fully automated way.

Benefits as well as solutions to potential complications

 

One total solution for digital invoice processing: software offers solution

A prerequisite for benefiting from electronic invoice processing is that you use reliable software. This way you coordinate the flow, keep the overview and process XML invoices even faster. After all, the data are already known, so they are interpreted directly from the software. Keep in mind that for a long time there will be a hybrid situation in which we have to process both e-invoices and PDF invoices. So choose smart software from a vendor that knows the ropes of “digital invoice processing” – an experienced OCR party that is also very good at processing e-invoices and turning them into one smooth process. Only then will you know that your solution is future-proof. A crucial aspect for e-invoice processing!  

100% certainty: are the billing details correct?

Good OCR software achieves very high interpretation. With an XML invoice you achieve full interpretation, provided it is set up properly. E-invoices do not always have the same layout as traditional purchase invoices. A good scan and recognize solution takes into account the fact that we are increasingly dealing with new forms of presentation. With good software, you can automatically convert the does and invoices to an accounting proposal in both cases. However, this does not take away from the fact that you have to check whether the data óf the invoice is correct. After all, only you can judge whether the suppliers have put the correct data on it!  

XML and pdf: where to find all the data needed for a booking?

Some companies receive XML invoices that comply with the standard, but still prefer pdf versions. This is because they contain more information, such as the general ledger number you need to make a successful entry. The key is to choose software that brings together the best of these two worlds. After all, that way you create a situation where it doesn’t matter to you as a financial administrator in what form and through what channel an invoice comes in. All incoming invoices are processed automatically by the system!

Electronic invoice processing in practice: two examples

Many different types of XML invoices are in circulation in the construction industry. For example, there are several versions of INSBOU. Good software processes all invoices in the same way and translates XML data into booking data. An example: the XML file talks about 21% VAT. This corresponds to code 4 in your ERP package and to a specific ledger belonging to the supplier in question. The system automatically recognizes these items and enters the invoice for you. If it is a purchase order that has already been approved at the front end and the invoice details are correct, you will not see the document again. Simple and efficient! Another example: if orders and receipts are already processed digitally, you usually don’t have to worry about an e-invoice. But in practice, of course, mismatches can arise – for example, in the quantities delivered or in the agreed unit price. Good software makes such mismatches visible. You can then check them and process them correctly.

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With a (web) demo, you can quickly and easily see what benefits our solution brings you.

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