Invoice processing costs: how do you process incoming invoices economically and efficiently?

Manual processing of incoming invoices seems advantageous at first glance. But it involves an awful lot of handling. Have you ever calculated how much processing one invoice costs you with this traditional method? Increasingly, you hear around you that digital invoice processing saves time, works more efficiently and minimizes errors. Why? Because you eliminate many steps. That’s why you googled the term “cost invoice processing” anyway. So what is the most cost-effective solution for your accounting needs?

No cost, yet digital invoice processing: is it possible?

If you want to get rid of the manual processing of incoming invoices, you need a scan and recognize solution(also called “OCR software“). But those who take the first steps to automate the process immediately encounter a multitude of options. So do the “free” options with which some parties advertise. These sound attractive, but are they? On the worldwide Web, you will find a wide range of free OCR software. These are often available in multiple languages. Recognition is fast: a document is recognized within a fraction of a second. Useful? Not if you want to be able to do something with the result. With free OCR software, you get back one big mess of text. In other words, the software does not interpret the invoice data. And that is precisely what is crucial if you want to achieve an efficiency boost and save time.

No more manually entering invoices: an investment that will pay you dividends

What you need is a system that converts document data to editable text in a specific computer system, such as an accounting package. So what data is involved? An invoice has certain default values that are always on the document. Think invoice number and date, but also the amount to be paid. Good OCR software recognizes these values and interprets them automatically. Such interpretation is not free of charge, as it requires advanced technology. But it is the only way to reduce the average cost of processing an invoice and actually save money. After all, you don’t have to comb through a big mess of text – a method that is actually so inefficient that you can get done faster if you type the invoice data directly into a financial system! By the way, you don’t necessarily have to turn the corporate wallet inside out. After all, you don’t need the most expensive, but the best OCR software. A system that is worth the investment because it delivers far more than what it costs.

Which scanning and recognition software provides cost savings?

A good solution minimizes repetitive, boring tasks and allows you to work more efficiently. For example, depending on your current workflow, it can allow one person to handle the work that used to require three people – creating more space to take on other, more challenging tasks. But then you have to use the right OCR software. How do you find it? First, look at where your organization stands. Identify the problems you are facing. Does looking up posted invoices take a lot of time? Want to get rid of overtyping errors? Do you receive invoices via e-mail as well as a variety of other channels, or do suppliers send digital invoices in various forms (for example, in the body of the e-mail, in PDF format and in XML format), making it difficult to coordinate the flow?
Only when you have defined the current issues can you determine what document processing should look like for your company.
Then you can look very specifically for a scanning and recognition solution that meets your organizational needs.
While doing so, be sure to consider the future-proofing of the software.
Of course you want to use it to process purchase invoices.
But there are more and more document types that also benefit from good interpretation.
Think of bills of lading, receipts and identity documents.
If you use an OCR solution that also recognizes such documents, you will benefit from this now and in the future!

With e-invoicing, do you even need invoice processing software?

E-invoices can come in via email, but also via a more secure channel (for example, a web service where you can retrieve e-invoices directly). When it comes to e-invoicing, there is a considerable diversity of initiatives and standards. If you want to ensure a clear process, your organization needs to be very flexible. Moreover, you never receive e-invoices exclusively. Within certain industries, electronic invoice processing is in full development. But suppliers operating in other industries sometimes use different standards. So in practice, you’re usually dealing with a hybrid structure of PDF and XML invoices. The result: a diverse flow of purchase invoices. You need to process these in an efficient and structured way. You do that with smart software that processes every invoice automatically, regardless of the format or channel of entry.

How do you choose a supplier that turns costs into benefits?

An OCR solution is a long-term investment. That’s why it’s important to choose a vendor that understands your organizational needs and thinks with you. Once you’ve found invoice processing software that appeals to you, have a conversation with the vendor. Is they familiar with your industry and jargon? And does the company culture fit your organization? Ask around to make sure a long-term partnership is in the cards. Also see if the supplier is reliable. For example, read references, customer cases and reviews. Also see how long the company has been around and check whether it has built solid partnerships with ERP parties. Finally, assess whether the vendor is transparent enough. Does it communicate clearly on its website and during initial contact? Do you get a good explanation of the scanning and recognition solution? Is it clear during the quotation phase what you can expect if you go into business with this party? Does the vendor welcome user feedback because they do continuous development (an important aspect, because it indicates that this party is always striving to make the solution even better)?