It is peak season, and your inbox is overflowing with invoices. The hours tick by as you manually enter knowledge, cross-reference POs, and chase down approvals.
What if there was a option to break away from this cycle of inefficiency and scale back your bill processing time by greater than 5 instances?
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That is the distinction between a median firm, which takes 17.4 days to course of an bill, and best-in-class organizations which have embraced automation, which takes simply 3.1 days.
Think about the potential impression this might have in your money circulation, your group’s productiveness, and your monetary decision-making.
Automated bill processing makes use of superior applied sciences like optical character recognition (OCR), synthetic intelligence (AI), and machine studying (ML) that will help you streamline your AP workflow, scale back errors, and speed up the approval course of. Greater than doing issues quicker, it is about gaining management, visibility, and the flexibility to deal with what really issues for your online business.
On this complete information, we’ll discover the basics of automated bill processing; its key elements, advantages, and finest practices for implementation.
What’s automated bill processing?
Automated bill processing is a system that makes use of superior applied sciences to streamline your complete accounts payable (AP) workflow, from knowledge seize to approval and fee.
By automating bill processing, organizations can:
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– Save prices and scale back handbook labor
– Enhance accuracy and scale back errors
– Speed up processing instances and fee cycles
– Improve visibility and management over bill standing
– Guarantee higher compliance and audit readiness
– Guarantee well timed funds, scale back disputes, and supply better transparency
OCR precisely extracts knowledge from invoices, decreasing handbook knowledge entry. RPA automates workflows based mostly on predefined guidelines, eliminating repetitive duties. ML algorithms study from historic knowledge to enhance knowledge extraction and validation, whereas AI handles advanced decision-making and exception dealing with.
Automated bill processing programs additionally seamlessly combine with present ERP and accounting programs, enabling easy knowledge switch and decreasing the necessity for handbook intervention.
These applied sciences work collectively to create a streamlined, clever, and environment friendly AP course of. Somewhat than changing human workers, automation empowers AP execs to deal with higher-value actions like monetary evaluation, threat administration, and proactive provider relationship administration.
How bill automation works
McKinsey estimates that over 60% of finance actions will be automated with present know-how. Whereas the adoption throughout firms have elevated over the previous years, the implementation bit normally differs based mostly on the scale and scale of the group.
Some companies might imagine a semi-automated method would possibly look like a very good place to begin. This usually entails a mixture of handbook processes, spreadsheets, and primary automation instruments. For instance, you would possibly obtain invoices by way of e-mail, then manually enter the information right into a spreadsheet or use an OCR device like ABBYY FineReader to extract bill knowledge. Nevertheless, you continue to have to validate the information, match it towards POs and receipts, and route it for approval manually.
Whereas semi-automated programs will help scale back some handbook effort, they typically result in damaged workflows and inefficiencies. Customers may have to modify between a number of instruments or tabs, copy-pasting knowledge from one system to a different, resulting in delays and potential errors. This method typically entails utilizing instruments like QuickBooks On-line, Xero, and SAP Concur, leading to a fragmented workflow.
That is the place fully-automated bill processing comes into play. These programs present end-to-end automation of the bill processing workflow, utilizing superior applied sciences like OCR, RPA, ML, and AI to deal with each step of the method, from knowledge seize to fee processing, inside a single, built-in platform.
This is a more in-depth have a look at how fully-automated bill processing works:
Step 1: Bill receipt and knowledge seize
Invoices are mechanically captured from varied sources, similar to e-mail inboxes, provider portals, or EDI programs. OCR know-how, just like the one utilized in Nanonets, extracts key info from the invoices, together with vendor particulars, bill numbers, quantities, and due dates. The extracted knowledge is then validated utilizing AI algorithms to make sure accuracy.
Step 2: Information validation and matching
The system mechanically matches the extracted bill knowledge towards POs and receipts utilizing predefined guidelines. This course of ensures that the invoices are legitimate and correspond to precise items or companies acquired.
Step 3: Routing for approvals
Primarily based on predefined approval hierarchies and guidelines, the system mechanically routes invoices to the suitable approvers.
For instance, if an bill exceeds a certain quantity or belongs to a particular division, it may be routed to the related supervisor or CFO for approval. Approval workflows will be personalized based mostly on the group’s particular necessities, guaranteeing compliance and decreasing approval instances.
Step 4: Posting to ERP or accounting system
As soon as an bill is authorised, the system mechanically posts the information to the built-in ERP or accounting system, similar to Oracle NetSuite, Microsoft Dynamics 365, or SAP Enterprise One.
This eliminates the necessity for handbook knowledge entry and ensures that monetary data are all the time up-to-date. The seamless integration between the bill automation system and the ERP software program reduces errors and saves time.
Step 5: Cost processing and reconciliation
The bill automation system initiates the fee course of based mostly on the predefined fee phrases and strategies. It could possibly additionally deal with reconciliation by matching the funds with the corresponding invoices, guaranteeing correct and well timed fee processing.
Right here’s a fast overview of semi-automated and totally automated bill processing workflows and the way they differ:
| Course of Space | Semi-Automated Processing | Totally Automated Processing |
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| Processing Pace | 2-3x quicker | 5-10x quicker |
| Error Fee | 1-2% error fee | <0.5% error fee |
| Value Financial savings | 30-50% price discount | 60-80% price discount |
| Workers Productiveness | 50% time freed for evaluation | 80% time for strategic duties |
| Scalability | Requires new hires to scale | Can deal with 5-10x quantity |
| Cost Accuracy | 95-98% on-time funds | >99% on-time funds |
| Audit Readiness | Hours to arrange | Minutes to generate studies |
| Audit Readiness | Days to arrange | Hours to arrange |
Having an automatic system ensures you have real-time visibility into bill knowledge. It empowers finance groups to make proactive selections about money circulation. For instance, they will establish invoices eligible for early fee reductions, optimize fee timing to maximise working capital, and shortly handle any bottlenecks or exceptions that might delay funds. It additionally avoids giving suppliers a motive to ship a number of bill copies, which might result in confusion and duplicate effort.
These fully-automated bill processing system allow companies to streamline their AP processes. You may scale back handbook effort and obtain important price financial savings. Firms which have adopted fully-automated bill processing have reported a discount in processing prices and an enchancment in processing instances.
Finest practices for profitable bill automation implementation
Implementing a fully-automated bill processing system is not only about selecting the best know-how. To actually take pleasure in the advantages of automation, you could observe finest practices that guarantee a easy transition and optimum efficiency.
Listed below are 5 key finest practices to bear in mind:
1. Set up clear approval hierarchies and guidelines
By clearly defining who must approve invoices based mostly on elements like quantity, vendor, or division, you may make the approval course of extra environment friendly and guarantee compliance.
As an illustration, you possibly can arrange an approval rule that requires all invoices over $10,000 to be authorised by the CFO, whereas invoices below $1,000 will be mechanically authorised in the event that they match the corresponding PO and receipt. This helps forestall unauthorized spending and reduces the danger of fraud.
Implementing clear approval hierarchies and guidelines can scale back approval instances, enabling quicker processing and fee of invoices.
2. Keep correct vendor and PO knowledge
To make sure easy bill matching and validation, it is essential to keep up correct vendor and PO knowledge in your system. This contains usually updating vendor info, similar to contact particulars, fee phrases, and tax IDs, in addition to guaranteeing that POs are created and authorised in a well timed method.
By protecting your vendor and PO knowledge up-to-date, you possibly can scale back the variety of exceptions and handbook interventions required within the bill processing workflow. This, in flip, helps forestall delays and errors in processing.
3. Often monitor and optimize system efficiency
Implementing an bill automation system will not be a one-time process. To make sure ongoing success, it is important to usually monitor and optimize your system’s efficiency. This entails monitoring key metrics like processing instances, exception charges, and straight-through processing (STP) charges.
By repeatedly monitoring these metrics, you possibly can establish bottlenecks and areas for enchancment in your bill processing workflow. For instance, in case you discover a excessive variety of exceptions associated to a specific vendor or bill kind, you possibly can examine the basis trigger and take corrective motion.
4. Guarantee alignment between procurement and finance groups
Profitable implementation of those instruments requires cautious alignment between procurement and finance groups. Whereas finance groups would possibly deal with options and value financial savings, procurement groups typically prioritize consumer expertise and provider adoption.
It’s worthwhile to guarantee an alignment between these two numerous views. This might be achieved with a cross-functional group with members from each groups or utilizing shared KPIs that steadiness each their priorities.
This alignment is important for addressing challenges like exception dealing with and capturing alternatives like early fee reductions, which might considerably impression your ROI.
5. Guarantee knowledge safety and compliance
With the delicate monetary info concerned in bill processing, it is important to implement strict entry controls, knowledge encryption, and common backups. It shield your online business towards knowledge breaches and unauthorized entry.
Moreover, make sure that your bill automation resolution complies with related trade rules, similar to GDPR or HIPAA. It’s essential for avoiding potential authorized points and sustaining belief together with your distributors and clients.
Selecting an bill automation resolution that’s compliant with related rules will help mitigate safety dangers and make sure the integrity of your monetary knowledge.
6. Give attention to knowledge high quality
Poor knowledge high quality can hinder the effectiveness of automation. You may make sure that your automated system operates effectively by implementing sturdy knowledge extraction instruments and practices.
As an illustration, AI-powered OCR fashions higher perceive bill layouts and fields and might even course of invoices in several languages. It permits you to extract knowledge precisely and with minimal fuss. Furthermore, a few of these instruments include database matching, permitting you to counterpoint extracted knowledge by matching with exterior databases or instruments and including lacking knowledge.
This could scale back exceptions, enhance straight-through processing charges, and improve the general effectiveness of your automated bill processing system.
7. Develop clear exception-handling processes
Even with automation, some invoices could require handbook intervention. So, set up clear procedures for managing exceptions. It could possibly reduce disruptions and keep effectivity.
For instance, you would possibly create a tiered system for dealing with exceptions, with clear pointers for when to escalate points. You can additionally implement common critiques of exception circumstances to establish patterns and potential system enhancements.
Creating clear exception-handling processes can scale back the time spent on handbook interventions, enhance consistency in problem-solving, and supply invaluable insights for repeatedly bettering your automation system.
Keep in mind, introducing any new know-how will be met with resistance. Brazenly talk the advantages of automation to your AP group, emphasizing the way it will free them from tedious duties and permit them to deal with extra strategic work. Present thorough coaching and assist to make sure a easy transition and handle any considerations about job safety.
In contrast to common software program implementations, bill automation impacts a number of departments and exterior stakeholders. Subsequently, prolong your coaching to key suppliers, serving to them perceive how you can submit invoices within the new system successfully.
Measuring the efficiency of automated bill processing
Calculating the ROI of bill automation is essential for justifying the funding and guaranteeing that you simply’re getting probably the most worth out of your system.
Listed below are some key metrics to trace and how you can use them to calculate the ROI of your bill automation implementation:
1. Processing time and effectivity
- Bill cycle time: The entire time from bill receipt to fee
- Contact time: The period of time spent manually dealing with every bill
- Straight-through processing (STP) fee: The share of invoices processed with out handbook intervention
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Common Bill Cycle Time = Sum of all particular person cycle instances / Variety of invoices
STP Fee = (Variety of Invoices Processed with out Guide Intervention / Complete Variety of Invoices Processed) x 100
2. Error charges and accuracy
Observe the variety of errors per bill and the general error fee to measure the impression of automation on accuracy.
Widespread errors to trace embody:
- Incorrect knowledge entry
- Mismatched invoices and POs
- Duplicate funds
- Missed early fee reductions
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Error Fee = (Variety of Invoices with Errors / Complete Variety of Invoices Processed) x 100
3. Value per bill
Calculating the fee per bill is important for figuring out the monetary impression of bill automation. This metric takes into consideration all the prices related to processing an bill, together with labor, know-how, and overhead.
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Value per Bill = Complete Bill Processing Prices / Variety of Invoices Processed
4. On-time fee proportion
Observe the proportion of invoices paid on time to measure the impression of automation on fee timeliness. This metric not solely measures the impression of automation on fee timeliness but additionally displays improved provider relationships.
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On-time Cost Share = (Variety of Invoices Paid On or Earlier than Due Date / Complete Variety of Invoices Paid) x 100
5. Early fee low cost seize
Monitor the proportion of eligible early fee reductions captured. That is typically an neglected advantage of automation. Even capturing a further 5% of obtainable reductions can considerably impression your ROI.
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Early Cost Low cost Seize Fee = (Worth of Early Cost Reductions Captured / Complete Worth of Obtainable Early Cost Reductions) x 100
6. Return on Funding
To calculate the ROI of your bill automation implementation, observe these steps:
- Decide the overall price of implementation, together with software program, {hardware}, coaching, and any consulting charges.
- Calculate the annual price financial savings achieved by means of automation, contemplating:
- Lowered labor prices attributable to quicker processing instances and fewer handbook interventions
- Eradicated late fee charges
- Captured early fee reductions
- Lowered error-related prices, similar to duplicate funds or incorrect funds
- Use the next formulation to calculate ROI
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ROI = ((Annual Value Financial savings – Complete Implementation Value) / Complete Implementation Value) x 100
For instance, in case your whole implementation price was $50,000 and also you achieved annual price financial savings of $75,000, your ROI can be: ($75,000 – $50,000) / $50,000 x 100 = 50%
Which means for each greenback invested in bill automation, you are seeing a return of $0.50 within the first 12 months alone. Over time, because the preliminary funding is recouped, this ROI will enhance considerably.
Keep in mind, ROI is not nearly rapid price financial savings. Contemplate the long-term strategic advantages:
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Improved decision-making: Actual-time visibility into bill knowledge permits extra knowledgeable monetary selections.
Worker satisfaction: Eliminating tedious duties and decreasing the time spent on troubleshooting and corrections results in larger job satisfaction and decreased labor turnover.
By monitoring these metrics and calculating your ROI, you possibly can display the tangible worth of bill automation to stakeholders and make data-driven selections about future enhancements and investments.
Selecting the best automated bill processing resolution
With so many automated bill processing options out there available on the market, it may be difficult to find out which one is the very best match for your online business. Every resolution affords completely different options, capabilities, and pricing fashions, making it important to rigorously consider your choices earlier than making a call.
That will help you navigate the choice course of, listed below are some key elements to think about when selecting an automatic bill processing resolution:
1. Performance and options
Begin by assessing your present bill processing workflow and figuring out the particular ache factors you need to handle with automation. Then, search for an answer that gives the options and capabilities that align together with your wants.
Some key options to search for embody:
- OCR and knowledge seize accuracy
- Bill matching and validation
- Approval workflow customization
- ERP and accounting system integration
- Reporting and analytics
- Cellular accessibility
2. Ease of use and consumer expertise
The success of your bill automation implementation largely will depend on consumer adoption. Search for an answer with a user-friendly interface and intuitive navigation to make sure that your group can simply study and use the system.
Contemplate elements like:
- Customizable dashboards
- Drag-and-drop workflow builders
- Contextual assist and assist
- Coaching sources and documentation
3. Integration capabilities
To maximise the advantages of bill automation, it is essential to decide on an answer that seamlessly integrates together with your present ERP, accounting, and different enterprise programs. This ensures that knowledge flows easily between programs, decreasing handbook knowledge entry and errors.
Search for options that supply:
- Pre-built integrations with fashionable ERP and accounting programs
- Open APIs for customized integrations
- Safe knowledge switch and synchronization
4. Scalability and suppleness
As your online business grows and evolves, your bill processing wants could change. Select an answer that may scale with your online business and adapt to your altering necessities.
Contemplate elements like:
- Quantity-based pricing fashions
- Modular structure for including or eradicating options
- Multi-entity and multi-language assist
- Customizable exception dealing with workflows
- Help for numerous bill codecs and languages
5. Safety and compliance
With the delicate monetary knowledge concerned in bill processing, safety and compliance are non-negotiable. Search for an answer that prioritizes knowledge safety and adheres to related trade rules.
Key safety and compliance options to search for embody:
- Function-based entry controls
- Information encryption and safe storage
- Common safety audits and certifications (e.g., ISO 27001, SOC 2)
- Compliance with rules like GDPR, HIPAA, and PCI DSS
6. Buyer assist and coaching
Implementing an automatic bill processing resolution will not be a one-time occasion. Ongoing assist and coaching are important for guaranteeing the long-term success of your implementation.
Search for a vendor that gives:
- Responsive buyer assist by means of a number of channels (e.g., cellphone, e-mail, chat)
- Devoted account administration
- Common software program updates and enhancements
- Coaching sources
7. AI and ML capabilities
These options can considerably improve the accuracy and effectivity of your bill processing:
- Clever knowledge extraction that improves over time
- Anomaly detection to flag potential fraud or errors
- Predictive analytics for money circulation administration
- Automated coding and categorization of bill line objects
- Automated invoice-PO matching
8. Provider adoption assist
Getting suppliers on board with new bill submission strategies will be difficult. Search for options that supply:
- Provider onboarding instruments and sources
- A number of choices for bill submission (e.g., portal, cloud storage, e-mail, EDI) to accommodate varied provider capabilities
- Provider efficiency analytics to trace adoption and establish areas for enchancment
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Evaluating fashionable options available in the market
That will help you get began together with your analysis, this is a comparability of some fashionable automated bill processing options:
| Software program/device | Finest for | Pricing | Free trial |
|---|---|---|---|
| Nanonets | SMBs & Enterprises searching for superior automation utilizing AI | 500 pages free, then $0.3/web page | Sure |
| Airbase | Firms searching for a whole spend administration platform with AP automation options | Customized pricing | No |
| BILL | Self-employed & small companies | Begins from $45/month/consumer | No |
| Stampli | Small & mid-sized companies with a deal with collaboration | Customized pricing | No |
| Tipalti | Managing world funds & advanced tax necessities | Begins from $129/month | Sure |
| Ramp | Startups and small companies searching for a free AP automation device | Begins from $0/month/consumer | Sure |
| Freshbooks | Small service-based companies that want easy invoicing capabilities | Begins from $19/month | Sure |
| Xero | Small companies that use Xero accounting software program | Begins from $29/month | Sure |
| Intuit Quickbooks | Small companies that use QuickBooks accounting software program | Begins from $18/month/consumer | Sure |
| SAP Concur | Massive enterprises that use SAP ERP programs and need tight integration | Customized pricing | No |
The right way to implement automated bill processing in your online business
Begin the method by assessing your present bill workflow, figuring out ache factors, and setting clear, measurable targets aligned together with your broader organizational targets. Then, safe stakeholder buy-in by presenting a compelling enterprise case highlighting potential ROI and proactively addressing considerations.
When selecting an answer, consider it based mostly on the elements we recognized within the earlier part. When you full the acquisition, type a cross-functional group, together with members from AP, IT, and procurement, to plan the implementation.
Talk about with the software program vendor to create a timeline for knowledge migration and system integration. This can set the stage for a profitable rollout of your new automated bill processing system.
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This is how you can implement AI bill processing utilizing Nanonets for instance:
Step 1: Join Nanonets and log in to your account.
Step 2: As soon as you have signed up and logged in, navigate to the ‘Workflows’ part. Select the pre-built AI bill processing mannequin.
Step 3: Configure approval guidelines and phases based mostly in your necessities. Assign approvers to evaluation flagged invoices. This step is essential for sustaining management and compliance in your bill processing.
Step 4: Arrange bill enter strategies: add regionally saved invoices (PDFs, JPG, PNG, and so forth.) or import information from completely different sources similar to e-mail or cloud storage like Google Drive, OneDrive, or Dropbox. You may even automate bill seize from designated e-mail inboxes
This is a fast demonstration of how Nanonets extracts key knowledge from a pattern bill
Step 5: The AI mannequin mechanically extracts essential info similar to vendor particulars, line objects, and totals with distinctive accuracy. Evaluate the extracted knowledge and make obligatory changes. Every correction you make improves mannequin efficiency.
Step 6: Configure the automated export and real-time synchronization of authorised invoices to your accounting software program or ERP. Nanonets integrates with QuickBooks, Xero, SAP, and extra. You may also manually obtain the information in varied codecs or share it straight with group members. You may even mechanically create journal entries in your accounting software program or replace stock ranges based mostly on invoiced objects.
By following these steps, you possibly can implement an automatic bill processing system that gives quite a few advantages:
- No-code platform, making it accessible to non-technical customers
- Extremely correct knowledge extraction, even for advanced bill codecs
- Steady studying and enchancment based mostly on consumer suggestions
- Strong safety measures, together with SOC-2 certification and GDPR compliance
- Versatile integration choices with present accounting and ERP programs
- Prebuilt AI bill processing mannequin that precisely extracts key info fields, similar to vendor names, bill numbers, and totals, out-of-the-box
- Customizable AI fashions that may be skilled in your particular bill codecs and knowledge necessities
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Keep in mind, profitable automation is not nearly know-how – it is about remodeling your whole method to bill processing. Be ready to adapt your workflows to completely harness the facility of your new system.
Whereas automation will deal with most invoices, exception administration stays essential. Guarantee your group is provided to effectively deal with these circumstances, utilizing every occasion as a chance to additional improve the system.
Nice product and buyer assist. – 10/10 would advocate!
“Nanonets is ready to reference our important listing of distinctive product traces and assign them to the right GL in Quickbooks and different programs. All whereas sustaining above 90% accuracy with out our group having to the touch something. It has saved us numerous hours of information entry.”
— Kale F., Director of DVM Workplace, in a evaluation on G2.