How efficient is actually your invoice processing?

Many business leaders believe their accounting processes are efficient, but invoice processing often remains a largely manual and time-consuming task for both internal and outsourced accounting departments, leaving significant room for improvement.

According to Gartner’s "Market Guide for Accounts Payable Invoice Automation Solutions," organizations that adopt AP automation can reduce invoice processing costs by up to 70% and cut the processing time from receipt to payment from an average of 11 days down to just 3-5 days. This highlights the substantial inefficiencies of manual processing and the potential benefits of automation.

High costs of manual invoice processing

Invoice processing often involves thousands of incoming documents that need to be coded, assigned to projects or departments, approved, and ultimately paid. This complex process can consume significant time and resources, with some organizations taking up to two months to complete the entire process. This presents substantial opportunities for efficiency gains through AP automation.

Opportunities for improving invoice processing

Many top executives believe their invoice processing is well automated and digitized. While this is an essential step, it's crucial to continuously evaluate if there are further opportunities for improvement. Invoice processing remains one of the areas where large enterprises can cut significant costs through enhanced AP automation.

Key questions to evaluate efficiency

To understand how efficient your invoice processing is, leaders can ask a few simple questions:

• Do you have dedicated resources handling incoming invoices? How many people, and how many invoices?
• Are the invoices manually checked for accuracy?
• Are the invoices manually coded?
• How are invoices sent for approval?
• How do you ensure consistent coding of invoices every time?
• Do you receive invoices in formats other than EHF, such as PDF, paper, or email?

These questions can help raise awareness of how much time and resources are actually being used on invoice processing and identify areas for optimization.

READ MORE: Why is the finance department refusing to save one day per week?

Enhancing efficiency with automation

Automating the invoice processing workflow can significantly reduce the manual tasks involved. Automated systems can handle data entry, validation, and approval of invoices, reducing the risk of errors and increasing accuracy. According to Gartner, these systems can reduce processing time from 11 days down to 3-5 days, freeing up resources for more strategic tasks and minimizing the risk of delays and errors.

Different approaches to automation

There are various approaches to AP automation, ranging from basic automation to more advanced automation with AI. Basic automation might include rule-based systems that automate repetitive tasks like data entry and approval. Advanced automation with AI goes further by using machine learning and data analysis to improve the accuracy and efficiency of the invoice processing workflow.

READ MORE: AP Automation: Key terms you need to know

AI Automation

While basic automation can deliver significant benefits, the use of artificial intelligence (AI) takes it to the next level. AI-driven systems can handle complex tasks such as invoice validation, matching against purchase orders, and automated approval. AI can quickly and accurately analyze large amounts of data, predict future trends based on historical data, and adapt to changes without requiring manual updates. This increases efficiency, improves accuracy, and reduces the risk of fraud and errors. Automation technologies like AI and machine learning provide finance departments with a significant competitive advantage by streamlining accounting processes, reducing costs, enhancing decision-making, and freeing up time for more value-creating tasks.

The future with automation

The SEMINE platform is an AI solution that can automate between 70-90% of the invoice processing workflow using artificial intelligence and machine learning. It ensures a high degree of automation in receiving, cost distribution, and approval collection, helping to transform how businesses handle incoming invoices, cut costs, free up resources, and focus on more value-adding tasks. The solution has been on the market since 2016 and is used by 10,000+ companies.