What is automated invoice processing?

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What is automated invoice processing?

The automatic processing of invoices is achieved through automation software solutions, based on optical character recognition (OCR) technology. OCR enables the transformation of scanned images into searchable and editable digital text. Invoice processing solutions recognize symbols from scanned forms, convert them into digital text and then usually transfer the information into accounting systems. Some products are also capable of validation and classification of the extracted data.

The first step of the automated invoice processing typically begins with scanning the invoices (for paper-based documents), or importing the invoices into the automation software (for digital copies). The solution then performs OCR on the invoices - it determines where the data is located, turns it into digital text, and it might also validate each invoice field to make sure that the data is correctly recognized and filled. Users typically have control over which invoice fields are recognized and extracted. Additionally, the documents may need to be routed to the appropriate person or department in the company. Invoices may be matched against specific purchase orders. At this point, a human operator is usually needed to manually check the extracted data and approve the export of the processed invoices. Finally, the automation solution exports the data into the desired output format or feeds it directly into the organization’s accounting system.

How the process of automating invoice handling is organized, largely depends on the typical workflow of the organization that the automation solution is deployed at. The size and type of business affect how invoices are received, routed, classified and managed – and therefore have an impact on almost all steps of the process. Intelligent automation solutions should be capable of meeting the company’s needs without requiring a total reorganization of the invoice processing routine.

Read about the things you need to consider before switching to automated invoice processing.