Manual Invoice Processing

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Manual Invoice Processing

Even though technology for invoice automation has long existed, many companies are still processing their invoices manually. The route of invoices and how they are handled may vary in different organizations but in most cases, this process is broken down to several steps.

First of all, the invoices arrive or are created at the company. They may by physical – received and sent by postal mail, fax or delivered, and digital - by e-mail, downloaded, etc. Received invoices are then typically transferred to the accounts payable department.

Secondly, the invoices are classified into categories defined by the organization. For instance, inward and outward invoices, inland and international invoices, proforma and final invoices, recurring/automatic bills, etc. Invoices that are associated with purchase orders will need to be matched against their corresponding purchase order. In certain cases, approval of specific invoices may be needed as well.

Once the invoices have been classified, they need to be validated. This process includes the personal verification and validation of invoice data, such as the vendor name, address, description, PO number, account number, amount to pay, discount amount, tax amount, etc. The validated and verified invoice data now needs to be entered into the organization's accounting software system.

This simplified description, of course, does not accurately cover the entire invoice handling process. There can be great variations, depending on the company type and size, as well as adopted invoice processing methods. The manual processing of invoices can be very slow and expensive, especially in large companies, or in certain business types. Additionally, archiving physical invoices may require a lot of storage space.

Learn about the benefits of invoice automation