It is peak season, and your inbox is overflowing with invoices. The hours tick by as you manually enter information, cross-reference POs, and chase down approvals.
What if there was a technique 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 mean 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 influence this might have in your money circulate, your crew’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 give attention to what actually issues for what you are promoting.
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 information 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 larger transparency
OCR precisely extracts information from invoices, lowering handbook information entry. RPA automates workflows primarily based on predefined guidelines, eliminating repetitive duties. ML algorithms be taught from historic information to enhance information extraction and validation, whereas AI handles complicated decision-making and exception dealing with.
Automated bill processing techniques additionally seamlessly combine with current ERP and accounting techniques, enabling clean information switch and lowering the necessity for handbook intervention.
These applied sciences work collectively to create a streamlined, clever, and environment friendly AP course of. Quite than changing human workers, automation empowers AP execs to give attention to higher-value actions like monetary evaluation, danger 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 corporations have elevated over the previous years, the implementation bit normally differs primarily based on the dimensions and scale of the group.
Some companies might imagine a semi-automated method would possibly appear to be a very good start line. This sometimes 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 info right into a spreadsheet or use an OCR instrument like ABBYY FineReader to extract bill information. Nonetheless, you continue to have to validate the info, match it in opposition to POs and receipts, and route it for approval manually.
Whereas semi-automated techniques can assist scale back some handbook effort, they usually result in damaged workflows and inefficiencies. Customers might have to modify between a number of instruments or tabs, copy-pasting information from one system to a different, resulting in delays and potential errors. This method usually 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 techniques 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 information 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 information seize
Invoices are robotically captured from numerous sources, resembling e mail inboxes, provider portals, or EDI techniques. OCR know-how, just like the one utilized in Nanonets, extracts key data from the invoices, together with vendor particulars, bill numbers, quantities, and due dates. The extracted information is then validated utilizing AI algorithms to make sure accuracy.
Step 2: Knowledge validation and matching
The system robotically matches the extracted bill information in opposition to POs and receipts utilizing predefined guidelines. This course of ensures that the invoices are legitimate and correspond to precise items or providers acquired.
Step 3: Routing for approvals
Primarily based on predefined approval hierarchies and guidelines, the system robotically routes invoices to the suitable approvers.
For instance, if an bill exceeds a certain quantity or belongs to a selected division, it may be routed to the related supervisor or CFO for approval. Approval workflows will be personalized primarily based on the group’s particular necessities, guaranteeing compliance and lowering approval instances.
Step 4: Posting to ERP or accounting system
As soon as an bill is accredited, the system robotically posts the info to the built-in ERP or accounting system, resembling Oracle NetSuite, Microsoft Dynamics 365, or SAP Enterprise One.
This eliminates the necessity for handbook information entry and ensures that monetary information are at all times up-to-date. The seamless integration between the bill automation system and the ERP software program reduces errors and saves time.
Step 5: Fee processing and reconciliation
The bill automation system initiates the fee course of primarily based on the predefined fee phrases and strategies. It will probably 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 absolutely automated bill processing workflows and the way they differ:
| Course of Space | Semi-Automated Processing | Totally Automated Processing |
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| Processing Velocity | 2-3x quicker | 5-10x quicker |
| Error Charge | 1-2% error fee | <0.5% error fee |
| Value Financial savings | 30-50% value discount | 60-80% value 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 |
| Fee Accuracy | 95-98% on-time funds | >99% on-time funds |
| Audit Readiness | Hours to organize | Minutes to generate reviews |
| Audit Readiness | Days to organize | Hours to organize |
Having an automatic system ensures you’ve got real-time visibility into bill information. It empowers finance groups to make proactive choices about money circulate. For instance, they’ll establish invoices eligible for early fee reductions, optimize fee timing to maximise working capital, and rapidly handle any bottlenecks or exceptions that might delay funds. It additionally avoids giving suppliers a cause to ship a number of bill copies, which may result in confusion and duplicate effort.
These fully-automated bill processing system allow companies to streamline their AP processes. You possibly can scale back handbook effort and obtain vital value financial savings. Corporations 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 isn’t just about selecting the best know-how. To really get pleasure from the advantages of automation, it’s worthwhile to comply with finest practices that guarantee a clean 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 primarily based 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 accredited by the CFO, whereas invoices below $1,000 will be robotically accredited 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 information
To make sure clean bill matching and validation, it is essential to keep up correct vendor and PO information in your system. This contains frequently updating vendor data, resembling contact particulars, fee phrases, and tax IDs, in addition to guaranteeing that POs are created and accredited in a well timed method.
By conserving your vendor and PO information 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. Frequently 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 frequently monitor and optimize your system’s efficiency. This entails monitoring key metrics like processing instances, exception charges, and straight-through processing (STP) charges.
By constantly monitoring these metrics, you possibly can establish bottlenecks and areas for enchancment in your bill processing workflow. For instance, should you discover a excessive variety of exceptions associated to a specific vendor or bill sort, 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 give attention to options and value financial savings, procurement groups usually prioritize person expertise and provider adoption.
You should guarantee an alignment between these two numerous views. This could possibly be achieved with a cross-functional crew 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 may considerably influence your ROI.
5. Guarantee information safety and compliance
With the delicate monetary data concerned in bill processing, it is important to implement strict entry controls, information encryption, and common backups. It shield what you are promoting in opposition to information breaches and unauthorized entry.
Moreover, be certain that your bill automation answer complies with related trade laws, resembling GDPR or HIPAA. It’s essential for avoiding potential authorized points and sustaining belief along with your distributors and prospects.
Selecting an bill automation answer that’s compliant with related laws can assist mitigate safety dangers and make sure the integrity of your monetary information.
6. Deal with information high quality
Poor information high quality can hinder the effectiveness of automation. You possibly can be certain that your automated system operates effectively by implementing sturdy information 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 lets you extract information precisely and with minimal fuss. Furthermore, a few of these instruments include database matching, permitting you to complement extracted information by matching with exterior databases or instruments and including lacking information.
This may 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 might require handbook intervention. So, set up clear procedures for managing exceptions. It will probably reduce disruptions and preserve effectivity.
For instance, you would possibly create a tiered system for dealing with exceptions, with clear pointers for when to escalate points. You would additionally implement common evaluations 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 precious insights for constantly bettering your automation system.
Keep in mind, introducing any new know-how will be met with resistance. Overtly talk the advantages of automation to your AP crew, emphasizing the way it will free them from tedious duties and permit them to give attention to extra strategic work. Present thorough coaching and assist to make sure a clean transition and handle any considerations about job safety.
In contrast to normal software program implementations, bill automation impacts a number of departments and exterior stakeholders. Subsequently, lengthen your coaching to key suppliers, serving to them perceive the way to 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 just’re getting essentially the most worth out of your system.
Listed below are some key metrics to trace and the way to use them to calculate the ROI of your bill automation implementation:
1. Processing time and effectivity
- Bill cycle time: The overall 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 Charge = (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 influence of automation on accuracy.
Frequent errors to trace embody:
- Incorrect information entry
- Mismatched invoices and POs
- Duplicate funds
- Missed early fee reductions
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Error Charge = (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 influence of bill automation. This metric takes under 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 share
Observe the proportion of invoices paid on time to measure the influence of automation on fee timeliness. This metric not solely measures the influence of automation on fee timeliness but in addition displays improved provider relationships.
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On-time Fee 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 usually an missed advantage of automation. Even capturing a further 5% of obtainable reductions can considerably influence your ROI.
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Early Fee Low cost Seize Charge = (Worth of Early Fee Reductions Captured / Complete Worth of Accessible Early Fee Reductions) x 100
6. Return on Funding
To calculate the ROI of your bill automation implementation, comply with these steps:
- Decide the overall value of implementation, together with software program, {hardware}, coaching, and any consulting charges.
- Calculate the annual value financial savings achieved by way of automation, contemplating:
- Decreased labor prices on account of quicker processing instances and fewer handbook interventions
- Eradicated late fee charges
- Captured early fee reductions
- Decreased error-related prices, resembling duplicate funds or incorrect funds
- Use the next components 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 complete implementation value was $50,000 and also you achieved annual value financial savings of $75,000, your ROI can be: ($75,000 – $50,000) / $50,000 x 100 = 50%
Because of this for each greenback invested in bill automation, you are seeing a return of $0.50 within the first yr alone. Over time, because the preliminary funding is recouped, this ROI will enhance considerably.
Keep in mind, ROI is not nearly fast value financial savings. Think about the long-term strategic advantages:
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Improved decision-making: Actual-time visibility into bill information allows extra knowledgeable monetary choices.
Worker satisfaction: Eliminating tedious duties and lowering the time spent on troubleshooting and corrections results in larger job satisfaction and diminished labor turnover.
By monitoring these metrics and calculating your ROI, you possibly can reveal the tangible worth of bill automation to stakeholders and make data-driven choices about future enhancements and investments.
Selecting the best automated bill processing answer
With so many automated bill processing options accessible in the marketplace, it may be difficult to find out which one is the very best match for what you are promoting. Every answer provides completely different options, capabilities, and pricing fashions, making it important to fastidiously consider your choices earlier than making a choice.
That can assist you navigate the choice course of, listed below are some key elements to think about when selecting an automatic bill processing answer:
1. Performance and options
Begin by assessing your present bill processing workflow and figuring out the precise ache factors you wish to handle with automation. Then, search for an answer that gives the options and capabilities that align along with your wants.
Some key options to search for embody:
- OCR and information seize accuracy
- Bill matching and validation
- Approval workflow customization
- ERP and accounting system integration
- Reporting and analytics
- Cellular accessibility
2. Ease of use and person expertise
The success of your bill automation implementation largely depends upon person adoption. Search for an answer with a user-friendly interface and intuitive navigation to make sure that your crew can simply be taught and use the system.
Think about 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 along with your current ERP, accounting, and different enterprise techniques. This ensures that information flows easily between techniques, lowering handbook information entry and errors.
Search for options that provide:
- Pre-built integrations with common ERP and accounting techniques
- Open APIs for customized integrations
- Safe information switch and synchronization
4. Scalability and suppleness
As what you are promoting grows and evolves, your bill processing wants might change. Select an answer that may scale with what you are promoting and adapt to your altering necessities.
Think about elements like:
- Quantity-based pricing fashions
- Modular structure for including or eradicating options
- Multi-entity and multi-language assist
- Customizable exception dealing with workflows
- Assist for numerous bill codecs and languages
5. Safety and compliance
With the delicate monetary information concerned in bill processing, safety and compliance are non-negotiable. Search for an answer that prioritizes information safety and adheres to related trade laws.
Key safety and compliance options to search for embody:
- Position-based entry controls
- Knowledge encryption and safe storage
- Common safety audits and certifications (e.g., ISO 27001, SOC 2)
- Compliance with laws like GDPR, HIPAA, and PCI DSS
6. Buyer assist and coaching
Implementing an automatic bill processing answer 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 way 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 information extraction that improves over time
- Anomaly detection to flag potential fraud or errors
- Predictive analytics for money circulate administration
- Automated coding and categorization of bill line gadgets
- Automated invoice-PO matching
8. Provider adoption assist
Getting suppliers on board with new bill submission strategies will be difficult. Search for options that provide:
- Provider onboarding instruments and sources
- A number of choices for bill submission (e.g., portal, cloud storage, e mail, EDI) to accommodate numerous provider capabilities
- Provider efficiency analytics to trace adoption and establish areas for enchancment
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Evaluating common options out there
That can assist you get began along with your analysis, this is a comparability of some common automated bill processing options:
| Software program/instrument | Finest for | Pricing | Free trial |
|---|---|---|---|
| Nanonets | SMBs & Enterprises in search of superior automation utilizing AI | 500 pages free, then $0.3/web page | Sure |
| Airbase | Corporations in search of an entire spend administration platform with AP automation options | Customized pricing | No |
| BILL | Self-employed & small companies | Begins from $45/month/person | No |
| Stampli | Small & mid-sized companies with a give attention to collaboration | Customized pricing | No |
| Tipalti | Managing world funds & complicated tax necessities | Begins from $129/month | Sure |
| Ramp | Startups and small companies in search of a free AP automation instrument | Begins from $0/month/person | 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/person | Sure |
| SAP Concur | Massive enterprises that use SAP ERP techniques and need tight integration | Customized pricing | No |
The right way to implement automated bill processing in what you are promoting
Begin the method by assessing your present bill workflow, figuring out ache factors, and setting clear, measurable objectives aligned along 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 primarily based on the elements we recognized within the earlier part. When you full the acquisition, kind a cross-functional crew, together with members from AP, IT, and procurement, to plan the implementation.
Talk about with the software program vendor to create a timeline for information 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 the way to implement AI bill processing utilizing Nanonets for example:
Step 1: Join Nanonets and log in to your account.
Step 2: As soon as you’ve got signed up and logged in, navigate to the ‘Workflows’ part. Select the pre-built AI bill processing mannequin.
Step 3: Configure approval guidelines and levels primarily based in your necessities. Assign approvers to overview 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 on.) or import recordsdata from completely different sources resembling e mail or cloud storage like Google Drive, OneDrive, or Dropbox. You possibly can even automate bill seize from designated e mail inboxes
This is a fast demonstration of how Nanonets extracts key information from a pattern bill
Step 5: The AI mannequin robotically extracts essential data resembling vendor particulars, line gadgets, and totals with distinctive accuracy. Assessment the extracted information and make obligatory changes. Every correction you make improves mannequin efficiency.
Step 6: Configure the automated export and real-time synchronization of accredited invoices to your accounting software program or ERP. Nanonets integrates with QuickBooks, Xero, SAP, and extra. You can even manually obtain the info in numerous codecs or share it straight with crew members. You possibly can even robotically create journal entries in your accounting software program or replace stock ranges primarily based on invoiced gadgets.
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 information extraction, even for complicated bill codecs
- Steady studying and enchancment primarily based on person suggestions
- Sturdy safety measures, together with SOC-2 certification and GDPR compliance
- Versatile integration choices with current accounting and ERP techniques
- Prebuilt AI bill processing mannequin that precisely extracts key data fields, resembling vendor names, bill numbers, and totals, out-of-the-box
- Customizable AI fashions that may be educated in your particular bill codecs and information necessities
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Keep in mind, profitable automation is not nearly know-how – it is about reworking your complete method to bill processing. Be ready to adapt your workflows to totally harness the ability of your new system.
Whereas automation will deal with most invoices, exception administration stays essential. Guarantee your crew is provided to effectively deal with these circumstances, utilizing every occasion as a possibility to additional improve the system.
Nice product and buyer assist. – 10/10 would suggest!
“Nanonets is ready to reference our vital checklist of distinctive product strains and assign them to the proper GL in Quickbooks and different techniques. All whereas sustaining above 90% accuracy with out our crew having to the touch something. It has saved us numerous hours of knowledge entry.”
— Kale F., Director of DVM Workplace, in a overview on G2.