Electronic Invoice Processing Solutions or AP Automation Software?
Automated invoicing solutions have been gaining momentum recently. However, this has brought with it various questions for the accounts payable team. Different AP automation software brings with it different jargon and formats. This article will explain the different invoicing solutions and how to pick the right one.
Most invoice processing solutions help businesses capture invoicing data in whatever format it is received. The software captures this data and presents it through a dashboard. Finance administrators can then check the status of invoices at a single glance rather than sift through hundreds of papers.
Most automation software allows for the implementation of an approval workflow. This helps automate the task of sending out invoices to the approving authority. It also facilitates faster payouts to vendors.
What To Look For in an Automated Invoicing Solution?
When investing in an automated invoice solution, you should look for some of the key functions listed below.
Some receive invoices in paper form, and some through email. The invoicing software should be able to capture and digitize it within minutes.
All digitized invoices should be available via a dashboard. This should show the status of invoices and invoices that need immediate action (overdue, data mismatch, etc.).
Set Up Different User Roles
The invoice processing system should have different user roles defined. This helps the management decide who plays a part in the various stages of the invoice process.
The invoice processing system should also have an approval workflow that helps process invoices faster. It should support simple and complex approvals. For example, some invoices may require dual approval due to amounts surpassing a certain threshold. The admin should be able to drag and drop users in the approval workflow and set it up within minutes.
Matching Purchase Orders
The invoice processing software should match the internal and external POs received and match them with the data in the system. If the data matches, the invoice should be sent to the payment team for processing. If it needs approval, it will be sent along the approval workflow for the appropriate approvals.
The invoice processing system should also be able to archive old invoices in time-stamped folders. This helps during audits and ensures that the paper trail is never lost.
Difference Between Electronic Invoice Processing Solutions
There are various automation solutions available today. Some solutions are ideal for smaller businesses, while others are perfect for large enterprises.
Different invoice processing software provides different functions. The ones ideal for smaller companies only help with digitizing invoices, as that is the biggest hurdle for them. The solutions ideal for large business help sort invoices per location, country, and even the amounts.
What Are Cloud-Based and On-Premise Solutions?
On-premise solutions are exactly what the name suggests – they need to be implemented and handled onsite. This means the business would be responsible for the upkeep of the system.
Cloud-based solutions are implemented offsite and are not the responsibility of the business. This helps the company to focus on its operations. It also leaves the backend automated invoice processing to the cloud-based system.
Which One Should You Pick?
It all boils down to your business needs. Most businesses need an invoicing solution to take care of basic invoice data gathering and processing. Look for a solution that will help streamline your automated invoice processing and take care of your pain areas.
There are several factors to consider when looking to improve your company’s invoicing practices, whether you’re working with paper or electronic invoices. The end goal, in either case, is to automate your inventory management. This will provide you with more accurate and timely information about your stock and sales.
Be careful when deciding on a suitable option for your business’s specific needs and requirements. It can be helpful to see which options have proven to work best for others like you. Look for a solution that has a short learning curve so your employees will not struggle to learn the system.