It is peak season, and your inbox is overflowing with invoices. The hours tick by as you manually enter knowledge, cross-reference POs, and chase down approvals.
What if there was a approach to break away from this cycle of inefficiency and cut back your bill processing time by greater than 5 occasions?
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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 affect this might have in your money circulation, your group’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, cut back errors, and speed up the approval course of. Greater than doing issues quicker, it is about gaining management, visibility, and the flexibility to concentrate on what really issues for your corporation.
On this complete information, we’ll discover the basics of automated bill processing; its key elements, advantages, and greatest practices for implementation.
What’s automated bill processing?
Automated bill processing is a system that makes use of superior applied sciences to streamline all the accounts payable (AP) workflow, from knowledge seize to approval and fee.
By automating bill processing, organizations can:
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– Save prices and cut back handbook labor
– Enhance accuracy and cut back errors
– Speed up processing occasions and fee cycles
– Improve visibility and management over bill standing
– Guarantee higher compliance and audit readiness
– Guarantee well timed funds, cut back disputes, and supply better transparency
OCR precisely extracts knowledge from invoices, lowering handbook knowledge entry. RPA automates workflows based mostly on predefined guidelines, eliminating repetitive duties. ML algorithms study from historic knowledge to enhance knowledge extraction and validation, whereas AI handles advanced decision-making and exception dealing with.
Automated bill processing methods additionally seamlessly combine with present ERP and accounting methods, enabling clean knowledge switch and lowering the necessity for handbook intervention.
These applied sciences work collectively to create a streamlined, clever, and environment friendly AP course of. Reasonably than changing human staff, automation empowers AP execs to concentrate on 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 could be automated with present know-how. Whereas the adoption throughout firms have elevated over the previous years, the implementation bit often differs based mostly on the scale and scale of the group.
Some companies might imagine a semi-automated strategy may seem to be a very good place to begin. This sometimes entails a mixture of handbook processes, spreadsheets, and fundamental automation instruments. For instance, you may obtain invoices by way of e-mail, then manually enter the information right into a spreadsheet or use an OCR instrument like ABBYY FineReader to extract bill knowledge. Nevertheless, you continue to must validate the information, match it in opposition to POs and receipts, and route it for approval manually.
Whereas semi-automated methods might help cut back some handbook effort, they typically result in damaged workflows and inefficiencies. Customers may have to modify between a number of instruments or tabs, copy-pasting knowledge from one system to a different, resulting in delays and potential errors. This strategy typically 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 methods 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 knowledge seize to fee processing, inside a single, built-in platform.
This is a better take a look at how fully-automated bill processing works:
Step 1: Bill receipt and knowledge seize
Invoices are mechanically captured from numerous sources, comparable to e-mail inboxes, provider portals, or EDI methods. OCR know-how, just like the one utilized in Nanonets, extracts key info from the invoices, together with vendor particulars, bill numbers, quantities, and due dates. The extracted knowledge is then validated utilizing AI algorithms to make sure accuracy.
Step 2: Information validation and matching
The system mechanically matches the extracted bill knowledge in opposition to POs and receipts utilizing predefined guidelines. This course of ensures that the invoices are legitimate and correspond to precise items or companies acquired.
Step 3: Routing for approvals
Primarily based on predefined approval hierarchies and guidelines, the system mechanically routes invoices to the suitable approvers.
For instance, if an bill exceeds a specific amount or belongs to a selected division, it may be routed to the related supervisor or CFO for approval. Approval workflows could be custom-made based mostly on the group’s particular necessities, making certain compliance and lowering approval occasions.
Step 4: Posting to ERP or accounting system
As soon as an bill is accredited, the system mechanically posts the information to the built-in ERP or accounting system, comparable to Oracle NetSuite, Microsoft Dynamics 365, or SAP Enterprise One.
This eliminates the necessity for handbook knowledge 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: Cost processing and reconciliation
The bill automation system initiates the fee course of based mostly on the predefined fee phrases and strategies. It could possibly additionally deal with reconciliation by matching the funds with the corresponding invoices, making certain correct and well timed fee processing.
Right here’s a fast overview of semi-automated and totally automated bill processing workflows and the way they differ:
| Course of Space | Semi-Automated Processing | Totally Automated Processing |
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| Processing Pace | 2-3x quicker | 5-10x quicker |
| Error Price | 1-2% error charge | <0.5% error charge |
| Price Financial savings | 30-50% price discount | 60-80% price 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 |
| Cost Accuracy | 95-98% on-time funds | >99% on-time funds |
| Audit Readiness | Hours to organize | Minutes to generate experiences |
| Audit Readiness | Days to organize | Hours to organize |
Having an automatic system ensures you have real-time visibility into bill knowledge. It empowers finance groups to make proactive selections about money circulation. For instance, they will determine invoices eligible for early fee reductions, optimize fee timing to maximise working capital, and rapidly tackle any bottlenecks or exceptions that would delay funds. It additionally avoids giving suppliers a purpose to ship a number of bill copies, which might result in confusion and duplicate effort.
These fully-automated bill processing system allow companies to streamline their AP processes. You’ll be able to cut back handbook effort and obtain vital price financial savings. Firms which have adopted fully-automated bill processing have reported a discount in processing prices and an enchancment in processing occasions.
Greatest practices for profitable bill automation implementation
Implementing a fully-automated bill processing system is not only about choosing the proper know-how. To really get pleasure from the advantages of automation, it’s essential to observe greatest practices that guarantee a clean transition and optimum efficiency.
Listed below are 5 key greatest practices to remember:
1. Set up clear approval hierarchies and guidelines
By clearly defining who must approve invoices based mostly on components like quantity, vendor, or division, you may make the approval course of extra environment friendly and guarantee compliance.
As an example, you possibly can arrange an approval rule that requires all invoices over $10,000 to be accredited by the CFO, whereas invoices beneath $1,000 could be mechanically accredited in the event that they match the corresponding PO and receipt. This helps stop unauthorized spending and reduces the danger of fraud.
Implementing clear approval hierarchies and guidelines can cut back approval occasions, enabling quicker processing and fee of invoices.
2. Keep correct vendor and PO knowledge
To make sure clean bill matching and validation, it is essential to keep up correct vendor and PO knowledge in your system. This contains commonly updating vendor info, comparable to contact particulars, fee phrases, and tax IDs, in addition to making certain that POs are created and accredited in a well timed method.
By preserving your vendor and PO knowledge up-to-date, you possibly can cut back the variety of exceptions and handbook interventions required within the bill processing workflow. This, in flip, helps stop delays and errors in processing.
3. Repeatedly monitor and optimize system efficiency
Implementing an bill automation system just isn’t a one-time activity. To make sure ongoing success, it is important to commonly monitor and optimize your system’s efficiency. This entails monitoring key metrics like processing occasions, exception charges, and straight-through processing (STP) charges.
By constantly monitoring these metrics, you possibly can determine bottlenecks and areas for enchancment in your bill processing workflow. For instance, for those who discover a excessive variety of exceptions associated to a selected 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 may concentrate on options and price financial savings, procurement groups typically prioritize consumer expertise and provider adoption.
It’s essential guarantee an alignment between these two various views. This may very well be achieved with a cross-functional group with members from each groups or utilizing shared KPIs that stability each their priorities.
This alignment is vital for addressing challenges like exception dealing with and capturing alternatives like early fee reductions, which might considerably affect your ROI.
5. Guarantee knowledge safety and compliance
With the delicate monetary info concerned in bill processing, it is important to implement strict entry controls, knowledge encryption, and common backups. It defend your corporation in opposition to knowledge breaches and unauthorized entry.
Moreover, be certain that your bill automation resolution complies with related trade rules, comparable to GDPR or HIPAA. It’s essential for avoiding potential authorized points and sustaining belief together with your distributors and clients.
Selecting an bill automation resolution that’s compliant with related rules might help mitigate safety dangers and make sure the integrity of your monetary knowledge.
6. Deal with knowledge high quality
Poor knowledge high quality can hinder the effectiveness of automation. You’ll be able to be certain that your automated system operates effectively by implementing strong knowledge extraction instruments and practices.
As an example, AI-powered OCR fashions higher perceive bill layouts and fields and might even course of invoices in numerous languages. It permits you to extract knowledge precisely and with minimal fuss. Furthermore, a few of these instruments include database matching, permitting you to counterpoint extracted knowledge by matching with exterior databases or instruments and including lacking knowledge.
This may cut 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 could possibly reduce disruptions and keep effectivity.
For instance, you may create a tiered system for dealing with exceptions, with clear pointers for when to escalate points. You would additionally implement common opinions of exception instances to determine patterns and potential system enhancements.
Creating clear exception-handling processes can cut back the time spent on handbook interventions, enhance consistency in problem-solving, and supply worthwhile insights for constantly bettering your automation system.
Bear in mind, introducing any new know-how could be met with resistance. Brazenly talk the advantages of automation to your AP group, emphasizing the way it will free them from tedious duties and permit them to concentrate on extra strategic work. Present thorough coaching and assist to make sure a clean transition and tackle any issues about job safety.
In contrast to common software program implementations, bill automation impacts a number of departments and exterior stakeholders. Due to this fact, prolong your coaching to key suppliers, serving to them perceive 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 making certain that you simply’re getting essentially the most worth out of your system.
Listed below are some key metrics to trace and use them to calculate the ROI of your bill automation implementation:
1. Processing time and effectivity
- Bill cycle time: The whole time from bill receipt to fee
- Contact time: The period of time spent manually dealing with every bill
- Straight-through processing (STP) charge: The share of invoices processed with out handbook intervention
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Common Bill Cycle Time = Sum of all particular person cycle occasions / Variety of invoices
STP Price = (Variety of Invoices Processed with out Guide Intervention / Whole Variety of Invoices Processed) x 100
2. Error charges and accuracy
Monitor the variety of errors per bill and the general error charge to measure the affect of automation on accuracy.
Widespread errors to trace embrace:
- Incorrect knowledge entry
- Mismatched invoices and POs
- Duplicate funds
- Missed early fee reductions
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Error Price = (Variety of Invoices with Errors / Whole Variety of Invoices Processed) x 100
3. Price per bill
Calculating the fee per bill is important for figuring out the monetary affect of bill automation. This metric takes into consideration all the prices related to processing an bill, together with labor, know-how, and overhead.
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Price per Bill = Whole Bill Processing Prices / Variety of Invoices Processed
4. On-time fee share
Monitor the share of invoices paid on time to measure the affect of automation on fee timeliness. This metric not solely measures the affect of automation on fee timeliness but additionally displays improved provider relationships.
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On-time Cost Proportion = (Variety of Invoices Paid On or Earlier than Due Date / Whole Variety of Invoices Paid) x 100
5. Early fee low cost seize
Monitor the share of eligible early fee reductions captured. That is typically an missed good thing about automation. Even capturing a further 5% of obtainable reductions can considerably affect your ROI.
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Early Cost Low cost Seize Price = (Worth of Early Cost Reductions Captured / Whole Worth of Out there Early Cost Reductions) x 100
6. Return on Funding
To calculate the ROI of your bill automation implementation, observe these steps:
- Decide the overall price of implementation, together with software program, {hardware}, coaching, and any consulting charges.
- Calculate the annual price financial savings achieved by automation, contemplating:
- Decreased labor prices on account of quicker processing occasions and fewer handbook interventions
- Eradicated late fee charges
- Captured early fee reductions
- Decreased error-related prices, comparable to duplicate funds or incorrect funds
- Use the next method to calculate ROI
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ROI = ((Annual Price Financial savings – Whole Implementation Price) / Whole Implementation Price) x 100
For instance, in case your complete implementation price was $50,000 and also you achieved annual price 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 12 months alone. Over time, because the preliminary funding is recouped, this ROI will improve considerably.
Bear in mind, ROI is not nearly speedy price financial savings. Think about the long-term strategic advantages:
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Improved decision-making: Actual-time visibility into bill knowledge allows extra knowledgeable monetary selections.
Worker satisfaction: Eliminating tedious duties and lowering the time spent on troubleshooting and corrections results in larger job satisfaction and lowered 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 selections about future enhancements and investments.
Selecting the best automated bill processing resolution
With so many automated bill processing options accessible in the marketplace, it may be difficult to find out which one is the most effective match for your corporation. Every resolution affords completely different options, capabilities, and pricing fashions, making it important to fastidiously consider your choices earlier than making a choice.
That will help you navigate the choice course of, listed here are some key components to contemplate when selecting an automatic bill processing resolution:
1. Performance and options
Begin by assessing your present bill processing workflow and figuring out the particular ache factors you need to tackle with automation. Then, search for an answer that provides the options and capabilities that align together with your wants.
Some key options to search for embrace:
- OCR and knowledge seize accuracy
- Bill matching and validation
- Approval workflow customization
- ERP and accounting system integration
- Reporting and analytics
- Cell accessibility
2. Ease of use and consumer expertise
The success of your bill automation implementation largely is determined by consumer adoption. Search for an answer with a user-friendly interface and intuitive navigation to make sure that your group can simply study and use the system.
Think about components 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 together with your present ERP, accounting, and different enterprise methods. This ensures that knowledge flows easily between methods, lowering handbook knowledge entry and errors.
Search for options that provide:
- Pre-built integrations with widespread ERP and accounting methods
- Open APIs for customized integrations
- Safe knowledge switch and synchronization
4. Scalability and adaptability
As your corporation grows and evolves, your bill processing wants might change. Select an answer that may scale with your corporation and adapt to your altering necessities.
Think about components like:
- Quantity-based pricing fashions
- Modular structure for including or eradicating options
- Multi-entity and multi-language assist
- Customizable exception dealing with workflows
- Help for various bill codecs and languages
5. Safety and compliance
With the delicate monetary knowledge concerned in bill processing, safety and compliance are non-negotiable. Search for an answer that prioritizes knowledge safety and adheres to related trade rules.
Key safety and compliance options to search for embrace:
- Function-based entry controls
- Information encryption and safe storage
- Common safety audits and certifications (e.g., ISO 27001, SOC 2)
- Compliance with rules like GDPR, HIPAA, and PCI DSS
6. Buyer assist and coaching
Implementing an automatic bill processing resolution just isn’t a one-time occasion. Ongoing assist and coaching are important for making certain the long-term success of your implementation.
Search for a vendor that provides:
- Responsive buyer assist by 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 knowledge extraction that improves over time
- Anomaly detection to flag potential fraud or errors
- Predictive analytics for money circulation 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 could 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 determine areas for enchancment
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Evaluating widespread options available in the market
That will help you get began together with your analysis, here is a comparability of some widespread automated bill processing options:
| Software program/instrument | Greatest for | Pricing | Free trial |
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| Nanonets | SMBs & Enterprises searching for superior automation utilizing AI | 500 pages free, then $0.3/web page | Sure |
| Airbase | Firms searching for an entire spend administration platform with AP automation options | Customized pricing | No |
| BILL | Self-employed & small companies | Begins from $45/month/consumer | No |
| Stampli | Small & mid-sized companies with a concentrate on collaboration | Customized pricing | No |
| Tipalti | Managing international funds & advanced tax necessities | Begins from $129/month | Sure |
| Ramp | Startups and small companies searching for a free AP automation instrument | Begins from $0/month/consumer | 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/consumer | Sure |
| SAP Concur | Massive enterprises that use SAP ERP methods and need tight integration | Customized pricing | No |
Find out how to implement automated bill processing in your corporation
Begin the method by assessing your present bill workflow, figuring out ache factors, and setting clear, measurable objectives aligned together with your broader organizational goals. Then, safe stakeholder buy-in by presenting a compelling enterprise case highlighting potential ROI and proactively addressing issues.
When selecting an answer, consider it based mostly on the components we recognized within the earlier part. When you full the acquisition, kind a cross-functional group, together with members from AP, IT, and procurement, to plan the implementation.
Talk about with the software program vendor to create a timeline for knowledge migration and system integration. This may set the stage for a profitable rollout of your new automated bill processing system.
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This is implement AI bill processing utilizing Nanonets for instance:
Step 1: Join Nanonets and log in to your account.
Step 2: As soon as you have signed up and logged in, navigate to the ‘Workflows’ part. Select the pre-built AI bill processing mannequin.
Step 3: Configure approval guidelines and phases based mostly in your necessities. Assign approvers to evaluate 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 comparable to e-mail or cloud storage like Google Drive, OneDrive, or Dropbox. You’ll be able to even automate bill seize from designated e-mail inboxes
This is a fast demonstration of how Nanonets extracts key knowledge from a pattern bill
Step 5: The AI mannequin mechanically extracts essential info comparable to vendor particulars, line gadgets, and totals with distinctive accuracy. Evaluate the extracted knowledge and make needed 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 information in numerous codecs or share it instantly with group members. You’ll be able to even mechanically create journal entries in your accounting software program or replace stock ranges based mostly on invoiced gadgets.
By following these steps, you possibly can implement an automatic bill processing system that provides quite a few advantages:
- No-code platform, making it accessible to non-technical customers
- Extremely correct knowledge extraction, even for advanced bill codecs
- Steady studying and enchancment based mostly on consumer suggestions
- Strong safety measures, together with SOC-2 certification and GDPR compliance
- Versatile integration choices with present accounting and ERP methods
- Prebuilt AI bill processing mannequin that precisely extracts key info fields, comparable to vendor names, bill numbers, and totals, out-of-the-box
- Customizable AI fashions that may be skilled in your particular bill codecs and knowledge necessities
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Bear in mind, profitable automation is not nearly know-how – it is about reworking your total strategy to bill processing. Be ready to adapt your workflows to completely harness the ability of your new system.
Whereas automation will deal with most invoices, exception administration stays essential. Guarantee your group is provided to effectively deal with these instances, utilizing every occasion as a chance to additional improve the system.
Nice product and buyer assist. – 10/10 would suggest!
“Nanonets is ready to reference our vital record of distinctive product traces and assign them to the proper GL in Quickbooks and different methods. All whereas sustaining above 90% accuracy with out our group having to the touch something. It has saved us numerous hours of knowledge entry.”
— Kale F., Director of DVM Workplace, in a evaluate on G2.