Data extraction from invoices is called invoice capture, a crucial step in the accounts payable process. However, an AP department faces several difficulties if traditional capture procedures are not adequately managed. Automation allows for effortless recording, automated coding, and sped-up approval and payment procedures, resulting in best practices for invoice capture. In this article, we discuss the difficulties with invoice capture today and how automation might speed up the payment of invoices.
The act of taking data from an invoice and inserting it into an enterprise resource planning (ERP) system so it can be processed is known as invoice capture. Invoices can be delivered to businesses in various ways, such as electronically via email, physically through the mail, or via fax.
The data from the invoice must be entered into an ERP system for bookkeeping, regardless of how the invoice gets to the AP department. Therefore, the details from each invoice must still be manually entered into the ERP system for several departments as part of the capture process.
A tangible paper copy of the invoice would need to be moved manually from desk to desk to be approved. If there are few bills or the firm is tiny, this might not be a problem, but if there are many invoices to process, it can be time-consuming, complicated, and prone to mistakes and late payments.
Other invoice capture methods include employing an EDI (Electronic Data Interchange) system, which enables suppliers to send invoices directly to the ERP system or allows invoices to be quickly scanned and submitted automatically.
Why Is Invoice Capture So Important?
An organization needs to capture all the information from the invoice and record it for further use. Errors in capture result in errors in processing, payments, record keeping, and other areas. And this might lead to issues with vendors receiving payment appropriately and on time, leading to tense supplier relations.
Data entry errors are far more likely when invoices are manually entered. When the same invoice is resent due to nonpayment, delays in invoice capture can result in duplicate invoices. Additionally, until the problem is remedied, cash flow may suffer if duplication results in double payment. As invoices arrive in various formats—some online, some via the mail—they are all entered into the same system for centralized processing when they are captured.
Because accurate data and prompt processing of bills are crucial and can affect a company’s bottom line, invoice capturing is critical.
Invoice Capture Methods
1. Manual Data Capture
Manual data entry is the most time-consuming and fundamental way of invoice data acquisition. Although data entry by hand may appear inexpensive, the long-run cost is substantially higher. Additionally, it gives room for faults and mistakes to happen.
OCR, often known as optical character recognition, is one of the most used technologies for more rapid invoice data collection. From files in a variety of formats, including pdf, JPEG, tiff, and png, it extracts characters, numbers, letters, and symbols. The invoice-capturing software must include an OCR. It extracts information and generates raw, unstructured data that must be organized. But it performs a lot better than hand keying.
3. Intelligent Invoice Capture
The way that invoice data capture is done has been completely transformed by machine learning and artificial intelligence. Organizing further. Combining AI, machine learning, and OCR produce the most precise and quick results. First, sort the invoices using data extraction and scanning software, then export the data as Excel spreadsheets for further processing.
4. Outsourcing The Task
Many organizations contract out the data entry for their invoices. This approach involves sending the bills to a third-party company like Profit Jets, which then delivers the provider the sorted data. We at Profit Jets extract the data primarily by hand. Technically speaking, it still requires the inconvenience of manual keying; the only distinction is that it is no longer your problem.
Benefits of Invoice Capture Process Automation
Automating the invoice capture process is the key fix, as more companies learn daily. The main concept is to automatically and immediately begin invoice capture. Additionally, utilizing a platform that automates the entire AP process—from invoice collection to payment—simplifies the workload while lowering errors, boosting efficiency and visibility, and ultimately saving money while fostering a positive supplier relationship.
Midmarket and enterprise companies can use Profit Jets’ end-to-end AP automation and payment optimization services. We can assist you with invoice capture, removing the need for manual data entry by automatically gathering and accurately coding header and line-level data. Additionally, all invoice data syncs two-way with your ERP system, maintaining your system of record. Accurate invoice capture makes invoice approval and payment authorization as simple as clicking a button, while built-in controls and two-factor authentication keep all data and operations secure.
Contact Profit Jets for professional accounting and bookkeeping services at a budget-friendly rate.