The entirely digitalized marketplace has forced companies to be more tech-savvy, and look for less time-consuming ways in the process of implementation. Everyone dislikes the mundane and error-prone invoice processing routine that is slow and inefficient. It is like looking for a needle in a haystack when you sort, extract, and input data from an invoice manually – it is a slow and frustrating process. And, it is here that Automated Invoice Processing, which is driven by IDP, is stepping in to do away with the nightmares like that.
Yet, how does one construct a smooth AI-powered invoice processing workflow using IDP? To be precise, how is it done?
What Is Automated Invoice Processing?
Automated Invoice Processing refers to a process of handling invoices by the means of technology instead of people’s physical labor. It is a process that uses AI technology to read, understand and categorize invoices without much human involvement. Just think of a scenario where a stack of invoices is being processed correctly and quickly without a single person having to break a sweat while reading and converting the data.
Through Automated Invoice Processing, the company can not only save time, but also cut down on human errors, operating expenses, and the vendor payment cycle, thus freeing A/P departments from the luxury of laying back and enjoying the game as usual.
The Role of Intelligent Document Processing (IDP)
IPD is the underlying technology for Automated Invoice Processing. It is a machine learning-powered tech that enables robust extraction, information literacy, and retrieval of the required data from documents. A departure from a traditional scanner, Intelligent Document Processing can not only scan the words but also comprehend their meaning.
The technology behind the IDP includes ML, NLP, and OCR, which are the most commonly used hand-in-hand with document processing. Hence, it is like having a smart personal assistant that is capable of learning from data to perform the whole processing flow accurately and quicker.
Why Traditional Invoice Processing Is Outdated
Before we dive into building an AI-powered workflow, let’s talk about why traditional methods are losing their charm:
- Manual Data Entry: Slow and prone to errors.
- High Costs: More time spent means more money spent.
- Lack of Scalability: As your business grows, manual processing becomes a nightmare.
- Poor Visibility: Tracking invoice statuses manually is difficult and inefficient.
- Adherence to Compliance: Manual processing involves compliance errors that get unnoticed until it becomes too late to remedy the harm already caused.
Businesses cannot afford to rely on outdated methods anymore. The future is automated invoice processing, and IDP is paving the way.
Steps to Build an AI-powered Workflow for Processing an Invoice
Here is a step-by-step guide for creating an intelligent workflow:
Step 1: Understanding Current Process
A clear understanding of the present action is vital before such a new building. Develop a large picture flow of invoice processing as is. Identify where in the process your bottlenecks are, whether data entry, delays in approval, or errors in categorization. Knowing what is broken is the first step to fixing it.
Step 2: Choose the Right IDP Platform
Now, it’s time to find the right tool for the job. When picking an IDP platform, consider factors like:
- Scalability: Can it grow with your business?
- Integration: Can it connect with your existing software?
- Accuracy: Does it have strong NLP and OCR capabilities?
- User-friendliness: How easy is it for your employees to make use of it?
- Security: Encryption of the platform and compliance with all the necessary data privacy standards.
- Customization: Select a platform that allows you to perform your workflows the way you want, thus adjusting them to your requirements.
- Support: Prefer a product that offers a high level of technical support and updates to make your system run smoothly.
Platforms like ABBYY FlexiCapture are the best examples because besides their production-ready out-of-the-box engines, they also offer the most powerful AI tools and are capable of performing more advanced and challenging tasks.
Step 3: Set Up Automated Data Extraction
After you’ve purchased your IDP platform, create automatic data extraction. The computer will look through the bills, gather the most relevant information like invoice numbers, dates, vendors, and amounts, and group them into the right categories. Forget about manual input data because the machine does it all by itself.
Step 4: Establish Approval Workflows
Do not let any invoice wait for approval represent you. This is the automated approval workflow in which invoices are directed to appropriate persons for a quick confirmation and approval. This particular step will help to cut unnecessary delays, so the business will maintain a steady cash flow.
Step 5: Integrate with Your ERP or Accounting System
As an element of the whole integration process, the platform finding your ERP or accounting system connects to it or accounting system. This ensures the smooth flow of processed data to your financial systems without human intervention. Furthermore, the benefits include faster decision-making and improved data accuracy due to real-time integration.
Step 6: Monitor, Test, and Improve
After setting up your workflow, be keen to monitor its performance. Analytics can be used to determine the poorly performing areas and then focus your attention on them. AI-powered systems improve over time, and as a result, you should continue to train your model for better accuracy. In order to prevent your AI model from becoming dull and unreliable, the best policy is to frequently update it with new data.
Benefits of AI-Powered Invoice Processing
Switching to an AI-powered workflow with IDP offers several benefits:
- Faster Processing: AI works way faster than humans.
- Improved Accuracy: Reduced errors lead to smoother operations.
- Cost Savings: Less manual work means lower operational costs.
- Better Scalability: Your system grows with your business.
- Improved Visibility: Better tracking and reporting capabilities.
- Enhanced Compliance: Besides this, compliant regulations and standards are always met by the secure handling of all the data involved in the processes. This automation has increased the levels of agility and efficiency.
- Increased Productivity: Your crew is not spending time on manual data entry now, which is a perfect way to do it as you are now working on much beneficial activities that are strategic.
- Better Vendor Relationship: Faster and accurate processing translates into prompt payments and better partnerships.
- Data Protection: IDP solutions ensure the protection of sensitive information from breaches.
- Better Decision-Making: With real-time access to its data, the company will be able to make better financial decisions based on accurate information.
Final Thoughts
Intelligent Document Processing-powered AI invoice processing system is no longer a luxury and is requisite. Automated Invoice Processing enables companies to save time, cut costs, and maintain high accuracy. These aforementioned steps will help you to have a process that is not only easy but also a winner in the ever-changing business environment.
The growth of AI and IDP technology will surely provide more opportunities for the improvement of invoice processing. The fact that you incorporate Automated Invoice Processing today will be the factor that dictates the level of effectiveness, accuracy, and financial savings that will result. Are you ready to bring your invoice processing to the next level? Leave the heavy lifting of AI and IDP to software and do something else. When companies are rapidly embracing technology and automation, they should still not forget that today’s new world is no longer just clever but also intelligent, automated, and capable of transforming your business.
Stay in touch to get more updates & news on Buzz Feed!
