What is Invoice Processing?

Invoice Processing Software uses OCR data capture technology and page layout analysis to automatically identify the common data elements in an invoice, such as vendor, date, amount, invoice number, line item data, etc.. Invoice Processing applications are built using the same technology as other data extraction applications, but have been specifically configured to recognize Invoices since they are one of the most common documents that companies need to automate.

Who can benefit from Invoice Processing software?

Data Capture Forms OCRAny organization that receives a large number of vendor invoices on paper can benefit from invoice processing technology. The more data from each invoice that you are hand-keying into your accounting software the more benefit you can get from each page you automate.

Accounting firms and other companies that do outsourced accounts payable processing stand to gain the most return on investment from automation. It also has the benefit of on-shoring the data entry, providing additional security and piece of mind to your customers.

A robust invoice processing solution becomes justifiable when you have over 1,000 invoices per month. When dealing with smaller volumes the potential return on investment does not justify investment in an enterprise solution. However, a simple document scanning solution to digitize and store scanned invoices can still provide many benefits.

How does it lower the cost of AP processing?

There are many benefits to invoice systems when it comes to AP processing that give these systems a very high return on investment.

  • Automate data entry tasks
  • Eliminate data entry errors with validation rules and improved UI
  • Automate retrieval of invoices from vendor websites or email
  • Assign Profit Centers and GL Codes based on business rules
  • Match invoices against open POs
  • Validate quantities and prices
  • Faster turnaround for early payment discounts
  • Electronic document management saves on storage and retrieval

How much do Invoice Processing systems cost?

The total cost of a invoice processing solution includes several items:

  • Cost of the software
  • Time to install and configure the software
  • Training the software to recognize your particular vendors and invoice formats
  • Configure data export to your accounting solution
  • User and administrator training
  • Labor required to verify the recognition results
  • IT infrastructure and maintenance costs

If you have an IT staff that is familiar with document scanning and applications, it is possible to do much of the configuration and maintenance in-house. However AP invoice processing involves a lot of specialized knowledge that can only be gained with years of experience implementing these systems. Any invoice processing solution will require Consulting Services to guide you through the implementation.

Contact Us to get a professional analysis of your project requirements and a full time and cost estimate.

What is the typical invoice processing workflow?

The process of converting a paper invoice to live data in your accounting system is as follows:

OCR Invoice Processing Workflow

  • Paper invoices are scanned; electronic invoices are imported from email or a hotfolder
  • Document text is recognized with or extracted from electronic documents
  • Automatic separation splits multi-invoice PDF files and handles attachments
  • Classification matches the invoice to its vendor
  • Trained vendor template locates field regions on the invoice
  • Identified regions are re-recognized with field-specific settings
  • Business rules are applied to check the results and flag unexpected values for validation
  • Fields with errors or validation flags are presented to an operator for verification
  • Once all errors are corrected, data is exported to a file, database or API
  • Corrections made in verification are used by AI to train and update vendor invoice templates
  • Exported data flows to ERP software via API, database, SimpleQB, or robotic process automation

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What Invoice Processing Platforms are Available?

These application suites offer packaged invoice processing solutions. Check out SimpleIndex for basic invoice processing where line item capture is not required. FlexiCapture and PaperVision Capture offer complete invoice processing with line items, business rules, AI-based training, and other features listed here.