Invoice processing is a time-consuming but necessary procedure to keep track of your business’s billing records. Many businesses have already streamlined their processess with digital invoices. Digital invoices save time by eliminating manual data entry and printing. This improves efficiency and accuracy. In this article we’ll cover what invoice processing is, how it works, and how automating this process can save you money.
What is Invoice Processing?
Invoice processing is a system that leads a company in handling incoming invoices from inception to payment completion. Often, accounts payable invoice processing uses software to help make the process easier and more accurate.
This software can create invoice templates, create codes, email invoices, and issue payment reminders. Some software offer automation and other features.
How Does Bill Processing Work?
Bill processing involves analyzing which client needs to be billed for a product or service, and designating how much the invoice should request.
A code is generated to accompany the invoice, and a payment due date is assigned.
3 Steps for Invoice Processing
Bill processing differs from company to company, but all businesses adhere to this 3-step framework:
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Receive invoice
To begin with, you’ll need to input your customer’s unique billing details such as their name, unique reference numbers (e.g., purchase order number), address information (including phone number), the date/time the transaction occurred or will occur, the amount owed by customer (changing depending on invoice), and the due date.
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Approve invoice
Once the initial check is complete, the invoice is sent to authorized personnel who review it and either deny or accept the invoice. They make sure the payments are correctly allocated to each document. You’ll want to make sure everything correctly matches up, including the correct number of products or services they’ve chosen (if applicable), as well as any specific instructions for handling their order (e.g., “Do not include in shipment”). If the invoice is rejected, it can be due to a number of factors such as discrepancies found either with the amount purchased, or the agreed-upon cost per item or etc.
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Process invoice
Whether through traditional paper methods or online invoice payment processing, the next step is to issue payment via check, wire transfer, credit cards, or check. This step is called “payment processing.” Once the payment has been collected, the invoice can then be archived following company guidelines. Some companies create copies while others use software to simply move files over to digital archives where they can be stored indefinitely.
Invoice Processing Flowchart
Many business owners now utilize invoice processing flowcharts to help the accounts payable invoice processing departments to work more efficiently. The flow charts provide more clarity among all staff in how to handle these requests.
Steps that are commonly found in flow charts are:
- Receiving, coding, and sending for approval
- Approval or rejection
- Payment authorization
- Invoice generation and payment
- Invoice archival
Automated Invoice Processing Benefits
If you want to streamline your process, automated invoice processing is the solution.
There are numerous benefits of switching to automated invoice processing. In fact, “More than 35 percent of companies earning more than $1 billion per year have already adopted accounts payable automation” (B2B Payments Tipping Points Playbook).
Automating the invoice process creates growth opportunities for small businesses and international conglomerates alike:
- Reduces operating costs
- Optimizes time
- Improves customer satisfaction and relations
Process Online Invoices Faster
On average, invoices created through the software take 2 minutes per invoice. Manual creation takes up to an average of 12 minutes. In addition to saving time creating invoices, automation saves you time in payment collection. You would no longer need to mail out invoices and checks.
Reduce Human Error
Many invoice processing automation software packages include error checks which scan data for duplicate and erroneous entries.
Cut Down on Costs
Offering digital payment collection methods with invoicing cuts costs up to 80%. This completely eliminates paper, ink, printers, stamps, envelopes, file cabinets, and other traditional expenses. Aditionally, you will save money by closing invoices faster-the longer an invoice is open, the more fees that accrue. The customer benefits from the convinience of instantly paying online via your gateway or shopping cart.
How to Automate Invoice Processing
You might create invoices digitally, but this differs from having an automated invoice processing system in place. If you would like to learn more about how to create more efficiency within your business and create higher levels of customer satisfaction, contact an invoice processing software provider. They can answer your questions and provide guidance as to what online invoice solutions will help you meet your goals.
Paysley: The Ultimate Paperless Invoice Processing Automation Solution
Invoice processing automation is here to stay. Whether you manually create paper invoices or use electronic invoicing, invoice processing automation will save you time and money. Paysley offers a robust collection of invoice processing automation options to suit your business needs at competitive rates. Benefit from solutions like paysley and enjoy features such as reminders, electronic payment collections (via secure gateways), and notification systems to handle data collection and invoicing. Let automation handle the invoice processing and get back to the core passion of your business!
Why wait? Start improving your internal systems and contact a payment processing provider today.
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