Ivalua Blog

A Guide to Automated Invoice Processing

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by Steve Carter

Automated Invoice Processing to create a top performing Accounts Payable Team.

The performance of your Accounts Payable department can have a significant impact on the organization. Recent trends have increased the strategic importance of effective, transparent Accounts Payable processes. Increased outsourcing has made businesses increasingly dependent on suppliers to drive innovation.

A recent study by Forrester found that the single greatest factor in increasing a supplier’s willingness to collaborate with and share innovations with a customer was timeliness of and visibility into payments. The Covid-19 pandemic has increased the importance of effective cash management, of which Invoice-to-Pay is a key lever.

How to get started with Automated Invoice Automation?

Before you can unlock the true potential of invoice automation, it is important to identify and remove the barriers to achieving top performance. For this, a leading analyst group, Gartner has identified that Accounts Payable must overcome a number of challenges with their AP automation 

It is not uncommon for organizations to spend time on supplier enablement without achieving a huge amount. This falls apart basically if the tool is too complicated – too many buttons to push, too many screens.  Automated invoice processing cannot happen without supplier enablement and supplier onboarding.

Step 1: Start with the Supplier Invoice or Payment Inquiry:

The first time a supplier’s credit control team contacts your AP team, they should simply email a link to the Supplier Portal with your invoice processing platform. With this the credit controller can sign-in and see the status of every invoice, importantly this is in real-time without a lag or new T&C’s. Once the supplier has signed in they stop calling you as all the information they need is on screen and you have a new email contact in the system.

Step 2: New Supplier: even in the world of no-Pay no-PO it’s possible to get an invoice from an unknown or new supplier, especially at the tail end of your spend. Therefore, when it happens our invoice processing software provides a quick and simple check to confirm the supplier and instantly update your master data, and also creates a supplier portal account for their credit controllers.

Step 3: Master Data Update: within the Ivalua Supplier Portal the credit controllers can update their view of your master data, and confirm changes. With this, and the right process, finally you can keep your master data in sync with the supplier, something the Hackett Group estimates could save you 50% of your costs in this area.   

Benefits of Automated Invoice Processing 

For most businesses automating invoice processing leading to efficiency gains of 70% across 60,000 suppliers would be a stretch target.  However, Credit Agricole achieved this through digital processing of invoices. 

Using invoicing software , they have unlocked the power of accounts payment and hit amazing levels of straight-through-processing. They have accomplished this by using smart matching across orders, contracts, and receipts; together with one-click workflows that manage line level allocations and tax treatment automatically.

By removing the overhead of supplier queries with real-time supplier updates, the AP team can focus on innovation and real exceptions. The key to these performance levels is the embedded smart matching that uses supplier master data, orders, receipts, even contracts to automate the process for payment of invoices.

Exceptions can then be handled with one-click approval for invoices, or by simply appending the missing PO number, to complete the auto-match. With line level multi-tax treatment and budget allocation templates that reduce effort AP automation rates can reach way above 70%.

However, the real power of invoice automation is that all this matching is also available within the supplier portal linked to the Invoice Hub. That is true innovation and a level of digital invoicing transformation that is not available in every tool

Now selected suppliers can upload a PDF invoice in the free portal, check all the content is correct, append that missing PO or tag the buyer, before matching the invoice to the receipt or order. Only once all the invoice meets the tolerance policy for automation will it be accepted.

The supplier can now elect to send in a disputed invoice or load a new invoice that matches, either way the payment clock only starts when the invoice is cleared for a straight through journey. 

Continuously Improving

Having the ability to continuously improve (CI) a process is critical to achieving a return on investment and should be at the heart of all digital procurement initiatives.

This is why Ivalua provides the dashboard and performance intelligence necessary to evolve, adapt and improve your unique Invoice-to-Pay journey as standard. Unlike eInvoicing Networks, or prescriptive services, that are locked, with Ivalua you are in total control of the Invoice-to-Pay journey.

Once you have our quick start journey in place, the AP team can create new templates and processing rules, the workflow can be extended or adapted without breaking the system. 

Steve Carter

Senior Product Marketing Manager

Spanning a 30-year career, Stephen has led successful global product marketing launches alongside procurement experts and finance professionals in both the public and private sector. As a longstanding contributor in the ever-evolving sourcing industry—from early OCR—to the establishment of eInvoicing Networks, Stephen now applies his extensive tech experience to Ivalua’s unified Procurement platform. A problem solver and industry thought leader, his product positioning is central to generating long-term customer value while streamlining user experience. In software development, adaptability is the key and Steve’s commitment to the future of procurement is propelling Ivalua toward the next generation of strategic payment solutions. Outside of his professional life, Steve is a published author and 17th Century historian.

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