Invoice Automation: How Automated Invoice Processing Works

In the early stages of a business, manually processing invoices is manageable. However, as you scale, spreadsheets and other manual methods become impractical. Furthermore, manual processes can result in missing invoices, delayed payments, and even fraud, hurting your bottom line and damaging your vendor relationships.

So, how can you enhance your invoice management and avoid costly mistakes? And how can you improve visibility throughout the accounts payable process? By implementing an automated invoice processing solution. So, this article will look at automated invoice processing, how it works, and its benefits.

How Automated Invoice Processing Works

What is Automated Invoice Processing?

It is software used by businesses to ultimately help streamline accounts payable processes by automatically paying supplier invoices. It entails extracting invoice data from a system and seamlessly transferring it to your ERP or accounts payable system, permitting payments to be made in minutes.

In general, automated invoice processing includes the automation of:

  • Price matching.
  • Taking care of purchase orders.
  • Entering data.
  • Digital payment transfer.
  • Streamlining workflows, among other things.

An intelligent automation solution can handle efficient invoice management. The responsibility of invoice processing relies on accounts payable. The traditional method involves entering invoice data regularly, creating paper invoices, matching purchase orders, and filing indefinitely. It’s a cumbersome procedure that contributes to an inefficient environment.

In addition, invoices are received by mail, fax, email, and other means. This is why the accounts payable process needs automation. It is the next step in the manual processing process. Artificial intelligence (AI) and machine learning (ML) can help a payable department speed up the time-consuming system.

What is the Need for Automated Invoice Processing?

An average-sized business takes about 25 days to process a single invoice from receipt to payment manually. This could grow even more if the number of invoices grows in tandem with the number of manual touch points, resulting in a massive loss of time and resources for the company:

  • Manual invoice processing increases the likelihood of errors and double payments.
  • Aside from that, the threat of employee fraud and misappropriation of resources looms large over most organizations, with more than 74% of them being targets of payment scams in 2020.

These factors lead to delayed invoice processing and strained supplier relationships, eventually affecting enterprise productivity. As a result, replacing manual processes with automated invoice processing becomes unavoidable to ensure that the entire process is accurate, efficient, and error-free.

How Does Automated Invoice Processing Work?

When the accounting department receives an invoice from a supplier, the traditional method of invoice document management begins. It has been matched and approved at this point. If the invoice amount is large, additional approval is usually required.

After that, it must be entered into the system and “posted” for payment. Then payment is made. Depending on the company, the manual invoicing process can involve up to 15 steps. This is a significant amount of time, especially when dealing with multiple invoices.

Automated invoicing gets right to the point. First, the invoice is scanned and entered into the digital accounting system when it arrives. This type of data capture (also known as invoice capture) eliminates hours of manual data entry.

The invoice automation software will then transfer the data into a text-searchable document. Next, the automated management system can extract and map invoice data to remember which fields to capture and register in the ERP system.

This includes information such as the supplier’s name, the purchase amount, the quantity, and so on. After that, invoices are routed to the appropriate parties for review and approval.


There are numerous advantages to using automated invoice processing software. Following are the reasons why learning how to automate invoice processing may be beneficial to your business:

Cost Savings

One of the primary advantages of automated invoice processing is that it helps to reduce back-office costs by reducing manual effort. Simply put, your accounting team will no longer need to review each invoice manually. Instead, they can serve as a backup if your automated invoice processing software is unsure about the data that has been extracted.

Reduced Errors

Because automated invoice processing eliminates the possibility of human error, your invoices are likely to have fewer issues. In addition, reducing or eliminating late or missed payments can help improve supplier relations.

Rapid Turnaround Time

With an automated invoice processing system, your company can achieve much faster turnaround times on invoices, reducing the administrative burden on your accounting team and fostering good relationships with your suppliers.

Customer Satisfaction

A smooth and simple invoice payment process ensures positive customer interaction with each transaction.

Personalize Your Invoicing

A customer platform with your logo and branding where customers can view their invoices and transaction history and make payments while maintaining a secure, memorable, and professional environment is included in modern solutions.

Improved Utilization of Employee Time

Instead of focusing on relatively low-impact tasks like invoice processing, your employees can devote their time to higher-value activities that may benefit the business more.


Although the advantages of automated invoice processing are substantial, it is important to remember that there are some drawbacks. Most importantly, these systems that use machine learning may struggle to capture data from invoices that do not follow a standard format.

On the other hand, automated invoice processing systems are frequently extremely accurate when dealing with numeric data. However, when other elements, such as logos or graphs, are included on the invoice, the data may be less reliable. Of course, because it is such a new development, the software is improving, but remember that these systems are not infallible.

Software Solutions for Automated Invoice Processing

This software has erupted as a game changer. Technology has resulted in such significant labor and cost savings that it has restructured the accounting industry. As a result, invoice processing software, like word processing software, is considered essential by many organizations.

According to the latest report, there are approximately 3757 invoice processing applications worldwide. Consider the following factors when looking for a tool that your finance teams can use:

Unified Console

Everything is at your fingertips with accounts payable automation. Platforms are typically managed from a single dashboard, which provides control over buyers, vendors, invoicing, payments, financial data, and so on. The processing workflow should handle the following tasks:

  • Recurring billing.
  • One-time invoicing.
  • Metered, volume, and tiered charging models.
  • Subscription management.


Customers should be able to create custom workflows with tailored invoicing solutions using a superior automation platform. A smooth process reduces the number of exceptions and disputes.

To reduce system leakage, a company should implement automated exception handling. This increased compliance enables you to generate an invoice based on tasks or staff rates.

A smart software platform will also allow a company to brand itself. For example, custom logos, text, and optional extras can be used with invoicing to maintain brand consistency.

Relationship Management

Automation has been a treat for relationship management in every industry and every job role. It helps to keep people from dropping the ball. Finance is no exception.

Suppliers can see their relationship with your company thanks to invoice processing software. As a result, all parties can see payments, orders, and invoices. It also allows a company to offer a supplier several options for electronic invoicing.

Monitoring and Reporting

Because of the transparency of invoice automation, a business can easily monitor expenses and know what is spent, when it is spent, and where it is spent. Then, run insightful real-time reports to make quick business choices. The more invoice data scanned into the system, the simpler it is to spot patterns and trends.


An automated invoice processing tool enables a company to stay connected globally without the hassle of paperwork. Look for a multilingual program that takes into account country-specific VAT regulations.

The ability to sell and process products globally greatly benefits expanding operations. You can control business complexity on a global scale with an integrated solution.


Invoice processing software is a supreme tool for operations. Anyone tired of pushing paper should applaud this type of software. However, the system should also make it simple to manage transactions made with credit cards, ACH/EFT, and PayPal.

Accounts payable can use automated billing to ensure services match purchase orders and receipts. Furthermore, the platform should allow accounting to check the status of an invoice continuously, with indicators such as “in process,” “approved,” or “not paid.”

Why Choose Invensis for Invoice Processing Automation?

Invensis intelligent invoice processing solution uses Artificial Intelligence and Machine Learning to reduce data extraction errors, increase turnaround time, and provide a cost-effective way to process invoices.

You need Invensis’s end-to-end automated invoice processing solution if you need:

  • A modular solution that can adapt to any invoice template, format, layout, or style.
  • A solution that allows your accounts payable team to focus on tasks other than manual data entry, allowing you to grow your business.
  • A solution that provides unrivaled data extraction accuracy of 100 percent for key-value pairs and line items.
  • A simple solution to integrate into your system.

Invensis Technologies is an expert Accounts Payable outsourcing services provider. We are one of the leading accounts payable outsourcing companies with over 20 years of delivering end-to-end Accounts Payable services.

We offer quick and effective services that enable your organization to streamline its finance and accounting processes and achieve operational efficiencies.

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About the author

Vidya Menon

Vidya is an online content developer for Justwebworld. She has a BA in English Language and Literature and an MA in Current Linguistics. She is a passionate reader, writer and researcher with a background in academic writing.