Typical Process
The process usually begins when a supplier's invoice is received. Invoices can be sent via email, postal mail, fax, or EDI. Once an invoice arrives, the accounts payable clerk must ensure that the document is indeed an invoice. Then the clerk classifies and sorts the invoice into various categories (e.g., by vendor, by transaction type, or by department). The definition of invoice categories is usually unique to a specific organization. Once the invoice is classified, it is forwarded to the AP processor who is responsible for the particular invoice. This is normally the person who has placed that order. If there was a purchase order created during procurement, the invoice must then bAutomatic process
Technology has long enabled the automation of invoice processing from arrival to post. This means that at arrival of the invoice, the same accounts payable clerk will only need to scan the invoice into an automation software. The automation software then converts the invoice's scanned image into a text-researchable document. The different fields on an invoice can also be defined into the software so that it remembers which fields it should capture and register into the ERP systems, for instance, the purchase amount, the quantity, the supplier name, the supplier code, and so on. The benefits of an automatic processing workflow may include reduced human error, on-demand reports, and dataAutomation software
Accounts payable automation is a technology-driven approach to invoice processing. According to the Document Imaging Report, issue no. 8-17-07, there are around 3757 invoice processing applications in the world.Intelligent Data Capture (IDC) or learning systems enable end users to extract content from invoices without the system having to learn the layout of the invoice. Some intelligent engines are able to correctly sort batches on the fly, locate data fields such as invoice and PO number, as well as line item information, and then extract the desired content from those data fields. Intelligent solutions do not require the coding of rules or design form templates. Rather the system learns by reviewing a relatively small number of invoice samples. This helps the system scale to large invoice volumes and widely varying document layouts without requiring a human operator to specify a template for each one, or explicitly create and tune an extensive library of keywords.Invoice processing automation software has emerged as what one consulting company has called a "disruptive innovation," whereby this new technological innovation has created a demand for a whole line of software products that previously did not exist. Invoice processing software has produced tremendous labor savings to the extent that many companies have begun to consider it an essential piece of their technology, much like word processing software. Other advantages of accounts payable automation include: * Up to an 80 percent reduction in a company's procure to pay cycle * A reduction in duplicate invoice payments and invoice entry errors * The ability to assign GL codes to invoices without direct access to a company's accounting platform.
Comprehensive invoice process management
The typical approach towards invoice management processes start from the arrival of a supplier invoice. Depending on the process design, the invoice should be identified, categorized, filed and matched against a PO by the person who was responsible for the order. After these steps the invoice is usually transferred to the financial department and the sum is paid. The problem with this process is the lack of comprehensive cost management, which should involve the following checkpoints and controlling points: · Was the person who ordered item eligible to place the order? · Was the PO approved by a responsible person? · Can the PO or invoice be linked to an existing supplier contract? Comprehensive invoice management processes, therefore, shall involve the above-mentioned checkpoints in order to ensure that no fake suppliers can issue an invoice and get paid. This has happened to tech giants, hence the danger is real and shall not be overlooked.References
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