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Document Management for Invoice Processing: A Beginner's Guide

When you evaluate a Document Management solution to automate invoice processing, you’ll have a lot of questions. This blog post describes the essential aspects of digitizing these processes. Once you have a good grasp of how accounts payable systems are automated, you’ll have the working knowledge you need to make an educated decision and choose the right solution for your organization.

What exactly should your invoice processing solution do?

IP Process DocumentYour solution should enable these key functions:

  • Capture of invoices from a scanner, MFP, email, or drag-n-drop from your desktop
  • Validation of invoices based on your defined business processes and rules
  • Review of  invoices, GL coding, and approval processes
  • Approval of  invoices by authorized personnel in your organization
  • Availability of data for download to be used as input to your accounting system
  • Mobile Access to allow authorized personnel to approve invoices from any device at any time
  •  Integration capabilities that work seamlessly within your IT ecosystem. The invoice processing automation solution should integrate across email, team portals, CRM, ERP, HR systems, and homegrown software. 

Error-proofing invoice processing

When invoice processing is completely automated, every step is well defined from data capture to approval to generating a transaction record for posting directly to your accounting or ERP system.

DM for IP Save time money headachesThe solution should trigger approval workflows based on your business rules to ensure accurate and rapid processing. It should check mandatory data, purchase orders, duplicate invoices, and onboard new vendors quickly. The system should also integrate directly with your accounting or ERP system to eliminate duplicate data entry and manual errors.

A digital invoice processing solution delivers many productivity benefits. With an automated system your accounting staff can:

  • Capture invoices using artificial intelligence. The power of our solution starts with DocuWare Intelligent Indexing, a machine learning system that understands and extracts data from any invoice. This critical index data drives workflow processes. DocuWare Intelligent Indexing replaces error-prone and time-consuming manual data entry by recognizing and recording unstructured data on invoices.
  • Automate your workflow digitally by routing documents and data for approval and post-back. Digitally route invoices through approval chains for faster decision making or initiate a straight-through approval based on predefined rules. Quickly handle exceptions while maintaining visibility throughout the process. Create a booking record for easy posting back to your ERP system.
  • Securely store and effortlessly archive and retrieve digital documents. All invoices are stored within a secure, accessible repository and are tightly organized based on captured index data. Apply retention policies, rapidly collect for audits, or analyze for departmental process improvements. Access anytime, anywhere, from any device — including mobile.

Automated workflows are the key to success

iStock-490245946Digital workflows automate, track, and report on any accounting process. A comprehensive digital workflow allows you to track a document at any stage of the process life cycle. A full range of reports enable you to see how many documents are at any given process stage.

The invoice processing workflow should automatically check for duplicate invoices and determine if a vendor is already in the system. If not, the solution should initiate an automated vendor onboarding process. This built-in verification helps eliminate fraudulent invoices and vendors.

Automation enables sharing information with anyone on your team who needs visibility into a workflow process. Every employee responsible for completing a task can view it in the office automation solution. Email updates can be sent to alert employees to new tasks in their work queues. Exceptions and escalations can be configured easily. At a glance, a manager can see what steps are complete and what remains to be done.

Protecting proprietary data is a number one priority for most organizations. Security is a big concern when documents are stored in a digital archive. Not only do strong security and backup measures ensure information recovery in the case of a disaster, but they keep unauthorized employees out and helps meet critical compliance requirements.

Invoice processing automation has a positive impact at Total Environmental & Power Systems, Inc.

TEPS pics (2)Total Environmental & Power Systems, Inc. (TEPS) is one of California and Nevada’s top telecommunications contractors, helping to build and maintain cell towers throughout that region. 

It was clear to TEPS staff that it was time to upgrade accounting workflows to an electronic system, but the final push came when they received a request from a large customer for electronic copies of TEPS material invoices to better understand the charges. In addition, almost 90% of the invoices TEPS received were digital and it just didn’t make sense to continue to print and process invoices in a paper-based format.

Read the full case study

After some research, TEPS implemented DocuWare Cloud in their accounting department. The new solution allows TEPS to offer better customer service by quickly emailing requested supplier invoices to their clients. The system is a huge time saver as well; TEPS has shaved off 20 work hours a month which were spent on tracking down payable invoices out for approval. With DocuWare in place, “approvers” who are in the field on job sites can review and approve invoices on their mobile device keeping the accounting process flowing smoothly in a timely manner.

“We found that a lot of our invoices had inaccurate job numbers. With DocuWare Cloud, we simply have our project managers look at every invoice, large and small, and make sure everything is accurate. If the job number is wrong, the approver simply makes a digital note for us to change it," said Pam Souza, Controller for Total Environmental & Power Systems, Inc. “It is very important to apply our costs to the correct job and I’m happy to say we’ve improved the accuracy of our cost accounting by 90%.”

Document Management and Workflow Automation Glossary

iStock-636097918When you venture into any foreign territory, you have to learn the language before you feel truly comfortable. The glossary below defines the frequently used terms you need to know.

Optical Character Recognition (OCR): OCR digitizes paper documents by “reading” them and converting alpha-numeric characters into a digital format.

Indexing: “Indexing” is the critical step that transforms documents into manageable information by reading key portions of data and storing each data point as an index value. These index values describe the purpose and content of the document and enable efficient searches.

Full Text Search: Is just like using a search engine on the Internet. The search terms are highlighted within the document content. The first search term found on the document is highlighted. So, you’ll be able to see directly the overall context for the search terms.

Roles and groups: A role is used to assign tasks to a job title or department rather than to a person.

Business logic: Business logic describes the part of a software program that encodes an organization’s underlying business rules to determine how data is organized and acted on.

Machine Learning: Machine learning is a subset of artificial intelligence technology. The development of computer programs that can take data and use it to learn for themselves by creating self-learning algorithms is its primary emphasis. Machine learning analyzes data then uses this “knowledge” to make the correct decision, thus eliminating or minimizing human intervention.

Redundancy: Redundancy describes the practice of duplicating data and documents to facilitate disaster recovery in cases of natural disasters or human error. For cloud software, data centers should mirror data locally and store it an instance in an off-site data center. For on-premises software, a copy of the archive should be stored off-site.

Encryption: All documents should be stored with AES, the U.S. encryption standard for documents that require a high level of security.

Public Cloud: A model in which cloud services are delivered over the Internet. The leading public cloud providers are Microsoft Azure and Amazon Web Services and Google Cloud.

Watch the webinar, How to Automate AP Processes and Improve Accountability in Just Days With DocuWare for Invoice Processing, to learn how to completely automate your invoice processes with DocuWare's preconfigured AP solution. 

 

Joan HeadshotJoan Honig is Marketing Content Manager at DocuWare. 

Topics: Paperless Office, Invoice Processing Automation

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