Purchase to pay / Invoice processing - brief / Invoice processing

Invoice processing

Invoice processing is an administrative process often cited as a paragon of digital transformation. For many companies, it stops at receiving and processing digital invoices. Whereas it is with automated invoice processing that real gains are made.

Digital invoice processing

The document that serves as an obligation to pay, the invoice, has been used for as long as people have been trading (economically) with each other. From the time societies became entirely dependent on agriculture, within the walls of temples in kerchiefs, and later in clay tablets, it was marked who had bought who, when and what.

Today, invoice processing refers to the process of coding, validating and approving invoices sent by suppliers after delivery of goods or services. Invoices are no longer recorded in clay tablets, and the paper invoice is also increasingly disappearing from the picture. The paper invoice has essentially given way to the digital invoice, often in the form of a PDF file.

The digital invoice is presented in a supplier portal or sent by e-mail, after which it is processed by the accounts payable department.

Invoice processing and procurement

Digital invoice processing refers primarily to the digital form in which invoice information is stored. Automatic invoice processing refers to an automated process of receiving, coding, validating, approving and archiving invoices.

Achieving straight-through processing requires collaboration with suppliers and procurement. The success of achieving more efficient invoice processing lies primarily in the drive for continuous improvement of the purchase-to-pay process. Manual exception management is fine, as long as the number of exceptions is reduced. 

Automatic invoice processing

Invoice processing starts with invoice receipt. An automated invoice processing process requires invoice information to be available in the form of data. Incoming invoices can be converted to a data file using OCR software. To automate invoice receipt as well, e-invoicing offers a great solution. With this, invoices are delivered directly by suppliers, or by an intermediary, as a data file. 

In the form of data, invoices can be automatically coded, validated and approved with invoice processing software. Through workflow automation, invoices can be submitted to budget holders for approval. But invoices can also be automatically approved by matching invoices with sources such as purchase order (see three-way matching). Key benefits of automated invoice processing:

• Reduced operational costs: Manual work is performed automatically. Only the exceptions are submitted (automatically) to employees and/or suppliers.
• Compliance: The process from receipt to posting for payment is recorded and is very easily retrievable.
• Supply chain management: real-time visibility into invoices being processed or already processed allows suppliers to be paid faster. 

Invoice processing software

For administrations with an international scope, tens of thousands of suppliers and multiple ERP systems, it's safe to say that Basware is the standard for automatically encoding, matching and archiving invoices. Automatic invoice processing is only possible if the information on the invoice is correct.

Before invoices are coded and matched, we apply invoice validation to ensure the quality of invoices and thus automation.

To relieve the accounts payable department of calls asking about the status of an invoice, we offer an online portal that allows suppliers to query invoice status.

Of course, these solutions must be linked to accounting programs and/or ERP system(s) through systems integration.