What is touchless invoice processing in accounts payable?
Invoice processing in accounts payable can be tedious and time-consuming administrative work that bogs down on your company’s AP staff.
The lack of accuracy and transparency from manually processing each individual invoice could also lead to an addition of costs both visible and hidden, such as late payment fees.
However, with technology that enables a zero touch invoice processing workflow, this could be mitigated by eliminating manual touch points in the process.
Touchless invoice processing saves time and money and enables you and your team to turn your attention to more complex tasks that actually require a human touch.
The term ‘zero touch’ means eliminating human intervention or touch points in a given workflow. Hence, zero touch invoice processing, or touchless invoice processing is defined as invoice processing automation for a more streamlined workflow.
The ideal outcome in touchless invoice processing is to get rid of as many manual touchpoints as possible to not only speed up your accounts payable process but also to minimize human errors for better accuracy.
In the traditional invoice processing workflow, your process is likely to take these steps:
• Receiving an invoice
• Extracting information and reviewing the invoice
• Approval of the invoice
• Recording the invoice
• Payment is made for the invoice
Each step of the invoice processing workflow is riddled with manual touches.
For example, when extracting information and reviewing an invoice, it is likely that your AP staff will have to record and validate things such as vendor identification, the quantity of purchase from each individual invoice.
This makes the process quite tedious and prone to errors. It is likely that some invoices are not checked correctly, or data from the same invoice could be re-entered twice by two different people on your team.
With touchless invoice processing, there is no longer a need to worry about these errors in your invoice processing in accounts payable.
Touchless invoice processing has also gotten more popular in the age of remote work, where it becomes crucial for remote workers in your AP team to be able to collaborate from anywhere without having to worry about miscommunication.
You will be able to save a lot of time by using invoice processing automation, automating your entire purchase-to-pay process from anywhere.
In a 2019 study by PYMNTS, it is estimated that over 70% of companies who automate their B2B processes look for benefits such as reductions in errors and processing costs, as well as indications of where to better allocate their resources.
In short, most companies understand that eliminating manual processes through touchless invoice processing could lead to a lot of costs saved up, which could then lead to better budgeting and more efficient cash flow.
Some benefits of zero touch invoice processing include:
Tracking your company’s financial data in real-time will provide better transparency and accuracy of your financial health. This is crucial so as to not let any leakage of costs happen to your business.
With invoice processing automation, you can easily track every payment made and see how that reflects in your company’s books.
Paper invoices are a hassle that comes with many risks. They could easily get misplaced or lost, and sorting through them takes up a lot of your time.
Moreover, manual data entry also leads to the possibility of errors, such as duplicate invoice information entering or even missing some.
If your company has hundreds of invoices to process at a given time, you may need to hire more data entry personnel, which is another cost you can eliminate with touchless invoice processing.
You can achieve a more streamlined workflow using touchless invoice processing.
By automating approval checks, you no longer need to go through each invoice one by one and can simply send it for approval from the designated approvers after each invoice has been automatically validated.
Approvers can then automatically approve the invoice based on predetermined criteria and parameters.
Invoices often need to be matched two or even three-way to ensure that there are no errors in the invoice itself.
Prior to that, you will also have to enter information from your invoices into your system. Doing this via manual data entry will cost you a lot of time, and even more so if there are errors in the process.
Touchless invoice processing takes away the tedious work of repetitive data entry and ensures fewer invoice processing errors, while also being able to match your invoices with purchase orders (PO) and receipts.
Invoice processing automation software allows you to easily add new suppliers to your list of vendors to speed up recurring payment processes.
This means that you don’t have to enter your suppliers’ information every single time you want to make a payment.
Invoice processing in accounts payable becomes faster and easier to do, making it possible for you to even process supplier invoices earlier for early payment discounts.
Having lost or misplaced invoices or even errors that you need to double-check during your invoice processing means that you could be losing time and even delaying your AP processes.
This means that there is a possibility that there could even be a delay when making your vendor payments. Zero touch invoice processing ensures that there are no delays, which in turn guarantees that you won’t get any late payment fees.
To put it simply, the key to designing your invoice processing in accounts payable to be zero touch is to determine which areas have the most manual touch points and eliminate them to optimize the automation process.
When you get to the stage where there are no unnecessary human interventions in your processes, then you have successfully designed a touchless invoice processing workflow.
Invoice processing automation aims to erase any unnecessary steps or disruptions in the invoice processing workflow.
To achieve touchless invoice processing, you should first determine what your current workflow looks like, and which manual touch points exist in each step of the process.
It would then be wise to also make sure that everyone involved in the process is necessary personnel, and that only people who are responsible for your company’s AP processes and approvals are involved.
Data entry is a tedious administrative task that traditionally is still done manually, but having zero touch invoice processing will remove the burden of data entry as a manual task and instead replace it with automation software.
Software that supports invoice processing automation will read data from your invoices and validate them through automated checks based on predetermined rules. Only invoices that have been validated will go through for approval.
To support your touchless invoice processing workflow, you will have to, first of all, invest in the necessary AP automation software.
It’s a good idea to invest in software that supports an expense management system to see how your invoice processes and payments reflect in the company’s overall expenses.
After all, the desired outcome of invoice processing automation is to keep track of your finances to ensure that it is healthy.
Three-way matching can be achieved by automating invoice processing in accounts payable.
Having this feature in your AP automation software means that invoices that are received can be automatically matched to supporting documents such as purchase orders and receiving documents.
This makes the process overall faster and easier than manual matching, as it ensures that all the documents can be matched regardless of remote working, where documents could otherwise be stored in many different locations.
An automated approval workflow will not only speed up the invoice processing workflow but also provide you with complete visibility.
Only invoices that have fulfilled their predetermined requirements will be moved up into the approval stage, and with automated approvals, you can see which invoices have been approved as well as why they may not have been approved.
Each company has a different set of parameters and rules for its workflows. It is important that your AP automation software has the ability to customize approval policies according to your company’s needs for its invoice processing.
Design and map out your own parameters from invoice validation before the approval stage all the way to automatic approval to approvers of more complex invoice payments.
E-payments will make touchless invoice processing even smoother, as it is beneficial to have the whole purchase-to-pay process entirely automated.
E-payments happen in real-time and provide immediate checking, giving you complete visibility. Processing your payments in this way rather than manually also eliminates the possibility of fraud, such as having to deal with false checks.
AP automation software that provides you with accounting integration is a must-have. It ensures that any payments that you have made to your vendors are automatically synced and integrated into your company’s books.
Gone are the days of having to manually enter your transactions. With accounting integration, you can achieve zero touch invoice processing from receiving the invoice all the way to recording it in your books.
However, with paper invoices or digital files such as PDFs and emails that may be scattered in different places, there is always the possibility that some might go missing or are misplaced.
Having a digital audit trail makes sure that all your records are secure and available in one place whenever you need them.
The goal of touchless invoice processing is ultimately to better allocate your resources. Having complete, real-time visibility of your financial data will help you achieve this.
Your AP automation software should be able to feed you with insights into your financial data in real-time, notifying you of things such as when money is spent on what and which spendings are the highest and lowest.
Touchless invoice processing can help your business flourish by cutting down time and cost on manual work so you can redirect your resources elsewhere which may be more appreciated.
Optimization is key to utilizing zero touch invoice processing to your business's advantage. With the help of AP automation software like Volopay, invoice processing automation becomes easier than ever.
Upload, record, and validate your invoices, approve scheduled payments, and send money to your vendors on time or early for a discount price.
Minimize error and eliminate tedious administrative tasks to cut down costs and time spent on invoice processing in accounts payable. With Volopay, touchless invoice processing is at the tips of your fingers.