What is Electronic Invoice Processing?
Electronic invoicing, also known as e-invoicing, invoice automation, or digital invoicing, is when a vendor bills a customer online rather than through the mail. Typically, customers receive invoices through a secure online portal or email address. Electronic invoice processing programs are often driven by customers who request that their vendors send their invoices to them electronically to make it easier for companies to process them.
The information found on an electronic invoice is the same as traditional invoices and includes:
- Invoice number
- PO number (if applicable)
- Customer and seller contact information
- Purchased goods or services
- Amount due
- Payment due date
- Payment methods
With the right tools, digitizing invoice data makes it easier to match it against contracts, bids, purchase orders, and vendor receipts; can reduce the risk of errors; and it creates a digital paper trail that is organized and streamlined.
How Does Electronic Invoice Processing Work?
Electronic invoice processing converts traditional paper invoices to a digitized format. Using AP automation software, such as PaperTrl, customers can securely log in to view invoices. The software scans the invoice to extract the key text and digitizes it so it is in an electronic format. Once in that format, the customer has easy access to the invoice data.
For the customer, their accounting staff, purchasers, and leadership can access the invoice by logging into the software to approve the invoices, code the line items to specific general ledger accounts, and apply payment.
Electronic invoice processing aims to save electronic records of every invoice for future use and reference. Electronic invoice processing software, like PaperTrl, also provides validation to help prevent errors. For example, it automatically flags duplicate invoices to prevent overpayment and ensures invoice amounts don’t exceed the amount specified in the related contract or purchase order. The system also enables users to monitor project budgets associated with invoices to provide better visibility into profitability and control overspending.
E-Invoice Processing Benefits
For vendors, electronic invoicing helps to speed the delivery and processing of invoices, reducing the time it takes to track and make important payments. The software also keeps accurate electronic records and provides visibility into the status of invoices.
For customers, electronic invoice software allows users to process invoices anywhere, anytime removing the reliance on paper and manual processes. Approvals, coding, and PO matching are all done online helping you speed processing, and payments can be planned to take advantage of discounts.
Some other key benefits include:
- Enforce expense policies
- Store invoices in one place for reports and audits
- Manage cash flow
When it comes to running your business, efficiency is key. Electronic invoice processing is designed to save both small and large businesses the time-consuming struggle of managing paper invoices. And the best part is, with a tool like PaperTrl, you minimize the potential for human error, reduce processing time, and seamlessly integrate the process with your existing AP process.
See How PaperTrl Can Help with Invoice Automation
From procure to pay, PaperTrl automates the AP process, helping businesses of all sizes simplify and streamline review and approvals, reduce processing time and associated costs, and minimize the potential for human error. Learn more about PaperTrl and contact us for a free demo.