Streamline Your Invoicing Process
with an Automated Workflow

With invoice process automation, there are no more paperwork nightmares or lost invoices. Join the league of forward-thinking businesses for smooth, hassle-free invoicing.

Streamline Your Invoicing Process with an Automated Workflow

For businesses of all sizes, invoicing is often a time-consuming and tedious process that can create headaches for both the invoicing team and the clients. However, with the advancements in technology, it’s never been easier to streamline your invoicing process and remove the manual labor involved in invoicing.

In this blog post, we’ll explore the steps required to build an automated invoicing workflow and how it can significantly improve your business process.

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Steps of Invoice Processing Workflow

Invoice processing involves several essential steps to ensure accuracy and efficiency in handling invoices. Below are the key steps typically involved in the invoice processing workflow:

  • Receipt of Invoice: The process begins with the receipt of the invoice from the vendor or supplier. The invoice can be received in various formats, including physical paper invoices, electronic invoices, or emails with attached invoices.
  • Invoice Verification: The received invoice is carefully reviewed and verified to ensure its authenticity, accuracy, and compliance with the agreed-upon terms and purchase orders. This step involves checking the invoice details, such as the invoice number, date, vendor details, line items, quantities, prices, and any applicable taxes or discounts.
  • Invoice Data Entry: After verification, the invoice data is entered into the company’s accounting or invoicing system. This step involves accurately inputting the invoice information, such as invoice number, date, due date, amount, and item details, into the accounting software.
  • Matching Invoice with Purchase Order: If the company has a purchase order (PO) system in place, the invoice is matched against the corresponding purchase order to ensure that the goods or services received match the items ordered and their agreed-upon prices.
  • Invoice Approval Process: Invoices usually require approval from relevant stakeholders within the organization before payment can be made. The approval process may involve multiple levels of authorization, depending on the invoice amount and the company’s internal policies.
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  • Coding and Account Allocation: The invoice is coded with appropriate expense codes or account numbers, allocating the expenses to the relevant cost centers or general ledger accounts for accurate financial reporting.
  • Payment Terms and Schedule: The payment terms specified in the invoice are reviewed, and the payment schedule is determined based on the agreed-upon terms (e.g., net 30 days, net 60 days).
  • Payment Processing: Once the invoice is approved, the payment is processed based on the agreed-upon payment terms. Payments can be made through various methods, such as checks, electronic funds transfers (EFTs), or online payment platforms.
  • Record Keeping and Documentation: Proper record-keeping is crucial for auditing purposes and financial management. All invoices, approvals, and payment details are documented and stored in a secure and organized manner.
  • Reconciliation: Regular reconciliation is conducted to match the invoices and payments with the company’s financial records to ensure accuracy and identify any discrepancies.
  • Vendor Relationship Management: Maintaining good relationships with vendors is essential for smooth invoice processing. Timely and accurate payments enhance vendor trust and may lead to favorable terms and discounts.

By following these steps, businesses can streamline their invoice processing workflow, reduce manual errors, and improve financial management efficiency.

Common Bottlenecks in Invoice Processing Workflow

Invoice processing workflows can encounter various bottlenecks that hinder efficiency, delay payments, and increase the risk of errors. Identifying and addressing these bottlenecks is crucial for streamlining the invoicing process. Here are some common bottlenecks in invoice processing workflows:

  • Manually entering invoice data into the accounting system is time-consuming and error-prone. It increases the risk of typos, duplicate entries, and data inaccuracies, leading to delays in processing and payment.
  • If the invoice approval process involves multiple levels of authorization or requires manual signatures, it can cause significant delays. Inefficient communication or unavailability of approvers can exacerbate the problem.
  • A lack of automation in the invoice processing workflow can slow down the entire process. Tasks such as data entry, matching invoices with purchase orders, and routing for approval can be automated to expedite the process.
  • Relying on paper-based invoices can lead to delays in receipt, distribution, and processing. Physical documents can get lost or misplaced, resulting in a lack of visibility into the invoice status.

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  • Incomplete or inaccurate information on invoices can lead to back-and-forth communication with vendors, causing delays in processing. Issues like missing purchase order numbers, incorrect billing details, or ambiguous descriptions can be common culprits.
  • Inefficient document management practices, such as storing invoices in disparate locations, can make it challenging to locate and retrieve invoices when needed, leading to delays and confusion.
  • Large volumes of invoices can overwhelm manual processing systems, leading to delays and errors. A sudden surge in invoice volume during busy periods can exacerbate the problem.
  • Limited visibility into the invoice processing workflow can result in a lack of oversight and control. Without real-time tracking, it becomes challenging to identify bottlenecks and address issues promptly.
  • Manual routing of invoices through email or physical documents can result in slow approvals and make it difficult to track the invoice’s progress in the workflow.
  • Vendors submitting invoices late or in an inconsistent format can disrupt the invoicing process and cause difficulties in processing and payment.
  • Disputes over quantities, prices, or services rendered can delay payment processing. Resolving disputes requires communication and coordination between departments, further extending the processing time.
  • Using outdated or legacy invoicing systems can hinder efficiency, limit automation capabilities, and make it challenging to adapt to evolving business needs.

To overcome these bottlenecks, organizations can consider implementing invoice automation solutions integrated with the EPR software, adopting electronic invoicing (e-invoicing), improving document management practices, and establishing clear communication channels with vendors to address issues promptly.

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Benefits of Invoicing Process Automation

Invoice automation offers numerous benefits to businesses, transforming the invoicing process from a manual, time-consuming task into an efficient, streamlined operation. Here are some of the key advantages of invoice automation.

One of the most significant benefits of invoice automation is the time saved. Manual data entry, approval routing, and paper-based processes can be replaced with automated workflows, allowing employees to focus on more strategic tasks. In addition, automated invoice processing significantly reduces the time it takes to complete the entire invoicing cycle. Invoices can be received, verified, and approved faster, leading to quicker payment processing and improved cash flow.

Manual data entry is prone to errors, leading to payment delays and discrepancies. Invoice automation minimizes the risk of human errors, ensuring accuracy in invoice data and calculations.

Automated invoice processing systems can match invoices with purchase orders and contract details, ensuring that the billed amounts are correct. This reduces the chances of overpayment or underpayment to vendors.

With invoice automation, businesses gain real-time visibility into the status of invoices in the workflow. Managers and stakeholders can track the progress of invoices, identify bottlenecks, and make data-driven decisions.

Automation allows for predefined approval workflows, ensuring that invoices are routed to the appropriate personnel for authorization promptly. This reduces delays and prevents invoices from getting stuck in the approval process.

By eliminating the need for manual paper-based processes, businesses can save on printing, postage, and storage costs associated with traditional invoicing methods. Invoice automation supports sustainability efforts by reducing paper usage. This aligns with eco-friendly initiatives and contributes to a greener environment.

Most importantly, invoice automation systems can handle a high volume of invoices, making them suitable for businesses of all sizes. As your business grows, the system can scale to meet your invoicing needs.

Overall, invoice automation optimizes financial processes, enhances productivity, and contributes to a more efficient and cost-effective accounts payable department, benefiting the organization as a whole.

How to Build Invoice Automation Workflow

Keeping track of invoices can be a hassle, especially when they pile up and you have to enter them all manually into a system. Fortunately, invoice automation workflow can help alleviate this burden. By using several software tools, you can streamline the process of creating, sending, and processing invoices. Let’s learn how to get started!

Identify the Pain Points to Automate Invoice Process Workflow

Before embarking on building an automated workflow, it’s essential to identify the pain points and inefficiencies in your current invoicing system. For instance, you may experience delays due to the need to wait for approvals from multiple stakeholders, entry errors from manual data entry, or missed deadlines due to a lack of reminders.

Once you identify these pain points, it becomes easier to build an automated workflow that addresses them.

Choose the Right Invoicing Software

There are many invoicing tools in the market, and it’s essential to choose the right one for your business. Look for invoicing tools that are easy to use, customizable, and can be integrated with other software such as your accounting software.

Some commonly used invoicing tools include Artsyl InvoiceAction, QuickBooks, and FreshBooks.

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Design an Invoicing Process with Automated Workflow

With your pain points identified, and the invoicing tool selected, it’s time to design a workflow that will automate the invoicing process. Your workflow should involve the following stages; invoice creation, approvals, payment processing, and record keeping.

Use the Artsyl InvoiceAction intelligent invoice automation software to configure automated processes for each stage to ensure that all the steps are completed seamlessly.

Train Your Staff to Use Automated Invoice Processing Workflows

It’s vital that staff who will be using the automated invoicing workflow understand how it works and the benefits it offers. This is especially important for frontline staff who will be collecting and processing client data. Train staff on how to use the invoicing tool and how to navigate any potential hiccups in the process.

Monitor and Evaluate the Invoicing Workflow

After the automated invoicing workflow is up and running, it’s essential to monitor and evaluate its effectiveness. Collect feedback from staff and clients, identify any glitches in the process, and make necessary adjustments. This continuous evaluation ensures that the invoicing process remains optimized and efficient.

Final Thoughts: Why Automate Your Invoicing Workflows

Automating your invoicing process can help save time and resources while reducing errors and increasing efficiency. By following the above steps, your business can streamline the invoicing process and enhance overall productivity. Remember to identify the pain points, choose the right invoicing tool, design a workflow, get staff buy-in and monitor and evaluate the workflow regularly.

Automating your invoicing process may require some initial investment, but the savings in time and resources are worth it in the long run.

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