What is Expense Automation and Why You Should Implement It?
Expense automation leverages advanced technology to eliminate repetitive tasks in expense management and help businesses avoid many financial issues.
Invoice data capturei involves entering relevant details into an accounting system. See how you can automate this process with FormX.
Every business has a long set of bills and financial obligations to keep track of and with them, endless invoices to process. Tackling invoice capture manually has generally been the norm, but it’s a costly and time-consuming task that can be completely transformed with the right automation technology.
In this blog post, we’re going to look at what invoice data capture involves, how you can automate it with FormX, and the benefits that doing this can bring your business in comparison to manual approaches.
Invoice data capture is the process of extracting relevant information, such as vendor’s name, invoice number, product / service purchased, etc., from an invoice and uploading it to accounting software, ERP software, or whatever system a business uses to manage its financial information.
Its main purpose is to make information in documents available for use by software. The information extracted generally needs to include the invoice number, the name of the vendor, their address, the total amount owed, and when it’s payable by. Making sure that all this data is captured correctly and in a timeous manner is fundamental to ensuring that a business stays on top of its bills.
One wrong data input and a payment could accidentally be made to the wrong account or miss an important deadline. This can cause issues with vendors which can put whole projects on hold and slow down the daily running of a business. It’s why accurate and efficient invoice data capture is so important.
Manual invoice processing can involve an element of data capture in that sometimes a business will have a person set up to go through each invoice and input important information from the documents into the main system. This approach often requires keeping a physical copy of the invoice for later reference, which can create storage issues over time.
Another drawback of manual invoice capture and processing is that it’s slower and more likely to contain errors than with an automated approach. Constantly juggling physical documents can create issues simply because documents may go missing or be duplicated, all of which can hurt bill management and with that, cash flow.
In their 2023 survey and report, the Association for Intelligent Information Management (AIIM) shared that 25% of respondents didn’t think that paper invoices would be eradicated by 2025. It shows that as much as we’ve digitized business operations, paper is still a big part of how we do things. Just because we’re still dealing with physical documents, however, doesn’t mean we have to stick by traditional, manual processing methods, especially when they can lead to costly errors.
What has made invoice processing tricky, be it with automated or manual systems, is that invoices can vary hugely in terms of their formats. The layout and document type can differ from vendor to vendor, with some only sending physical documents while others prefer to send PDFs.
In terms of automation, this has created a challenge because OCR and other traditional rule-based tools used for invoice data capture can’t scan just any document and return it as usable, structured information. Old-school rule-based data extraction tools works best on documents such as ID cards which have standard formats that rules can be built around for the software to use when extracting data. Those rules can’t be set however when every vendor uses their own format or layout for their invoices.
At FormX, we offer something a little different from traditional OCR tools in that our technology is combined with Machine Learning and falls into the category of “Intelligent Document Processing”. What this means for invoice data capture is that we can help you automate all of it, no matter the vendor, layout, or document format.
We have a pre-built invoice extractor to help you extract everything from the vendor’s name to the payment due date, without any manual intervention needed. Where traditional rule-based extraction tolls have faltered invoice capture automation, our IDP solution is more than equipped to take over.
The benefits of automating invoice data capture using IDP tools like FormX are significant. We’ve worked with many companies over the years and seen for ourselves just how transformational an automation system can be in key areas of business:
The most immediate shift to business operations that automated invoice data capture can bring about is in improving efficiency. Automated invoice processing is faster than manual approaches which then allows other accounting operations that follow it to be more streamlined.
Think about it: if your business can extract data from invoices faster and get it into your systems quicker too, it means that everyone relying on that data can do their jobs at a better pace as well. A big part of this efficiency is that there are fewer errors made with an automated system and so there’s also less to slow things down.
One of the most common issues with manual invoice processing is duplicated invoices and the subsequent risk of making a payment more than once. With invoice capture tools such as ours, it’s far easier to recognize errors like this before they lead to a financial loss.
In 2018, Goldman Sachs looked at the projected impact of automating accounts payable systems and found that it could help cut business costs by up to 75%. Big errors when it comes to things like invoices don’t just lead to double payments, they can also put businesses at risk of missing payment deadlines and incurring penalties.
On the topic of penalties, an area of business that significantly benefits from automated invoice data capture is compliance. For tax purposes and other legal issues, businesses need to keep airtight records of their financial dealings. This is made far easier with software like FormX which stores records such as invoices digitally so that they are secure and easily available at any time for things like audits.
In AIIM’s 2023 survey of the information landscape, they showed that risk and compliance remain the leading driver for businesses using document management and processing tools. It’s clearly helping to fill a gap that few other solutions can.
As a business grows, so too will its financial commitments. A successful business will inevitably have to deal with growing volumes of invoices over time, which software like ours can adjust to in a way that just isn’t possible with manual invoice capture and processing.
Not only does automated data capture limit the number of physical documents that need to be stored and kept on hand, but it also means that extra people aren’t having to be hired just to meet growing business demands.
Something we pride ourselves on at FormX is that our software is not only easy to use and requires minimal coding for adjustments, but it also integrates easily into existing AP software. Shifting to automated processing can seem daunting just because it’s a departure from tradition, but we’ve made sure that invoice data capture is easier than ever.
Here’s how you can use FormX to extract data from your invoices and help automate fundamental business practices for a more efficient, cost-effective outcome:
On the web portal, you can create your own invoice extractor and specify what items, such as date, total amount, product -level information, etc., you wish to extract.
After you’ve created your extractor, you can upload a sample invoice image and check the JSON output to verify the results.
Afterward, you can integrate your invoice extractor with your apps via API or use our Desktop APP for batch processing. Instructions can be found in our documentation.
Staying on top of invoices is a highly important part of maintaining a business’s financial health. Automation can ensure that this intrinsic business process is done quickly and accurately so that you can rest assured that money isn’t being wasted and that bills are paid properly and on time.
At FormX, we’ve made it as simple as possible for you to perform invoice data capture with our pre-set models and send it to your existing accounting and financial software for further use. You don’t need to be a coder, or particularly well-versed in ML and OCR software to use our tools. We’ve designed our IDP software to do all the heavy lifting so that your business doesn’t have to.
Contact us to tell us more about your AP workflow and how FormX can help you handle invoices automatically.