Scanning invoices is a fundamental part of managing your business’s accounts payable tasks. This process can be taxing and tedious, consuming valuable time and resources.
Luckily, this blog will guide you on automating your invoice scanning process using software, making it simpler and more efficient.
By implementing invoice automation, you can streamline your workflow, reduce manual errors, and save significant time, allowing you to focus on more critical aspects of your business.
What is Invoice Scanning?
Invoice scanning is extracting essential information from an invoice for use in invoice processing.
Traditionally, this is done manually, with personnel entering data into a spreadsheet or an accounting/ERP system.
However, many businesses now automate invoice scanning to simplify and speed up data extraction.
With automation you can reduce manual labor, minimize errors, and streamline your accounts payable tasks, making it a more efficient and cost-effective solution for managing invoices.
What Are the Benefits of Invoice Scanning?
After knowing what is invoice scanning and how your business or accounting practice can use it, here are some of its benefits:
- Cost Reduction: Nearly 45% of finance executives cite lowering invoice processing costs as their top AP-related concern. By automating invoice scanning, you can reduce invoice data entry tasks by over 80%, bringing the cost of processing a paper-based documents down from $15 to $3 or less.
- Cost Savings: Automation reduces labor costs, as the average monthly salary for a data entry personnel is $3,375, while OCR software typically costs between $30 and $100 a month. This significant saving highlights the financial advantage of adopting automated solutions.
- Increased Accuracy: OCR used in invoice scanning has an accuracy of 99.9% while it is shown in research about manual data entry, that humans are prone to make mistakes between 18% to 40% when inputting data on spreadsheets.
- Faster Processing: Automated invoice processing can reduce the payment cycle by up to 50%, enabling companies to take advantage of early payment discounts and avoid late payment penalties, significantly improving cash flow management.
- Improved Scalability: Businesses using automated invoice processing can handle up to 120% more invoices without increasing headcount based on our customer feedback, allowing for efficient growth and scalability without additional resource constraints.
- Enhanced Data Management: Scanned invoices are stored digitally, making them easy to organize, search, and retrieve. This improves your data management and ensures that invoice data is readily available for audits or financial reporting.
- Improved Tax Compliance: Digital storage of invoices helps in maintaining compliance with financial regulations and standards. It ensures that all invoice records are accurately recorded and easily accessible for auditing purposes.
- Improved Vendor Relationship: Automated invoice processing speeds up vendor payments, resulting in better vendor relationships. Timely payments enhance trust and reliability, potentially leading to favorable terms and long-term partnerships with suppliers for your business.
How to Automate Invoice Scanning
After knowing the benefits of invoice scanning, I believe that you might want to apply it to your business.
Here are the steps to help you get started:
Step 1: Select Invoice Scanning Software
Choosing the most affordable and cost-efficient invoice-scanning software for your business is important.
DocuClipper is an excellent option, offering cost-effective features for only $39 a month. It covers not just invoices but also receipts, credit card and bank statements, and checks.
This software provides versatility and can easily convert hundreds of PDF invoices into formats like XLS, CSV, or QBO, based on your preference.
By picking DocuClipper, you ensure a flexible and efficient solution for all your invoice scanning needs.
Step 2: Extract Invoice Data
With OCR software, you can start extracting invoice data from PDF. Capture essential information such as invoice numbers, dates, amounts, totals, taxes, line items, and more. This automation simplifies invoice data extraction and ensures accuracy.
When extracting data from documents, be sure that you organize them in the XLS or CSV format that is compatible with your ERP or accounting software.
Step 3: Import Invoice Data Into Your ERP/Accounting Software
Importing your invoice data directly into your accounting software is straightforward with built-in import features.
From the QuickBooks interface, you can import invoices directly, streamlining the entire process and ensuring your financial data is accurately and efficiently integrated into your accounting system.
For example, you can import invoices into QuickBooks by uploading a CSV file. Alternatively, you can use an interface or API for seamless integration.
DocuClipper simplifies this process further by allowing you to connect your DocuClipper account to QuickBooks. You don’t need to convert your invoice spreadsheet to CSV, and you can import it directly.
Furthermore, you can apply invoice rules to automatically categorize your expenses and assign invoices to the right customer or vendor.
Conclusion
Invoice scanning is integral to accounts payable processes, and automating it offers many benefits for your business.
Automation can significantly reduce costs, enhance efficiency, and improve organization. By using OCR invoice scanners, you open the door to automation, avoiding the drawbacks of manual processes.
This technology streamlines your workflow, reduces errors, and saves valuable time, allowing you to focus on more strategic tasks. Employing automated invoice scanning is a smart move to optimize your accounts payable operations and drive business success.
FAQs about Invoice Scanning Software
Here are some frequently asked questions about invoice scanning software:
What is OCR invoice scanning?
OCR (Optical Character Recognition) invoice scanning is a technology that converts different types of documents, such as scanned paper documents, PDF files, or images captured by a digital camera, into editable and searchable data. This process extracts key information from invoices, such as invoice numbers, dates, amounts, and line items, automating data entry and streamlining invoice processing.
What is scanning in accounts payable?
Scanning in accounts payable involves converting paper invoices and receipts into digital formats using scanning technology. This process captures key information such as invoice numbers, dates, amounts, and line items. Digitalizing these documents streamlines the accounts payable process, reduces manual data entry, improves accuracy, and enhances the organization and accessibility of financial records.
What is the purpose of invoice processing?
The purpose of invoice processing is to manage and record all incoming invoices efficiently. This process ensures that invoices are accurately entered into the accounting system, approved, and paid on time. Effective invoice processing helps maintain accurate financial records, control expenses, prevent payment errors, and improve cash flow management, ultimately contributing to better financial health for the business.
What are the advantages of OCR in invoice scanning?
OCR in invoice scanning offers numerous advantages. It automates data extraction, reducing manual entry time and minimizing human errors for precise data capture. This leads to cost savings by lowering labor costs. It speeds up the invoice processing cycle, enabling faster payments and better cash flow management. It improves organization by converting paper invoices into digital formats, enhancing document management and accessibility. Additionally, OCR is scalable, handling large volumes of invoices effortlessly and supporting business growth.
What is the purpose of scanning receipts?
The purpose of scanning receipts is to convert paper receipts into digital formats for easier management and storage. This process captures essential details such as date, amount, and vendor information. Scanning receipts helps improve organization, ensures accurate record-keeping, facilitates expense tracking, simplifies tax preparation, and reduces the risk of lost or damaged receipts, ultimately streamlining financial management.
