November 19, 2022
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10 minutes
To many, AI invoice processing may sound like a futuristic idea, suitable perhaps for those who are tech-savvy and up with all of the latest software developments. However, many invoice processing automation options are so simple that anyone can use them. Save your business time and money by implementing one in your organisation.
What Is AI?
AI is a term that’s thrown around a lot and is understood far less than it is used. It stands for Artificial Intelligence, and simply refers to intelligence displayed by machines. This includes processes such as analysing, interpreting and categorising data and information.
AI has been evolving rapidly in recent years to the point where AI-powered software can now leverage the power of machine learning, meaning that the technology can learn from its mistakes and improve over time. This can transform businesses, making many processes much more efficient.
What Is Invoice Processing?
Most businesses receive many invoices each week from suppliers. Whether it’s for stock bought or office expenses, the number of invoices flooding in seems to add up all the time. The information on these invoices usually needs to be entered into accounting software by the accounts payable (AP) team.
Unfortunately, these arrive in a range of ways, including paper invoices or vendor invoices received via email. This can make the AP process tricky, as some invoices are already in a digital format, and some need to be scanned.
There are three main options a business can choose for invoice processing:
Manual Invoice Processing
If you’ve ever used manual invoice processing to extract data, then you know how time-consuming the process can be. It involves taking each invoice and using manual data entry to enter that information into your accounting software. This can take up to 10 minutes per invoice, which adds up to a considerable time commitment each week, depending on how many invoices you need to enter.
Template Based
Early invoice processing tools relied on a template-based approach for data capture. Templates were created according to a typical invoice format. Then, any uploaded invoices were compared against the template, which dictated what the extracted fields were labelled. This approach works if you only receive invoices in a couple of standard formats. However, anything in a different place is likely to be mislabelled by the system. Therefore, even a date in a different location can wreak havoc on your numbers, as it may be incorrectly categorised as a price or quantity, for example.
AI Invoice Processing
Modern invoice processing takes a very different route and uses complex neural networks and machine learning to actually read the invoices in a way very analogous to a human staff member doing manual data entry. There's just one difference: an AI invoice processor never gets tired, so you won't end up with all those random mistakes you get when your staff starts seeing double. Deep learning algorithms can be trained specifically for niche industries, and learn all the special lingo in much the same way your human employee does during the onboarding process. By using AI invoice processing, you can take all relevant invoice information and put it into your accounting system without any manual input from your team.
Benefits of Using AI for Invoice Processing
The Gift of Time
What could your team get done with an extra few hours available to them each week? Imagine if you could free up your staff to spend less time processing invoices and more time working on value-adding projects. That’s exactly what an invoice parser can help you to achieve.
Cost Savings
Take advantage of any early payment discounts offered by your suppliers; with AI invoice processing, you can be sure that invoices will be processed quickly. This allows the invoice approval to occur earlier and ensures that invoices are paid on time, every time. But that’s not all; time is money, and because you’re saving time by investing in this software, you’re also saving money.
Stellar Accuracy
Unfortunately, when you manually complete data entry, it’s extremely difficult to do this with a high level of accuracy. Human error is unavoidable - unless you switch your AP team over to AI invoice processing instead. Gain a much higher level of accuracy by letting machines do all the hard work for you.
Data Is the Key to Success
In the modern age of business, we are more reliant on data than ever. Invoice data, in particular, is critical to any accounting or AP department. Being able to easily find and access the required data is crucial. By using AI invoice processing to digitise and categorise data, you can use this information to track your costs, filter information, benchmark your performance, and view your spending.
Transparency
With all of this data at your fingertips, it’s never been easier to pull together your spending reports. Plus, if your business gets audited, you already have access to all of the information you need. Say goodbye to the stressful, headache-inducing audits of the past and welcome the ability to quickly pull all of the required information together.
Automate the Arduous Work
With staff shortages rampant across most industries these days, it’s important to make sure that your staff are happy and fulfilled in their work. A surefire way to reduce boredom in the office is to eliminate the need for mind-numbing tasks such as data entry. By investing in AI invoice processing, you’ll be taking away the part of their job your employees are dreading each day. This can lead to increased job satisfaction and improved morale. If they feel fufilled at work, your staff will want to stay in their jobs for a long time!
Detect and Prevent Fraud
Unfortunately, invoice fraud does occur. By using an AI invoice processing tool, you can pick up on any discrepancies within invoices earlier than ever. For example, with all PO numbers from a supplier listed and easy to find, it will be simple to spot if one is quite different.
How Does AI Invoice Processing Work?
AI invoice processing is a simple process that follows these steps:
- Invoice Gathering
First, gather your invoices together in one location on your computer. If you have paper invoices, scan them so you have a digital file.
- Optical Character Recognition (OCR)
Optical character recognition (OCR) allows computers to read physical files and turn the information into digital text. You upload a scanned file, and the software analyses the page, looking for familiar shapes that it recognises as letters. This information is then used to find all the text on the page and create a digital version. This automates the data entry process, so you no longer need to retype a paper invoice to get the information onto your computer.
- Data Extraction Process
Once all of the text on the invoices can be read by the computer, the next step is for the AI invoice processing software to extract the data from those invoices. This data is then categorised into various fields commonly found on an invoice. These may include the date, purchase order number, supplier details, quantities, and more.
- Access Information
Finally, the tool will now allow you to access your extracted data. You may be able to download it as a CSV file or Excel spreadsheet for further processing. Or you may decide to use a tool featuring API that allows the information to flow directly through to your accounting system for the ultimate convenience.
FAQ
Can Invoice Processing Be Automated?
Absolutely, invoice processing can be automated. Simply upload your invoices, and with the right tool, you’ll get back extracted, categorised data. Look for a product that contains OCR as well as AI technology so that you can also automate the processing of scanned invoices.
How Do I Digitise an Invoice?
The simplest way to digitise an invoice is by using AI invoice processing. These tools scan your invoices to understand the data, turning it into information grouped by type.
What Is Invoice Processing Software?
Invoice processing software is a type of system that can read incoming supplier invoices that arrive at your organisation. It analyses the information they contain, sorting it into relevant categories and then pushing that data through to your accounting system. This makes the act of processing invoices much easier, faster, and more accurate.
Will AI Replace My Accounting System?
In short, no - AI won’t replace your accounting system. However, if you can find an AI invoice processing tool with API, then the two can work together to simplify your workflows. Think of the invoice parser as an assistant to your accounting tool. It will not replace it but simply increase the accuracy of the data within it as well as freeing up your time.
What Is the Best AI Invoice Processing System on the Market?
If you’re looking for the best AI invoice processing system money can buy, you need to check out Affinda’s invoice extractor. The AI used in this platform has both the benefit of being a tried and true product as well as being constantly developed to ensure it is leveraging the latest findings in AI research.
All types of businesses are using Affinda’s technology to radically reduce their invoice processing time. Our Invoice parsing API is being used by ERP and IT consultants to improve workflows in businesses across the globe. When FinTech companies really want to wow their users, they showcase our technology embedded in their platforms.
What Makes Us Different?
As a relative newcomer to the document processing market, compared to those who developed their technology 20 years ago, we are able to be a lot more flexible and responsive to our customers. Need our AI engine trained on your specific invoices? We can do it. Have an idea for a new feature that would help a lot of customers? We’d love to hear it. Plus, we offer a comparable product to many of our competitors at just a fraction of the price.
We are well-known amongst our customers for our superior customer service. When we hire people for our customer service team, we’re not just looking for people that can sell. We seek out those who are genuinely interested in helping our customers find the best product for them, and then train them to understand our technology in-depth enough to answer all of your questions.
How Does Affinda’s AI Invoice Processing Software Work?
Our platform is so simple, it almost needs no explanation. Here’s a quick summary, and then we suggest that you go and try it for yourself!
1. Upload
Upload your invoices and our AI engine, ‘Vega’ instantly identifies and labels the various fields.
2. Check It
No one is perfect, even Vega. But it’s pretty clever and can learn from its mistakes if you correct it. So, double-check those invoice details and highlight any missed fields you’d like extracted.
3. Continuous Learning
As long as you correct Vega, it will learn over time and process your specific invoices with higher levels of accuracy the longer you use our product.
4. Export
Now you simply download the results and export them to your accounting system. You can choose to download the data as an XML, JSON, or Excel file.
If you’re ready to see what Affinda can offer, we highly recommend that you start by trialling our free online system. This way, you can put our invoice parser to the test without the need for any commitments or payments. Go ahead and upload a few dozen invoices to see how Vega performs.
Then, when you’re ready to dramatically improve your invoice processing systems, get in touch with us. One of our tech-minded sales team will be more than happy to offer you a full product demonstration.
This is what one of our loyal customers has to say about Affinda’s technology:
“We were very impressed with the team and offering at Affinda. They were able to match the quality of our previous vendor, but the pricing was much more attractive.
They were also able to make some customisations based on our requests, something our previous vendor was unable to do.”
Whether you work in AP, finance, or tech, you’ll love our product. Try it for yourself and see!
