Incoming invoice: how to optimize its circulation within the company?

The long circuit of a paper invoice

How does the processing of an incoming invoice usually work in the company?

1. It all starts with the receipt of the invoice, which still arrives (too) often by mail in paper format.
2. The receiving department dates it and sends it with the pile of mail to the accounting department, possibly scanning it to send it by e-mail. At this stage, it sometimes happens that an invoice is misplaced.
3. The invoice is then analyzed by an employee of the accounting department, who has to perform a time-consuming task with little added value due to the lack of appropriate digital equipment: checking all the data contained in the invoice. He or she must ensure that the information corresponds to the order placed (identity of the supplier, products chosen, prices, discounts, etc.) and to the delivery made (quantities received, etc.) before entering the data manually into the accounting software, risking input errors in the process.

Beware of delays

If there is a discrepancy with the data indicated in the order or delivery, after investigation, the invoice will certainly have to be sent back by mail to the sender before starting a new round. If, on the other hand, no irregularities are found, the invoice can then be sent to the decision-makers, who may have to be reminded several times by the accounting department to obtain the "Good to Pay". They will then validate the payment and the invoice will be archived. Beware, these reminders not only require a sometimes repetitive action on the part of the employee, but may also lead to a delay in payment which may deteriorate relations with suppliers, or even result in the payment of penalties.

Facilitate the processing steps

You think this description is exaggerated? Yet this is what is still happening in many companies that are slow to consider a total and automated dematerialization of the processing of their incoming invoices. According to the Global Digitization Barometer unveiled in June 2021, only 20% of companies believe they are ready to take the plunge.
Yet the benefits are obvious. According to a 2018 Eway study, an accountant can process 6,000 paper invoices per year compared to 90,000 if assisted by a digital solution. The invoice processing cycle goes from 15 days to 3 days on average.

Checking compliance

As soon as the invoices are received, they must be transformed into a compatible digital format to allow automatic handling. The AP automation module of the Invoice Services offer provides these functionalities thanks to a software called OCR, which locates and captures the data in the image. This data is then automatically controlled by the tool:

• Verification of the existence of the compulsory mentions (date of issue of the invoice, identity of the supplier, designation of the product...);
• anti-fraud controls (Is the existence of the supplier proven? Is the company in bankruptcy? Is it an already processed invoice?
• business controls (order number, account number, item code...)...

If everything is in order, a digital original is created which will be archived by the solution for 10 years.

Reconcile invoices and orders

The data is then tested by an automatic reconciliation system that compares it to the order and goods receipt data. If no major problems are found, payment is made automatically on the scheduled date. On the other hand, if discrepancies are detected or if reconciliations cannot be made (partial deliveries, invoices without orders, etc.), the tool triggers approval workflows. These workflows can be customized since it is possible to designate the decision-maker in charge of intervening, as well as the tasks that he or she is authorized to carry out, in order to quickly lead to either a rejection or a settlement with its accounting recording. A process that combines efficiency and security!