How to manage an invoice?

Accounting

How to manage an invoice?

Purchase invoice

 

Purchase invoice is the main document that is used to recognize purchases from suppliers. It is of the utmost importance to verify that data in the invoice is correct and according to purchase order facts. Otherwise, issues might arise. For example, if the total amount is higher than it should be. An unfair supplier might exploit this by asking to pay the higher amount.

 

Common invoice management flow

 

Invoices in the majority of companies are still managed the old-fashioned way – using paper invoices. Once the employee receives an invoice, it is brought to the accounting department. Then, accountants have to gather data and approvals by traveling between different departments. After this is done, invoice’s data must be manually transferred into accounting books or computer program.

This classic way, not only takes a lot of time but also has other significant issues. Probably almost everyone has, at some point, encountered inconvenience of missing or lost invoices. What is more, finding out who lost this invoice and taking measures to prevent it from happening again is very difficult. Great, when it is noticed and dealt with swiftly. However, if no one notices this for an extended period, the supplier might become suspicious that your company is avoiding to pay bills, damaging your relationship.

 

Digital invoices

 

Many companies are starting to use e.invoices in search of a more streamlined process. This means that instead of paper invoices, electronic versions of them are created and send to the customer. Usually, they are delivered in PDF format or other such as Excel.
Using e.invoices saves time as they can be instantly sent over the email. Also, the chance of losing it is lowered, but they can still be forgotten.

Another benefit of digital invoices is the possibility of copying and pasting data into an ERP system using a computer, without the need to manually type it in.
However, since it is still done manually, the possibility of errors remains. Also, time savings for accountants are not significant.
Digital invoices help only a bit, but they do lay a foundation for process automatization.

 

Automated digital invoices

 

Lesser known are document processing automation tools. This is the next step in optimizing business processes.

Probably, one of the best ways to automate processes is to use EDI software (electronic data interchange). These tools allow for the seamless integration of data exchange between supplier and customer. The client can fill in the PO (purchase order) inside the system, the supplier will get this data into their end and once goods are shipped, invoice appears inside the client’s system automatically. This is truly amazing, but mostly utopian. EDI is beneficial only when used by both parties, otherwise, data is not automatically exchanged, thus forgoing software’s main benefits. What is more, EDI software usually is pretty expensive, requires lengthy installation time and changes business processes dramatically. Thus requiring a business to adjust. Also, lack of a large base of users makes them valuable only to very large companies that have the power to demand their suppliers to use the system. Furthermore, due to the size, these companies have no other way but to use automated tools. Since the data flows are so immense, that without automation it is unrealistic to expect processes to run smoothly.

What if…

On the other hand, companies that cannot use EDI for any reason whatsoever, should not feel left out. One of the solutions is to use Horion IMS. This system allows for automation without requiring all the parties to use the same software. Horion IMS rather than changing the process builds on the existing old-fashioned invoice management process. It digitizes paper invoices, gathers the data with the help of Artificial intelligence and automatically pushes it to the ERP or other accounting system used in a company. Also, it helps to solve classic issues such as lost or forgotten invoices and makes the process much faster and hassle-free.

Of course, if a company has only a few invoices a month, then automation is probably not needed. But when invoice numbers start to go into thousands, benefits of automation are clear.

We invite you to sign-up for an introductory presentation of our Horion IMS software.
Of course, the introduction is free of charge.