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Automated Invoice Processing: What Is It? How Does It Work?

by Sujith Parakkunnath, on June 23, 2022 9:30:00 AM PDT

In today's fast-paced, constantly-connected world, it seems like everything is automated. From home thermostats to grocery delivery, there are countless ways to have technology take the reins and make our lives easier. And invoice processing is no exception!

Automated invoice processing helps to streamline your billing process and save yourself time and hassle. But what is it? How does it work? Keep reading for answers to those questions and more.

What Is Invoice Automation?


What Is Invoice Automation processing

Automated Invoice processing is when using software to update the process of invoices for accounts payable and the data in your Enterprise Resource Planning (ERP) system. Businesses frequently use this software to support suppliers with expected information by paying the invoices. This process involves extracting invoice data by entering it into a system and putting the data into your ERP to make the payment transactions in minutes sometimes seconds.

Automating invoice processing involves the automation of the following.

  • Managing purchase orders 
  • Matching price
  • Transferring digital payments
  • Data entry
  • Streamlining workflows

The main responsibility of the processing of invoices depends on accounts payable. It is a traditional method with a timely system of putting the invoice data, matching purchase orders, creating paper invoices, and filing them at the end. Then the invoices are received by the person via mail, fax, email, etc. 

Most of these processes are repetitive and time-consuming. They require little to no cognitive decision-making as once the process is set, it is pretty much ensuring accuracy robotically. Therefore, the invoice process needs automation. It is also considered the next level of manual processing.

How Does Automatic Invoice Work?


How Does Automatic Invoice Processing Work


The working of Invoice management is discussed below:

  • The basic method of invoice management begins when the department of accounting receives the supplier's invoice.
  • That invoice is matched and approved, but if the invoice amount is large, then it must require some further approvals.
  • The data must be entered into the system, and then the client should wait for the issuance of payment. Then the payment is provided to the selected person.

The invoicing process takes time, depending on the company. The manual invoicing process takes more than 15 steps to clear the payment. This will take a large time to process an invoice. Similarly, processing multiple steps can take a lot of time.

The automated invoicing process leads the front in the race of automatic and manual invoice processes. The automated invoicing process is given below:

  • After an invoice arrives, it is scanned by the digital accounting system.
  • You will get data captured by the system in no time, whereas manual invoices take many hours of data entry.
  • Then the software used in the invoice automation converts the data into a text document.

The invoice details can be extracted and placed in the automated control system, recognizing which fields to catch and enlist into the ERP method. This possesses information like supplier name, the purchase amount, and quantity. Invoices are then forwarded to the relevant parties for consideration and approval

What Methods Can Be Used?

The common methods used to automate invoice processing include:

Optical Character Recognition (OCR)

OCR in invoice processing

Optical character recognition is converting scanned or digital images of text into machine-readable text. OCR can be used to automate the data entry process by reading and extracting information from invoices. This method is often used when dealing with paper invoices, as it can be difficult to enter large amounts of data accurately manually.

Artificial Intelligence


Artificial Intelligence in invoice processing

Artificial intelligence can be used to identify patterns in invoice data and automate the data entry process. This method is often used when dealing with invoices that have high levels of variations, as it can be difficult for humans to identify patterns in such a large dataset.

Purchase Order Matching (PO)

Purchase Order Matching (PO) in automated invoice processing

Purchase order matching is a process of matching invoices to purchase orders. This method is often used when dealing with a small number of invoices, as it can be easier to match invoices to purchase orders manually.

Benefits of Automated Invoice Processing


enefits of Automated Invoice Processing

An automated invoice management system contains up to an 80% drop in the company's procure-to-pay cycle. There are numerous advantages if the company has an automated invoice system. Some of them are discussed below.

Reduce The Manual Entry Errors

Reduce The Manual Entry Errors in automated invoice processing

One of the main benefits of automatic invoice processing is that it can help reduce the number of errors during manual entry. This is because the data is captured electronically and then inputted into the system, rather than being manually entered by someone who may make mistakes.

Easily Identifiable Irregularities


Easily Identifiable Irregularities in automated invoice processing

It can help to identify any irregularities easily. This is because all of the data is stored in one place and can be easily accessed and analyzed. This can help to prevent any fraudulent activity from taking place.

Automated Filing

Filing can be a time-consuming and tedious task, but it can be done quickly and easily with automatic invoice processing. This is because all of the data is stored electronically to be easily sorted and filed.Right Information To Right People
With automatic invoice processing, you can ensure that the right information gets to the right people at the right time. This is because you can set up the system to send out notifications and reports to specific people as needed.

Fewer Late Payments

Late payments can often be a problem, but with automatic invoice processing, they can be prevented. This is because the system can send out reminders to make sure that invoices are paid on time.

Improved Cash Flow Forecasting


Improved Cash Flow Forecasting

Automatic invoice processing can also help to improve your cash flow forecasting. This is because you will have more accurate data to work with, so you can better predict future cash flow. An automated invoice is a segment of workflow automation.

With the automated invoice, technology redefines company operations and management, from arrival to mail. A business can accelerate the expected approach by enduring the benefit of automation.

If it corresponds to a manual invoice, an automated invoice proceeds faster via a workflow. AP automation carries all the lowly jobs an accounting unit must complete and utilizes a computer to complete them. Whether it is price comparison, purchase order, or data entry, a savvy automation key can control the easy stuff.

Steps to Implement an Automated Invoice Processing Solution


Steps to Implement an Automated Invoice Processing Solution

Implementation of automated invoice processing systems can be completed in three steps:

Start With A Template or Create Your Own Form

If you're looking to streamline your invoicing process, use a template. With a pre-built invoice approval workflow, all you need to do is install the software, and away you go. Or, if you prefer, you can use the workflow wizard to answer a few simple questions and let the software generate a functional workflow tailored to your business needs.

Once you're up and running, you'll have access to a digital form that can be used immediately. Of course, you can also customize the form using the drag-and-drop form designer to add features like an invoice line items table, dropdown lists, digital signatures, and more.
You can use the Visual Rule Builder to process invoices automatically.

For example, you can configure your forms to only display certain information to stakeholders during the approval process. This makes it easier and faster to approve invoices.

Customize The Workflow

When you have your forms set up, the next thing to do is customize your workflows to send invoices from one approver to another. You can use the visual workflow builder to apply conditional rules without writing any code.

For example, you can tell the system to automatically send invoices to a senior executive if the value of the invoice is above a certain amount.

It will improve efficiency and compliance with internal policies. Also, it can reduce the need for manual review of invoices by senior executives, which can save time and prevent delays.

Integrate With Your Accounting System

ERP systems play a significant role in managing a company's financial accounts. Approved invoices often need to be entered manually into these systems, which can be very time-consuming.

Integrations can help make the approval process much smoother and cut down on manual data entry.

Once you have everything set up, it's essential to test it out with some users before implementing it throughout your organization.
Automating your accounts payable process is key to maintaining timely payments and good relationships with vendors.

Manual processing is error-prone and can lead to lost invoices, missed payments, or even fraud. Implementing an automated solution will help improve efficiency and accuracy.

Software Solution For Automatic Invoice Processing


Software Solution For Automatic Invoice Processing

As your business grows, the number of invoices you receive can quickly become unmanageable. Manual processing of these invoices is not only time-consuming but is also prone to errors. Automated invoice processing is a software solution that can help you manage your invoices more efficiently and accurately.

Unified Console

A unified console allows you to view all of your invoices in one place. You can also use the console to track the status of each invoice and see which ones have been paid and which ones are still outstanding.


The software can be customized to fit the specific needs of your business. You can set up rules and workflow processes that are tailored to your company’s unique way of doing things.

Relationship Management

It can help you manage relationships with your vendors and customers. You can use it to store contact information, track communication history, and create custom reports.

Monitoring and Reporting

Monitoring and reporting features allow you to keep tabs on your invoice processing activities. You can see which invoices have been processed, how long they took to process, and what errors were made.

Operations Management

Operations management features give you visibility into the inner workings of your invoice processing system. You can see which employees are processing invoices and how they are performing. You can also use these features to change the system if needed.

Use Infrrd Automated Invoice Processing Solution

If you're looking for a way to automate your invoicing process end-to-end, Infrrd's invoice processing solution is a great option. With this solution, you can quickly and automate data extraction from your invoices and get insights from them that you didn't have access to before. The solution is easy to use and comes with patented features that will make your accounting tasks easier.

It is an excellent choice for businesses of all sizes. Whether you're a small business owner or a large corporation, Infrrd can help you save time and money on your accounting tasks.
The perks include:
1. Speed Up The Process: With Infrrd's software, you can quickly and easily generate invoices. This will save you time on your accounting tasks.
2. Track Payments: You can use the software to track payments. This will help you keep track of your finances and ensure that all of your payments are up to date.
3. Manage Your Records: The software comes with various features that will make it easier for you to manage your accounting records.
4. ML-Based Capabilities: Infrrd's software uses machine learning to automate your invoicing process. This makes it a great choice for businesses that want to save time on accounting tasks.

FAQs about Automated Invoice Processing

Is Automated Invoice Processing Worth Considering?

Absolutely! Automated invoice processing can save your business a tremendous amount of time and money. By automating the invoicing process, you can free up your staff to focus on more important tasks and avoid the hassle and expense of manual data entry.

How Does It Work?

Automated invoice processing uses optical character recognition (OCR) technology to capture data from invoices and convert it into a digital format. This data can then be imported into your accounting or ERP system, eliminating the need for manual data entry.

What Is Touchless Invoice Processing?

Touchless invoice processing is an automated invoice processing that does not require any manual input from your staff. The entire process is automated, from data capture to data entry.

How Much Does It Cost?

The cost of automated invoice processing will vary depending on the size and complexity of your business. However, it is generally very affordable and can quickly pay for itself in time and money saved.

Is Automated Invoice Processing Secure?

Yes! Automated invoice processing is highly secure, as all data is stored electronically and can be password-protected. Additionally, OCR technology is very accurate, so you can be confident that your data will be captured correctly.


Automated invoice processing has revolutionized the way businesses operate. By automating the invoicing process, you can save time and money. You can also improve your customer service by ensuring that invoices are processed quickly and accurately. If you’re looking for a way to streamline your business operations, automated invoice processing may be the solution you need.

Topics:Intelligent AutomationIntelligent Invoice Processingautomated invoice processing

About this blog

AI can be a game-changer, but only if you know how to play the game. This blog is a practical guide to turning AI into real business value. Learn how to:

  • Make sense of complex documents and images.
  • Extract the data you need to drive intelligent process automation.
  • Apply AI to gain insights and knowledge from your business documents.

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