Despite advances in Accounts Payable (AP) technology, many AP teams still rely on manual processing to capture and record invoice data. According to research, small and middle-sized enterprises (SMEs) are particularly guilty, with 86 per cent of SMEs persisting with manual processing, perhaps concerned by the perceived cost and complexity of automated solutions.
If you’ve processed invoices manually, you’ll already be aware that the process can be extraordinarily time-consuming and vulnerable to errors. A simple and cost-efficient alternative, invoice parsing software, is a reliable solution that automates data extraction to improve speed, efficiency, and productivity.
In this article, we’ll explore what invoice parsing is, how it works, and how it can benefit businesses of all sizes.
What Is Invoice Parsing?
Invoice parsing is an automated technology that extracts key data from invoices to enhance efficiency and accuracy within Accounts Payable departments. Utilising a combination of state-of-the-art technologies, including Optical Character Recognition (OCR), Natural Language Processing (NLP), Natural Language Understanding (NLU), pattern recognition, and machine learning, invoice parsing software can read and interpret information in different formats, including PDFs and images.
How Does Invoice Parsing Software Work?
OCR technology underpins the effectiveness of invoice parsing software. By converting scanned text, handwritten or printed, into editable and searchable digital data, OCR tools facilitate text recognition and document digitisation so that data can be automatically extracted from invoices, irrespective of the format in which they are supplied.
Once the document is digitised, advanced technologies, such as NLP, NLU, pattern recognition, and machine learning, are employed to extract specific details, including the invoice date and number, the supplier’s name, and the total amount due. Although invoices come in many styles and designs, invoice parsing technology can identify and extract data flawlessly, avoiding the human error that is are often made during manual processing.
Redefining The AP Landscape
One of the most significant advantages of invoice parsing is its ability to automate data entry, which is a repetitive and time-consuming manual task. As well as creating bottlenecks in the AP process, which leads to delayed payments and inefficiencies, manual data entry is also vulnerable to mistakes which inevitably causes exceptions that have to be traced and corrected before payments can be authorised.
In contrast, invoice parsing expedites the process of data extraction and input, enhances efficiency, and eliminates errors. Fewer mistakes means less time wasted addressing exceptions, while more invoices can be processed in the same time, with no risk of the software experience fatigue, loss of concentration, or burnout. AP staff can be redeployed to work on strategic or value-added tasks, which will help to improve the overall structure and efficiency of the department and strengthen relationships with suppliers.
Arrange A Free Demonstration Of Our Automated Invoice Processing Software
To see how our automated invoice processing software could benefit your Accounts Payable department, simply arrange a free, no-obligation demonstration.
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