What is invoice management software?

One of the fastest ways to accelerate invoice processing is to solve the “capture” problem. Many organizations are still manually entering vendor invoice data, either from paper and/or emailed invoices coming from suppliers. This creates bottlenecks as well as manual errors and missed invoices. 

A good invoice management automation system incorporates invoice capture technology that collects all the essential data on vendor invoices received and stores the information in a database. Superior invoice scanning capture solutions can intuitively recognize invoice layouts and perform all the necessary mapping of digital data. Modern invoice OCR technology can do this with a 95% accuracy rate.

What is the invoice management process?

Once invoice data has been digitized the invoice will show up in a central dashboard of the invoice management software. Digitization is where the invoice management process starts. This is where the finance administrator can apply approval workflows for project managers and supervisors. Once the approval workflow is setup invoices will automatically flow to the approver once the invoice enters the system. Ad hoc routing in the invoice management system is also available, without having to hire a developer, as the system has a drag and drop interface for this purpose.

Approvers can see the invoice on their device and approve with one click in email, a step that saves team members from having to login into the system.

For PO invoices that do not match, the invoice is flagged in the administrator’s dashboard and the exception is sent to the approver with all the documents necessary to reconcile. Variances are set inside the administrator system settings to cover small amounts that are over or under quantities and dollar amounts. 

A complete invoice management system will also provide administrators with a complete searchable invoice archive. Once an invoice is approved, the invoice is sent to the ERP for recording and payment. Once the invoice has been paid, the invoice management software retrieves the invoice and stores it in the cloud. 

Another essential function in the invoice management process is an auditing function. That usually includes a time-stamped invoice log showing messages, documents, and all the activities related to the invoice approval process. Finance administrators appreciate this because it saves time when the company is being audited by an outside firm, or if internal investigations are required at tax time or month end.