In this article, we will explain exactly what invoice digitization is, and why it’s important. We also share our 8-step process to implement digital invoice processing. Read on to learn more.
Invoice digitization is the process of turning paper invoices into digital files using special tools like scanning software. This makes it easier to store, organize, and process invoices on a computer instead of handling stacks of paper.
Example: A company like TechZone uses a software to digitize 300 invoices for products like HP LaserJet Pro MFP M479fdw printers and Dell Latitude 3520 laptops. This streamlined their billing process and reduced manual data entry errors.
Here are some of the most common reasons why it is important to implement digitized invoicing system:
Digital invoices eliminate the need for manual data entry, minimizing human errors. Errors in invoices can lead to delays in processing and payments.
Digitized invoices are processed in real-time using software, reducing the time needed for approval and payment. This ensures vendors are paid promptly, improving relationships and cash flow management.
Digital invoices are easy to store and retrieve. They take up no physical space and can be accessed from anywhere with proper permissions, ensuring smooth workflows.
With digital invoices, tracking expenses and generating reports is simplified. Businesses can analyze trends, monitor cash flow, and prepare for audits without hassle.
Digitizing invoices cuts down on printing, storage, and labor costs. Over time, these savings can contribute significantly to the organization’s bottom line.
Use our 8-step invoice digitization process to effectively manage and convert invoices to digital format. Simply follow the steps below.
Gather all paper invoices and sort them by vendor, date, or project. This ensures no invoice is overlooked and creates a clear starting point for digitization.
Example: At MetroBuild Supplies, the accounts team sorted 350 invoices into categories for suppliers like BrickSmart and IronWorks, prioritizing pending payments first.
Choose software with OCR (Optical Character Recognition), which reads text from scanned images and turns it into editable data. Look for tools that integrate with your accounting software to simplify workflow.
Example: EcoTrade Logistics chose InvoiceEase Pro to digitize 400 monthly invoices, including transactions for Caterpillar excavators and Hitachi hydraulic pumps.
Digitize invoices in small batches using a scanner or mobile app to maintain organization. High-quality scans ensure that every detail is readable and ready for processing.
Example: The accounting team at Medico Supplies scanned 600 invoices for items like 3M stethoscopes and Philips thermometers in batches of 100 to ensure clarity and consistency.
Run scanned invoices through the OCR software to automatically pull out important details like invoice numbers, amounts, and due dates. This turns image files into usable digital data.
Example: At GreenTech Energy, OCR software extracted data from 800 invoices, including $25,000 worth of transactions for solar panels and battery inverters.
Review the digitized information to check for errors or missing fields. Correct any mistakes to ensure the invoices are ready for smooth processing.
Example: Skyline Interiors reviewed 200 invoices and found 12 with incorrect payment amounts for items like MarblePro tiles and LuxeLighting fixtures, which they corrected before uploading.
Upload digitized invoices into your accounting platform to enable quick and accurate payment processing. Ensure the data fields align for seamless integration.
Example: CargoLink Shipping uploaded 700 digitized invoices to Xero Accounting, connecting payments for services like freight container rentals and crane operations.
Set up approval workflows in your system to assign tasks and ensure timely reviews. Automating approvals reduces delays and simplifies payment cycles.
Example: At TechNova Solutions, invoices over $10,000 were routed to managers for automatic approval, cutting processing time for purchases like Dell servers and Cisco routers by 50%.
Save all digitized invoices in a secure cloud-based system. Use role-based permissions to protect sensitive data while allowing easy access for authorized users.
Example: CreativeAds Agency stored 1,200 invoices in CloudVault Pro, granting project managers access to records for clients like BrandBoost and AdFusion.
GreenValley Furniture, a mid-sized furniture retailer, wanted to improve its invoice management. They processed over 1,000 paper invoices monthly, leading to delays and occasional errors. Here’s how they implemented our simple 8-step process.
GreenValley’s accounts team gathered 1,200 invoices and sorted them into categories based on vendors like OakLine Woodworks and SteelFrame Designs. This organization helped them focus on overdue invoices first.
GreenValley selected InvoiceEase Pro for its user-friendly OCR (Optical Character Recognition) capabilities, which allow software to read text from scanned documents and convert it into editable digital data. This tool could process up to 500 invoices daily.
The team scanned invoices in batches of 150 to maintain clarity and avoid data mix-ups. They used an office scanner to process invoices for popular products like Classic Oak Dining Tables and SteelFrame Office Desks.
Using the OCR feature, GreenValley extracted key details like invoice numbers, due dates, and amounts from the scanned documents. This process digitized 1,000 invoices in a single week.
GreenValley cross-checked 10% of the invoices to ensure data accuracy. They identified and corrected errors in 15 invoices, such as incorrect amounts for orders of 50 Velvet Armchairs.
The team uploaded all digitized invoices into QuickBooks, ensuring payment details and vendor information aligned. This integration made it easier to track payments and generate financial reports.
GreenValley set up approval workflows based on invoice amounts. For invoices over $10,000, like bulk orders of Modern Lounge Sets, approvals were automatically routed to senior managers, cutting the approval time by half.
Finally, GreenValley stored the digitized invoices in CloudVault Pro, a secure cloud-based system. They implemented role-based permissions, allowing only authorized team members to access sensitive invoices.
We hope that you now have a better understanding of what invoice digitization is and how to use our 8- step process for business. If you enjoyed this article, you might also like our article on how to reduce a PDF file size without losing quality or our article about the difference between invoice and contract.