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Why Automating Invoice is a Good Idea in Procure-to-Pay (P2P) Process

Posted On: Jan 05, 2024
Why Automating Invoice is a Good Idea in Procure-to-Pay (P2P) Process

One of the most critical functions in the Procure to Pay (P2P) process is Invoicing. This is quite a complex and critical stage, which includes receiving invoices, recording and matching, approving, processing payments, and finally archiving them. All of this is usually managed and controlled by an accounts payable (AP) team. Each invoice, right from collection to releasing the payment, is full of manual labor and follow ups. Now multiply that with every invoice an organization must process. What you get is slow processing, lost invoices, delayed payments, double payments, etc. In such a situation, an automated invoice processing solution can be a game-changer for AP teams. It can diminish the risk intrinsic to manual tasks and lessen the number of steps and workforce involved in AP workflows.   


What is Automated Invoice Processing?   

Automated Invoice processing is a system that completes invoice processing without much manual interference. It simplifies and automates the accounts payable process by extracting, populating, and managing invoice data that will make the payment process happen in just a few clicks.  

How to Automate Invoice Process?

While invoicing and payment come almost at the last stage of the P2P process, this is one of the most critical processes as it has the biggest impact when it comes to managing vendors. An automated invoicing would automate steps, including data entry and calculation of an invoice, integrating it with accounting software, customizing it, setting it up for approvals, and payment processing. A Robust vendor management system could help organizations automate most of the P2P process, including invoicing.     

What is a P2P process?  

"P2P" stands for "Procure-to-Pay," and it refers to the entire process of requisitioning, purchasing, receiving, and paying for goods or services within an organization. The Procure-to-Pay process involves several steps that are interconnected and designed to ensure that goods and services are acquired efficiently, at the right cost, and in compliance with organizational policies. A robust Vendor management system helps automate the entire P2P process efficiently with cost optimization.   

What is a Vendor Management system?  

A vendor management system is a centralized platform to store data and assists businesses in managing and collaborating with vendors effectively. The system enables seamless vendor onboarding, monitoring their performance, and ensuring adherence to compliance standards. A proficient vendor management system like Partner Portal optimizes how organizations engage with their vendors.    

Partner Portal, a cloud-based vendor management system, allows significant support such as easy vendor onboarding, automated procurement process, invoice generator, vendor performance management, easy & real-time inventory management, and many more. Its smart dashboard offers transparent visibility of vendors as well as organizations.   

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What are the benefits of Automated Invoice processing?   

Automated Invoice processing provides real-time insight into the cash flow and allows on-time payment to the vendors. Besides all this, automated invoice processing offers various benefits.   

Some of the benefits are:   

  • Lessen the error rates. Fewer manual entries mean less room for mistakes.    
  • Faster the approval process and decreased processing times.   
  • Employees are free from monotonous tasks and get more time to spend on business-critical tasks.   
  • Rare chances of duplicate invoices and payments.   
  • Builds a healthy relationship where vendors and organizations both have a more transparent process.    
  • Cut down the costs of manually processing invoices (postage, paper, etc.)   

How does Partner Portal automate invoice processing?     

Partner Portal helps organizations and vendors to have real-time insight into their finances. Its cloud-based solution automates invoice generation, recurring billing, and schedule reminders for overdue payments. It results in reducing manual efforts, minimizing errors, and improving efficiency. With its automotive procurement process, the system allows organizations to track payments, enhancing visibility and accountability.    

The portal can automatically generate invoices once products are shipped based on product prices updated by the vendors. It also automates a 3-way matching process that compares the purchase order, the vendor's invoice, and the delivery receipt. So that organization can ensure accurate financial reconciliation and prevent billing errors. This feature verifies the invoice and process to make payment to the vendors. Partner Portal enables organizations to automate end-to-end procurement and scale it up or down to meet their needs.        


What are the advantages of automated invoice processing?   

Automated invoice processing helps in managing the receipt balancing process in a completely automatic system. It saves time and money for an organization by reducing manual processes, minimizing error, and improving accuracy.    

Why is automated invoice processing important?   

By leveraging automated invoice processing, an organization can avoid duplicate invoices and late payments. It also helps in building better relationships with vendors and enhances cash flow.   

What process should an automated invoice management system follow?   

Any automated invoice processing workflow goes through three stages:   

  • The process of reading or capturing invoice data.     
  • Interpret or verify invoice data based on business rules.     
  • Adding data into ERPs and accounting systems.     
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