Invoice Management Using a Document Management System
Invoice Management Using a Document Management System
Managing invoices can be a challenging & time-consuming task, especially if you are procuring, storing, processing & approving thousands of invoices every month. Misfiled Invoices can get lost, and even filed invoices can get stuck at specific steps in the approval pipeline & nobody would come to know who or what is causing the delay. A document management system allows you to completely automate invoice processing tasks like importing new invoices from the drive to the central document repository, indexing invoices, archiving essential documents, linking related documents to their invoices, and much more.
Document management systems like GLOBODOX also offer workflow automation, which lets you design your own document approval process, define the number of approvers and communicate with everyone involved in the approval process within the app itself. This creates a transparent & process-oriented approach to managing invoices, which reduces unnecessary delays & reduces invoice processing hours.
What should your invoice management process look like?
Capture: Scanning & capturing physical invoices or capturing invoices from emails or local drives and importing them to the document management system.
Check: Checking the invoice follows the company’s set standards & guidelines.
Review & Approve: Authorized staff reviewing & approving the invoice.
Process & pay: Documenting the invoice and paying the recipient.
How do Document Management Systems Improve Invoice Management?
There are plenty of invoice management processes that can be improved using a document management solution. Let’s look at what they are in detail.
Document Indexing
Document indexing is extracting key metadata from documents like date, name, amount, invoice number, etc. This metadata can be used to categorize documents to find them faster. But extracting the metadata from thousands of invoices can be a tedious & long process, which can reduce productivity & increase errors.
Document management system like GLOBODOX have a built-in tool that completely automates document indexing, called Optical Character Recognition (OCR). OCR scans specific predefined areas on your documents and extracts the associated values. For example, you can direct the OCR to look at the bottom of every invoice for the final payable amount, by selecting that area on just one of the invoices. The OCR will then automatically scan & extract the final amount from all similar invoices, thereby reducing your work & accelerating the invoicing process.
Full-text Search
Another excellent use of OCR is enabling full-text search. Imagine you want to find an invoice with the word ‘Henderson’ in it, and you have no other information about the document like its file name, location in the system, etc. Most billing management software won’t be able to help you with this problem, but a document management tool with an OCR definitely will.
Every document entered into a system with OCR is automatically scanned when the file is imported or physically scanned. And once you enter the search query ‘Henderson’ in the search bar, OCR recalls every invoice with the word ‘Henderson’ in its content and presents all the relevant invoices in the search results, within seconds.
Archiving & Disposal
Archiving is the process of transferring documents to an Archive Database. Business invoices need to be stored for a minimum of 7 years as per the audit regulations in most countries. Audit protocols mandate that the invoices are authentic & unedited. Archiving allows you to automatically move the invoices from the Live Database to the Archive Database, thereby protecting them from getting edited or deleted by other users. Only users with privileges can access the archived invoices.
Similarly, disposal is the process of securely disposing of or deleting old & unwanted records. As stated earlier, invoices need to be stored for up to 7 years from their date of creation. But what should you do with them once they are no longer required? Simply choose an expiry date for the invoices and once the invoices reach their expiry date, the document management system will automatically move the invoices to the system’s recycle bin. Some document management systems also send you notifications about expiring or due documents, so that you can choose whether to delete the documents or extend their archive tenure.
Security
Invoices contain important information and it is important to ensure that this information doesn’t fall into the wrong hands. Most invoice & document management systems are more secure than your traditional emails & document-sharing apps. They offer advanced security features like document encryption, two-factor authentication (2FA), document tracking & more.
Document management software also has access control, which lets you grant or restrict accessing, sharing, editing & deleting privileges for your documents. For example, say you want to share your invoice with the marketing department but you don’t want to permit users to print or share it in any way. You can simply create a security group containing all the users in the marketing department & grant them only viewing privileges. Access control also allows you to control access to outgoing documents, clients & third-party accounting firms, to protect important information from getting leaked.
Workflow Automation
One of the most essential features of an invoice management system is the ability to create digital document approval processes for accounts payable. Workflow automation allows you to replicate & automate your entire document approval process within the system. You start by creating the invoice approval process by choosing which users need to approve which type of invoices.
Once you create the approval design, you simply select the document you want to assign the workflow and let the system take care of the rest. The document management system will route the invoice to the users, send notifications about the new approval task & automatically reach the accounting department once it’s got every user’s approval. This doesn’t just simplify the accounts payable process, it also improves productivity by allowing users to process & approve more invoices than they previously could.
Conclusion
Invoice management is a critical process for every type of organization, big or small. But managing thousands of invoices can take up a lot of time and result in filing errors. Document management systems give you an edge over the weight of invoice management problems & considerably reduce average invoice processing time.
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- Category: Publication
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