The term invoice automation can mean different things to different businesses
The term invoice automation can mean different things to different businesses. To a large group of companies, it means electronically capturing invoices and automating their processing – from data capture and validation to posting in the business’s financial system. With the advent of cloud-based solutions, the definition of invoice automation has become broader, encompassing not just the electronic capture of invoices but also their approvals, payments, and archiving. Over the years, the idea of invoice automation has changed rapidly. However, all of this has a really simple beginning.
Understanding the history of invoice automation:
The idea for invoice automation was born out of a need to streamline and improve the process of handling invoices. Businesses were looking for ways to be more efficient and effective in their dealings with suppliers, customers, and partners. In response, companies developed software solutions allowing businesses to automate various aspects of their invoicing process.
One of the earliest examples of invoice automation can be traced back to the early 1990s when a few forward-thinking companies began developing solutions that enabled businesses to capture invoices and store them in a central database electronically. This was a huge breakthrough as it allowed businesses to move away from paper-based invoicing completely. From there, the idea of invoice automation rapidly evolved, and different solutions began to emerge that would automate different stages of the invoicing process.
Nowadays, businesses can choose from many different invoice automation solutions on the market. These solutions can automate everything from capturing invoices and data entry to approvals, payments, and archiving. There is a solution to suit every business, regardless of size or industry.
The traction generated by invoice automation:
One of the major changes to the entire invoice automation process was the development of cloud-based solutions. The introduction of cloud-based solutions changed the whole landscape, making it possible for businesses of all sizes to take advantage of invoice automation. Before the introduction of cloud-based solutions, only large businesses with deep pockets could afford to automate their invoices.
The beauty of cloud-based solutions is that they are subscription-based, meaning businesses only have to pay for what they use. There is no need to make a huge upfront investment in hardware and software, as everything is hosted in the cloud. This has made invoice automation much more accessible and affordable for businesses of all sizes.
As a result of this increased accessibility, the uptake of invoice automation has been rapid. In just a few short years, the number of businesses using some form of invoice automation has increased significantly. This is partly because companies are now more aware of the benefits of invoice automation.
Benefits of invoice automation:
There are many benefits associated with invoice automation. Perhaps the most obvious benefit is that it can save businesses time and money. By automating various aspects of the invoicing process, businesses can free up valuable resources that can be better spent elsewhere.
Another big benefit of invoice automation is that it can help to improve cash flow management. This is because automating payments means that invoices can be paid much quicker. This, in turn, reduces the amount of outstanding debt and improves relationships with suppliers.
Invoice automation can also help to improve the accuracy of invoices. This is because solutions like e-Invoicing can automatically capture data from purchase orders and match it up with invoices. This reduces the chances of errors and discrepancies, leading to disputes further down the line.
Finally, invoice automation can also help businesses to be more environmentally friendly. This is because paperless solutions help to reduce paper consumption.
Despite all of these benefits, there are still some risks associated with invoice automation that businesses need to be aware of:
Risks associated with invoice automation:
One of the biggest risks associated with invoice automation is the potential for fraud. This is because automated systems can be exploited by criminals who know how to exploit them. For example, criminals can create fake invoices and route them through an automated system to get paid. This type of fraud can be difficult to detect and often go unnoticed until it is too late.
Another big risk is data breaches. This is because invoice automation solutions often store large amounts of sensitive data in a central database. If this database were to be breached, the consequences could be devastating.
Finally, there is also the risk that businesses will become too reliant on invoice automation solutions. This is because these solutions can often do much more than automate invoicing. They can also provide valuable insights into spending patterns and trends. If businesses become too reliant on these insights, they may find it difficult to make decisions without them.
Despite the risks, invoice automation is still attractive for many businesses. This is because the benefits far outweigh the risks. Invoice automation can save companies time and money, improve cash flow management, and increase accuracy. It can also help businesses to be more environmentally friendly. However, companies need to be aware of the potential risks associated with invoice automation and take steps to mitigate them.