How to automate invoicing processing in 5 steps for improved cash flow

Automated invoice processing is the use of software to automate invoicing tasks like data entry, validation, matching, and approvals. To do this, the software uses sophisticated algorithms and machine learning capabilities to quickly capture, interpret, and process data. By automating these traditionally manual tasks, you can drive accuracy and speed across the whole invoicing process. Brex offers bill pay software that automates invoice capture and line itemization, payment drafting, approval flows, and reconciliation — saving timing and controlling costs.

Let's take a closer look at the difference between manually processing invoices and automating them.

In the manual approach, finance teams end up doing everything by hand — even working with physical invoices themselves — and get stuck inputting data, checking and rechecking details, and managing approvals. Almost every part of the workflow is time-consuming and prone to errors, requiring many steps to be redone and dragging out the entire lifecycle of an invoice from initial receipt to the GL recording.

But with automated invoice processing, you’re essentially giving your finance team a powerful assistant to help automate the process and prevent accounting errors. Software steps in to do the heavy lifting like capturing, checking, and processing invoices in record time. Errors are minimized, and approvals happen in a flash.

This shift isn't just a minor tweak; it's a whole new way of doing things. By freeing your team from tedious tasks, automated processing allows them to focus on more important projects — like analyzing data to solve bigger-picture challenges that can help your company stay ahead of the competition.

Simply put, automated invoice processing saves hours each day for your finance team (and saves money for your business), unlocks more accurate numbers, and even keeps information more secure. For example, companies that use Brex bill pay’s invoice-capture technology are saving hours each month with up to 10x greater accuracy compared to manual entry.

When it comes to successfully automating invoicing, there are several integral steps to know. The first step is capturing information, which sets the stage for how the rest of the invoicing process will pan out. Then, certain tools and technologies are needed to extract and validate the data. After that, the data needs to be routed to the right approvers based on specific rules and factors. Finally, payments are ready to be processed and coded into accounting systems.

Invoice capture

1. Paper invoice scan

For those still receiving physical invoices, scanning is the gateway to digitizing these documents. With a simple scanner or scanning app, paper invoices are transformed into digital files ready for processing — ensuring that even traditional paper invoices can integrate into your automated workflow.

2. Electronic invoice upload

Today, many invoices arrive electronically as PDFs via email. And uploading these electronic invoices is a breeze — the file can simply be uploaded directly to your automated invoice processing system, saving time and minimizing the risk of manual data entry errors. Brex bill pay allows you to drag and drop the invoice, or even forward it by email, and the software will auto-capture the information to draft a payment.

3. Direct invoice capture from vendor portals

Some vendors offer online portals where invoices can be accessed and downloaded directly. With automated invoice processing, these portals become treasure troves of digitized invoices since there are integrations that can connect with the portal to retrieve the invoice. Additionally, other automated invoice processing software — including Brex — offers self-service options for the vendor to upload invoices via unique, secure links where the invoice information will then be auto-captured.

Brex offers a user-friendly interface that makes it easy to upload invoices in various formats. Once we receive the invoice, our system uses AI to automate the invoicing and bill pay process — including capturing every itemized detail, suggesting a matching PO, and drafting a bill payment.

Data extraction and validation

Next up is extracting the data from the invoice, as well as validating the data — and this is performed with Optical Character Recognition (OCR) technology. You can think of OCR tech as the eyes of the system: with remarkable precision, it automatically captures crucial data from invoices, such as vendor names, invoice amounts, and due dates. By "reading" the text on invoices, OCR tech transforms them into structured data that can be processed and analyzed with ease — eliminating the need for manual data entry, saving time, and reducing the risk of errors.

Once data is extracted, AI steps in to ensure its accuracy. AI plays a crucial role in validating extracted data, cross-referencing it with existing records and identifying potential discrepancies. This allows for automatic corrections or flagging for manual review, ensuring that only accurate data moves forward in the processing pipeline. With AI-powered invoice matching, businesses can trust that their invoice data is reliable and error-free. With Brex bill pay, companies can reduce errors by 10x with powerful invoice-capture technology, versus manually entering everything.

Handling complex invoices with varying layouts and formats can be a challenge for traditional systems — but Brex's powerful AI capabilities are up to the task. Whether it's invoices with unconventional layouts, unexpected variations, or amounts in international currencies, Brex AI can handle them with ease — ensuring accurate data extraction every time. This capability gives businesses the confidence to fully automate their invoice processing, regardless of the complexity of their invoices.

Data extraction and validation are the cornerstones of automated invoice processing. With OCR tech capturing key data and AI ensuring its accuracy, businesses can streamline their accounts payable processes and unlock newfound efficiency. And with Brex's advanced AI features, even the most complex invoices can be processed securely, empowering businesses to embrace automation with confidence.

Invoice approval workflows

Now we’re ready to get into the review and approval process for vendor invoices — which can be infamously known as the part of the process involving the most bottlenecks. But in automated invoice processing, companies can control many more aspects of reviews and approvals than with manual processing — such as who reviews, how many reviews, and so on. They can even expedite each part of the approval flow with different features like structured review chains, notification alerts, and more to ensure timely bill payments. Brex takes it a step further by offering customizable rules based on factors like invoice amount, vendor category, or project code, automating bill pay. This allows companies to tailor approval workflows to specific needs, and ensures efficient and compliant processes.

With automated workflows, routing invoices for approval is a breeze. You can set predefined rules so invoices auto-route to the right approver for review and authorization, and in the right order, if multiple approvers are needed. Whether it's a department head, project manager, or finance controller, each invoice is directed to the right person, ensuring accountability and compliance with internal policies. By adding more control automatically, this routing process not only saves time but also reduces the delays and errors that come with manual handling.

Brex puts the power of automation in the hands of users. Setting up approval workflows, assigning approvers, and tracking the status of invoices can all be done with ease, thanks to a user-friendly, AI-powered platform. With real-time visibility into the approval process, finance leaders can stay informed and take action as needed, ensuring that invoices are processed efficiently and payments are made on time.

Payment processing & integration with accounting software

One key advantage of automated invoice processing is seamless integration with popular accounting systems like QuickBooks or NetSuite. When invoices are approved, they can easily flow into your company’s accounting platform for payment processing — giving you hours of time back and making sure everything is accurate.

Gaining real-time visibility into cash flow becomes a reality, helping company leaders to make informed, data-backed financial decisions. Plus, integration simplifies the reconciliation process, allowing for smoother audits and financial reporting.

Brex takes integration seriously, too — utilizing secure and reliable APIs to directly connect with your accounting system. And this level of integration eliminates the risk of data breaches or errors during the payment process, too, so you can trust that your company’s financial data is safe and that payments are processed accurately and efficiently, every time.

By easily integrating with accounting softwares, automated invoice processing helps the finance function unlock newfound efficiency, accuracy, and visibility into cash flow.

In the manual approach, invoices might be paper-based. This means invoices may be literally traveling back and forth between departments, adding extra time for each step. Someone receives an invoice, reviews when they have time, then passes it to the next person. That person also reviews (when they have time), and sends to the next person — and so on. Depending on the type of invoice, there might be several people needed to sign off for approvals. On top of all this, extra time is needed for entering data, filing, processing payments, and coding into accounting software, versus accounting ERP integrations that occur with automated processes. No wonder the manual approach takes 14.6 days per invoice.

Delayed and missed discounts

When approval cycles get delayed, payments are delayed. Many vendors have agreements on when payments are due, such as net 30 or 60 days. But, once payments are received past those dates, they may incur late fees. What’s more, late payments can cause frustration and tension with vendors, and may even lead to losing the relationship and access to their goods and services. This can impact your company’s ability to stay competitive, and it might involve some time to search for and get approval on a new vendor. By automating approvals, payments are more likely to be paid on time, saving money and maintaining strong vendor relationships.

Errors and inaccuracy

During manual invoicing, there’s a bigger chance for human error. This can fall anywhere between paying an invoice before receiving services, to making mistakes in the process of manually matching the purchase order, receipt, and invoice. Finding and fixing each of these problems involves even more time, can lead to duplicate invoices, and requires time for voiding or resubmitting payments. But during automated manual processing, everything is tracked digitally, allowing accounting teams to manage invoices even from an iPhone app. With Brex, you can also set up notifications based on various controls and settings, search invoice data easily, set up reminders, and even use AI to match purchase orders. Plus, you’ll have full visibility into payment tracking, real-time financials, and other insights that can help with accurate budgeting and forecasting.

With more hands-on intervention in manual invoice processing, there’s a bigger risk of both internal and external fraud, with cybercriminals impersonating executives or suppliers to receive payments — plus other risks like financial statement access and manipulation. But with automated invoice processing, you can digitally track who makes payments, how much was paid, and when it happened. And the software is usually built on top of a platform that’s designed to protect data. For example, Brex’s secure platform ensures authentication with encryption, idle lockouts, two-factor authentication, and more. Plus, you can implement other controls like separation of duties, using software to assign each employee a different role to set up a system of checks and balances.

Lack of visibility and control

With paper-based invoice trails, finance teams get stuck spending hours keeping track of physical invoices and inputting information manually — only to then spend even more hours setting up spreadsheets and plugging data into other software by hand to then get analyzed. With the automated approach, you can let AI assist with invoice capture and entry, identify spend trends, and generate customizable reports.

Wasted resources and inefficiency

Probably one of the most frustrating aspects of manual invoice processing can be the amount of time and resources it takes to process the invoice from beginning to end. All of the costs can add up, too: beyond the salaries of those dedicated to manual processing, there are expenses for storage, filing, and retrieval of documents, all contributing to the bottom line. These inefficiencies not only strain operational efficiency but also limit the agility and responsiveness of finance teams in today’s fast-paced business environment. Automated invoice processing offers a compelling alternative, promising to streamline operations, reduce errors, and free up skilled employees to focus on driving growth and innovation.

Step 1: Analyze your current invoice process

Before diving into automation, it's important to take a careful look at your current invoice processing workflow. Evaluate how invoices are currently handled — whether manually entered or semi-automated — and identify any existing barriers in approval workflows. Consider the volume and types of invoices processed, too, to gauge scalability needs. This will all help paint a clear picture of inefficiencies and areas for improvement, guiding you to select the right automated solution that can address your specific pain points.

Step 2: Define your needs and goals

Clearly outlining your business needs and goals is also key for successful automated invoice processing. It’s helpful to define your budget and expected ROI, considering factors like cost savings and increased efficiency. You’ll also want to identify integration requirements with your existing accounting software to make sure your data can flow between tools seamlessly. It’s also helpful to know which features are table stakes, such as robust data extraction capabilities, vendor management tools, and scalability to accommodate future growth. Aligning these goals with broader business objectives — such as faster processing times, reduced errors, and improved data visibility — ensures that automation efforts contribute directly to strategic outcomes.

Step 3: Find the invoice automation software right for your business

Choosing the right invoice automation solution is critical. Here’s a comprehensive checklist of essential features to look for:

• Ease of use and intuitive interface: Simplifies adoption and reduces training time.
• Scalability: Accommodates growing invoice volumes and expanding operations.
• Integration capabilities: Seamlessly connects with your existing accounting software, ensuring data consistency.
• OCR tech: Enables efficient data extraction from invoices, minimizing manual entry.
• Workflow automation: Automates approval processes, improving efficiency and reducing processing times.
• Data security and compliance: Ensures sensitive financial information is protected and meets regulatory requirements.

Each feature above boosts operational efficiency and is designed to support your company’s strategic financial management objectives.

Step 4: Integrate automated invoicing with existing accounting software

Integration between invoice processing software and your current accounting software is crucial for smooth operations (and happier accounting teams). Seamless integration eliminates data silos, reduces duplication errors, and accelerates financial reporting. For example, with Brex, you’ll have peace of mind with robust integration capabilities that connect easily with popular accounting platforms — including our award-winning NetSuite integration, and integrations with QuickBooks, Xero, and others. This ensures that your finance team can focus on strategic initiatives instead of getting held up with busywork.

Step 5: Train and onboard employees

All of the benefits of automated invoice processing won’t be made possible without effective training and onboarding for your employees. Providing training sessions that cater to different learning preferences, such as online tutorials and in-person workshops, can ensure that your employees become proficient with the new platform, minimizing disruptions. And by offering ongoing support and resources, your teams will be able to continue following the new process for the long haul. By investing in employee readiness, you’ll be reinforcing the success of the new platform.

In addition to thorough onboarding and implementation support from signup, Brex offers ongoing, 24/7 customer support via live chat, phone, SMS, and WhatsApp. This helps employees quickly learn how to use Brex, supports their needs beyond the implementation phase, and helps finance leaders get the best return on their investment in the program. "Brex’s dedicated implementation support had the whole organization up and running with corporate cards in less than a week," said Arlene Barbieri, Corporate Financial Controller at Medicinal Genomics. “I told our CEO that the transition would be easy. Thanks to the Brex team, I was able to keep my word."

As businesses navigate an increasingly digital landscape, the demand for efficient invoice processing solutions continues to grow. Automated software like Brex can help offer a platform that not only streamlines financial and accounting operations but also enhances accuracy so that leaders have real-time data to steer their company in the right direction.

With Brex AI and use of features like OCR tech, your teams can automate the process of extracting itemized pieces of data from a variety of invoice formats — eliminating manual data entry errors and speeding up turnarounds so that information is processed swiftly and accurately.

On top of that, Brex's auto-matching capabilities for validating invoices against POs and receipts reduces discrepancies — not to mention, enhances compliance.

Brex also gives businesses the option to tailor approval workflows to specific needs — including automating each consecutive approval, notify when content is ready for review, and notify a specific person when all reviews are completed. Whether managing approvals hierarchically or by exception, Brex can flex to any organizational structure seamlessly, optimizing efficiency without compromising on compliance.

Automated invoicing isn't just about efficiency — it's a strategic advantage that can transform financial operations. By leveraging Brex's advanced capabilities, businesses can streamline invoice entry, approval, payment, and reconciliation processes with unprecedented speed and accuracy. This not only reduces operational costs but also frees up valuable resources for more strategic initiatives.

Discover how automation can propel your business forward by scheduling a demo today and see firsthand how Brex can empower your team to achieve greater efficiency and financial agility.