Optical Character Recognition and E-Invoicing
Automation of business processes has become the single objective of every multinational corporation. Automation saves a lot of money in the long run. It also streamlines the process and makes it more robust. In the recent past, two technologies have helped companies automate their accounts payable departments. These two technologies are optical character recognition and e-invoicing. In this article, we will have a closer look at these two technologies as well as their advantages.
Optical Character Recognition
In the past, companies had an accounts payable department. The task of this department was to collect all the paper invoices from their supplier. The information from these paper invoices had to be entered into the system. Once this information was present, all the boring stuff like taking approval for invoices, and actually paying invoices also had to be done manually. This process was obviously very expensive and wasteful. A large number of people had to be hired to do mindlessly do data entry jobs.
The introduction of optical character recognition technology has brought efficiency and cost-effectiveness to the process. The steps followed to manage invoices via optical character recognition (OCR) process have been mentioned below:
Although the optical character recognition (OCR) technology-driven processes might seem to be a godsend, they also have their disadvantages.
E-invoicing is different from optical character recognition (OCR). It can be said to be the next level of technology. This technology recognizes the fact that the disparity between the vendor and the companys system leads to duplication of processes. For instance, there is a person employed at the suppliers end to create an invoice. Then another person needs to be employed by the company to enter the same invoice. Instead, if the two systems were connected, the information entered once could be electronically transmitted to the other system and the duplication of efforts could be stopped.
E-invoicing tools provide a common platform where suppliers and customers can enter information and transmit to the other party. Since these tools are connected to the ERP systems of both parties, they can provide real-time status updates, and the coordination effort between the two departments is also drastically reduced.
Most e-invoicing tools give flexibility to their customers. This means that both parties can decide the extent of information that they want to share with their counterpart. The idea of e-invoicing has been derived from the idea of a paperless office. All information including purchase orders, invoices, credit notes etc. is transmitted electronically.
To sum it up, there are a lot of tools in the market which allow for easy automation of the accounts payable processes. The adoption of these technologies is increasing at a fast pace. Within a few years, these tools will become standard and accounts payable processes as we know them now would have become obsolete.
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