In a digital landscape which is constantly evolving, SMEs seem to be taking a long time to implement automation in the accounting departments — more specifically for processes relating to manual data entry from incoming paper invoices and receipts.
Concerns about implementing data extraction software typically relate to the fear of changing the way things are done at scale as well as the worry that these efforts won’t justify the overall spend.
And that’s perfectly normal. These days, automation is prevalent in so many areas from email automation, marketing, and sales pipeline automation to payment and CRM automation. Sometimes it can really feel overwhelming for teams to depend on technology for every single task.
But despite this fear of change, statistics highlight that SMEs do show concerns about not being productive enough or still dealing with manual workflows that slow staff down.
According to the Business Times article “Innovation Strategies for Singapore SMEs”, “SMEs are not exempt from the call to innovate and keep up with the times. Failure to do so tops the list of risks that these enterprises face in today’s challenging business environment.”
Regarding the industry types that are affected, the article highlights that “compared to the manufacturing and construction industries, business in the service industry — wholesale and retail trade, information and communications, and professional services — are more concerned about this risk, potentially due to the client-facing nature of the service industries.”
As SMEs wish to innovate and focus more on their core business, they need to have the right risk-management process in place to create a thriving and innovative environment as they continue to play an increasingly important role in the new global economy.
Going back to the idea of implementing new solutions which SMEs (particularly their AP and accounting departments) can benefit from— we know that such technology requires an initial cost, some implementation effort, and a change in mindset.
Start with Automated Data Entry for Invoices
But data entry belonging to the accounting department can be a great place to start minimizing the gargantuan amount of time and effort needed every month. And this is a pain point that so many companies keep voicing out.
Based on internal user research we did with our customers, we have identified that there is a real need for accounting departments to make the data entry process more productive.
Rather than using an Excel spreadsheet and receiving physical receipts and invoices from staff and suppliers, look at solutions that allow quick data extraction and digitization of paper documents.
As such, the need for SMEs to start automating tasks like invoice processing is evident.
In this article, we outline the top 5 benefits that AP teams can enjoy automated data entry — and provide some practical tips to understand the ins and outs of data extraction for invoices and receipts.
1. Save Time
It’s a fact that automated data extraction considerably reduces the time spent on invoice processing.
This allows the accounting department to drastically reduce the time of manually processing a single invoice up to 80% depending on the complexity.
Automated data extraction solutions include intelligent algorithms with self-learning capabilities and typically don’t require any layout configuration, rules, or templates. This saves a great deal of effort in the implementation phase as SaaS solutions can be rolled out very fast.
Our tip: One reason why accounting departments struggle with invoice handling is that the process is very time-consuming and labour-intensive.
To make the process sustainable, use automated data entry software to minimize the time spent on such tasks. Simply capture data digitally and then export it into your accounting system.
2. Become More Productive
Today, accounting departments deal with thousands of documents to process, analyze, and transform in order to carry out daily operations.
Examples include receipts, invoices, statements, and contracts, so it’s important to be able to understand the information embedded within such data.
Thanks to intelligent data extraction, it is possible to do the same tasks, but in less time — and with reduced errors. This means less double-checking and repetitive tasks and higher productivity and efficiency.
Our tip: When using a data extraction solution, you should be able to simply drag and drop your PDF invoices into a dedicated portal or email them to a designated email address.
You no longer need to do anything manually. Instead, the solution reads your document quickly and accurately, pulling the data your accountant needs.
Your accountant then reviews this data and books it into the accounting system. The solution then stores your document in the cloud to ensure compliance and easy access.
3. Enjoy Accuracy
Automated data extraction processes lead to accurate and faster results compared to staff performing the same tasks manually.
Users can process invoices with higher precision not worrying that more pairs of eyes need to double-check the fields or manually fill them out.
Such an end-to-end solution provides complete visibility and a full audit trail which is a key element to gain better financial control and overview.
Our tip: Don’t settle for a traditional OCR solution only.
Instead, use an application which offers a combination of machine learning, powerful validation logic and human verification for exception handling to reduce the time spent on data entry and begin to enjoy enhanced efficiency.
4. Reduce Costs
Since there is no need to configure rules or templates — compared to traditional template-based OCR solutions — implementation costs, labour, and operational costs will decrease considerably.
Together with increases in system productivity and a reduction of errors, the actual costs for automation will yield significant returns in a short period of time.
This capability eliminates the need for human validation when processing invoices and allows accounts payable departments to receive optimal results for an even better ROI.
5. Build Better Relationships and Processes
By eliminating human error from the invoice process, no invoice will be forgotten. As a result, no penalties for late payments, no phone calls from suppliers, and no rushed invoices will arise.
This all leads to better relationships with partners and improved financial performance in the long run.
Also, by extracting the required fields from invoices, you automate your Accounts Payable processes and avoid inputting information manually helping you improve business processes and unlock the value of untapped data.
In the end, not only will this technology reduce the number of touch-points managers go through, but they will also be presented with comprehensive reports, without having to examine vast amounts of documents or data.
Our tip: By digitizing the document handling process, you free up resources to focus on value-added offerings and build long-term relationships with your partners, clients, and suppliers.
After all, partners want to work with companies who can bring them a range of different finance, business, and tech services driven by real-time data that the paperless approach delivers.