What’s Bill Processing? – Bill Processing Defined

So simple as it might sound – obtain the bill, test for correctness, pay the bill, shut the transaction – bill processing, usually, will not be a easy workflow.

Any delay or disruption in processing invoices can have a adverse affect in your relationships with suppliers and hinder the well timed supply of companies, provides, and supplies. Almost 1 in 5 corporations lose out on beneficial phrases and discounted charges because of delayed vendor funds brought on by ineffective bill processing.

Allow us to see how bill processing works, a few of the main challenges in doing it manually, and the way AP automation software program like Nanonets can streamline the complete course of.

What’s bill processing?

invoice processing flow chart with steps

Bill processing or invoice processing is the entire gamut of operations related to the business-end (pun unintended) of buying services or products from a vendor.

Bill processing is the workflow adopted by the accounts payable staff from the time it receives a provider bill. It encompasses all of the steps proper from receiving a vendor’s bill to recording the cost after applicable checks & approvals.

In medium and enormous sized corporations, bill processing is a part of the general accounts payable course of.  Processing invoices effectively is essential not solely to prepare  cash-flow but in addition for dealing with distributors/suppliers to make sure well timed procurement.

The bill processing workflow: Learn how to course of invoices?

An bill could be processed for cost solely as soon as it clears all of the bill processing steps. Let’s take a look at the bill processing steps intimately:

  1. Acquire and organise invoices despatched in by way of a number of channels: electronic mail, put up and so forth.
  2. Seize bill information, assign common ledger codes and match the bill information with supporting paperwork (POs or receipts) — in case of discrepancies, the bill is returned to the seller.
  3. Ship invoices to licensed approvers to approve or reject, primarily based on inner spend insurance policies.
  4. Arrange funds by way of wire switch, ACH or test for the accepted invoices.
  5. Document the cost in your ERP or accounting software program.

invoice processing workflow - step by step
bill processing workflow – step-by-step

Challenges in processing invoices manually

manual invoice processing woes

Bill processing can get fairly tedious. Listed here are a few of the most urgent challenges AP groups or finance personnel face whereas dealing with bill processing manually:

Missed or misplaced invoices

Misplaced or missed invoices result in delayed funds, late cost charges, strained vendor relationships, delays in operation, and potential audit points. It is a drawback when an organization offers with a number of distributors that ship in a number of invoices on a month-to-month foundation.  The issue is exacerbated by the truth that invoices could be obtained by completely different personnel, in varied codecs, by way of a number of sources.

Inaccurate or lacking information

An bill incorporates important information comparable to firm IDs, tax info, service/product equipped, worth, supply standing and so forth. Since invoices are available in varied codecs, capturing & verifying all related bill information manually turns into fairly error-prone. Bill errors result in each financial and time losses.

Almost 40% of invoices include errors. And practically 1 / 4 of all invoices are flagged for exceptions that have to be addressed by the accounts payable staff. Errors in paper-based invoices are fairly costly to repair – $53.50 per bill on common!

Bill approval routing errors

Manually routing incoming invoices to particular stakeholders for approval can get very difficult. Particularly when you cope with a number of distributors and have a big organisation. Even probably the most environment friendly AP specialist could make a mistake in manually routing an bill to the suitable approver/stakeholder. This “high-touch” state of affairs is especially anxious, particularly when the AP staff should shut books periodically.

Unknown bill standing

Guide bill processing retains distributors just about at nighttime, until they attain out personally for updates. Listed here are some frequent questions that distributors have because of the lack of transparency: The place is my bill?  Who has accepted it What extra does it want?  When will the cost be processed?  

Flagging duplicate invoices

A mean AP at a medium scale organisation clerk processes wherever between 600-800 invoices a month. Figuring out duplicate invoices or potential vendor fraud manually is near unattainable!

Automated bill processing

Guide bill processing is a ache. Near 60% of AP personnel reportedly discover bill processing probably the most detested a part of their job. Automating most of the repetitive duties of the method can preserve time, get monetary savings, protect worker morale, and keep good vendor relationships.

Automated bill processing is the method of seamlessly extracting information from invoices getting into your system and pushing it into your ERP in order that processing a cost could be completed in only a few clicks. AP automation software program assist automate most of the guide steps concerned in bill processing.

Accounts payable groups use AP automation or automated bill processing software program to automate:

  • bill seize and coding
  • verification and matching of bill information towards POs and receipts
  • approval routing or auto-assigning approvers
  • and integrating or reconciling information into accounting or ERP software program

The automation of bill processing gives a transparent resolution to most, if not all the issues related to this guide course of.  Surveys carried out amongst personnel concerned in AP processes exhibits an amazing help for automating a majority of the guide duties.

Bill processing steps which can be a superb match for automation

Automated bill processing is clearly a greater possibility than guide bill processing. It is quicker, extra correct and value efficient in the long term. Here is a extra detailed take a look at the particular bill processing steps that would simply be automated:

  • Bill receipt: On condition that varied codecs of invoices are obtained from completely different distributors, computerized detection of the varied related fields within the bill would assist in digitization of the bill and higher administration of knowledge. OCR instruments come in useful right here.
  • Bill validation: It’s simple to arrange guidelines to test for information integrity and completeness in invoices. Populating the varied information fields within the bill database may help in detecting incomplete or lacking info.
  • Three-way matching: Invoices are sometimes raised in response to a PO and are sometimes related to a receipt. Automated matching of invoices, POs and receipts will hasten the validation course of and transfer the bill to the following stage with out delays.
  • Exception dealing with: Exceptions and edge circumstances aren’t unusual in bill processing. Edge circumstances could come up because of time zone adjustments, a number of recurring costs, retrospective worth changes, and currencies. Some AP automation software program, like Nanonets, can deal with these edge circumstances, whereas others may require differing ranges of human intervention.
  • The approval course of: Digital invoices could be moved alongside the administration hierarchy mechanically for approvals primarily based on preset enterprise guidelines. Or AI-based AP automation instruments can auto-assign approvers as properly.The organising of reminders may assist in hastening the method.
  • Fee: Digital funds (wire-transfer and so forth.) could be constructed into the software program to allow computerized cost to the seller as soon as all approvals have been obtained.
  • Analytics: Automation can allow evaluation and analyses of spend patterns and vendor relationships, which might assist in course corrections and productive enterprise choices. AI-based methods would permit higher analytics with extra coaching with invoices.

Nanonets for automated bill processing

Nanonets finish to finish automated bill processing

Nanonets is an AI-based AP automation software program that may streamline bill processing for your corporation. Cut back guide accounts payable effort, save time and sources, arrange controls, and acquire in-depth visibility into enterprise spends.

Relying in your bill processing or AP automation wants Nanonets can:


The automation of bill processing streamlines the acquisition course of, enhances transparency of the bill route, saves money and time, will increase worker productiveness, and improves vendor relationships. Bill move automation permits human workers to focus on much less mundane, higher-value actions comparable to planning and strategizing. These can, in flip, result in improved general effectivity and profitability of the enterprise.

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