5 efficiency tips for digital invoice processing

How do invoices arrive at a company, and what stages do they go through before being paid? A recent study on digitalisation in accounting reveals that more than half of the companies surveyed still handle invoice receipt processes manually. This means tasks such as verifying invoices, distributing reports, making entries, or processing payments are hardly digitalised. Yet, the digitalisation and automation of invoice receipt hold enormous potential for improving efficiency. What this means for day-to-day accounting operations is illustrated by the following five reasons for digital invoice receipt.

Overview and control in multi-subsidiary organisations

As businesses grow, merge, or expand into new sectors, subsidiaries often retain their existing processes and departments, particularly if they operate in diverse industries. This increases complexity for corporate management.

Invoice receipt is just one process, but it highlights the issue: invoices do not arrive at a central location but are processed at various sites by different employees. While this may work for individual entities, challenges arise when an organisation requires a comprehensive overview or when invoices are sent to the wrong location.

Invoices might also be received by specific departments and remain unattended. In some cases, a company may only become aware of an invoice after the dunning process has begun, leading to additional effort and costs to resolve issues with suppliers. The list of potential complications goes on.

By the end of the financial year, the challenges posed by heterogeneous corporate structures often become evident. Automating invoice receipt can address these issues in just a few steps. Electronic invoices are directly imported into the system, and paper invoices are scanned with their content recognised via text recognition. This allows approvers to view and process invoices at any location. Invoices no longer get lost, and processing times can be reduced by up to 65%.

Invoice approval anytime, anywhere

Once an invoice is received and recorded in the accounting software, the next step is processing the payment. This begins an approval process that may involve two or more responsible individuals, depending on the organisation. These individuals may be in different locations, on business trips, unavailable due to illness, or otherwise unreachable. Besides a factual review by the responsible parties, payment approval usually requires a supervisor’s final sign-off. Ideally, all of this should happen within the discount period to save money.

In many cases, however, this process does not run smoothly, as invoices are often passed around – sometimes not even via email. In extreme cases, those involved may not even be aware of their pending approval tasks. For many companies, this remains a laborious manual process.

Invoices captured electronically offer several advantages here. Scanning and assigning an invoice to a cost centre can automatically initiate the approval process in the software. Responsible parties are notified via email and reminded to complete the necessary review or approval with just one click through a web interface. Final payment approval is also integrated into this process, with the ultimate click resting in the decision-makers’ hands, as even payment proposals can be incorporated into the workflow.

Transparency: stay informed at all times

What is the status of an invoice? The typical answer might be: "in approval" or "probably already in the payment process." This is vague and implies that no one truly knows the exact status of a particular invoice.

In an automated invoice receipt system, the answer is straightforward: simply check. Every participant in the process can view the current status of an invoice at any time, track the approval history, and see the payment status – an invaluable benefit for users and decision-makers.

Another significant advantage of electronic invoice receipt and processing is evident in liquidity management and budget control. From the moment an invoice is scanned, it is pre-coded based on templates. This means the document is already reflected in the latest figures, even if it has not yet been approved. Budget and liquidity statements for a department or the entire company can therefore be made almost in real-time. Reporting on costs and liquidity is also comprehensive and leaves no questions unanswered. Waiting times for booked items or unexpected issues are minimised.

Staffing shortages: fewer errors, faster processing

In many organisations, hundreds of invoices are received each month. The manual steps involved in processing them can take several days. Just as in manufacturing, automating processes in invoice handling is key to efficiency. Not only does this significantly reduce processing times, but it also minimises errors. Automation starts as early as the invoice receipt or scanning stage.

Technologies and standards like OCR (Optical Character Recognition) and ZUGFeRD (a data exchange format) come into play here. Data such as VAT numbers are automatically recognised and assigned within the software.

What used to take at least four manual steps – viewing, assigning, verifying, and reconciling – now happens in moments during the digital capture process. This can result in time savings of over 50%. Additionally, the increased convenience of electronic invoice processing offers participants transparency at all times.

Know where everything is: compliance with archiving regulations

Accounting is often referred to as the "department of many folders." The previously mentioned flood of paper invoices must be archived somewhere. In the event of an audit, auditors are often presented with literal truckloads of binders from the invoice archive. While this sounds archaic, it remains common practice in many companies. However, as offices become increasingly paperless, organisations are turning to digital solutions.

It’s important to note that even digital documents, such as incoming and outgoing invoices, must comply with legal storage requirements, such as those outlined in the HGB (German Commercial Code), AO (Tax Code), or GoBD (Principles for the Proper Management of Computerised Accounting Records). Here, automated processes ensure all documents are archived and associated processes logged. This makes the storage of digital invoices audit-proof. Companies should carefully select providers with certified data centres and cloud services as standard.

The digital invoice process with FTAPI

Implementing a digital invoice receipt system is quick and straightforward and works as seamlessly as sending emails with FTAPI. A digital form set up on the company’s website ensures a structured and secure digital data intake channel. The individual input fields can be configured to meet specific needs and request all relevant supplier information.

These structured documents are then processed automatically by downstream systems within the company and archived in compliance with legal regulations. Internal processes are optimised, cycle times reduced, and costs lowered. Digital invoice receipt enables faster processing and helps prevent late fees and missed discounts.

The growing trend towards electronic invoices (e-invoices) is further driven by legal requirements. The EU Directive 204/55/EU mandates electronic invoicing for public contracts. Accordingly, all suppliers to public authorities in Germany, Austria, and Switzerland are required to issue their invoices electronically.