Automated invoice processing means incoming invoices land in your accounts without anyone retyping them. Software pulls the invoice from your email, reads the supplier, date, amounts and VAT, suggests a ledger account and gets everything ready for approval. All you do is check and click approve.
For businesses with dozens or hundreds of purchase invoices a month, that saves a lot of time and typos. In this article you'll learn how it works, what role AI plays and how to set it up smartly.
What exactly is automated invoice processing?
With manual processing you open each PDF, type the details into your accounting package, look up the right cost category and file the invoice. With automated processing, software takes over those steps. It's mainly about purchase invoices: the invoices you receive from suppliers.
Sales invoices, the ones you send, you usually already create in your accounting or invoicing package. You can automate those too, for example by creating them automatically when a job in your schedule is marked as done. But the biggest time saving is often on the purchasing side.
How automated invoice processing works, from inbox to accounts
- Collect: invoices arrive at a dedicated email address, such as invoices@yourcompany.nl, or are uploaded or scanned.
- Read: the software recognises the supplier, invoice number, date, amounts, VAT and IBAN.
- Check: the system checks whether the invoice has come in before, whether the amounts add up and whether the supplier is known.
- Code: based on earlier invoices, it suggests a ledger account and cost centre.
- Approve: the right person gets a notification and approves with one click.
- Post: the invoice goes into your accounting package with the PDF attached, ready for payment.
How that last step works depends on your accounting package. In connecting your accounting software you'll read how such an integration fits together.
Reading invoices with OCR and AI
For a long time this was done with OCR: technology that recognises text in a scan or PDF. Classic OCR works fine, but often needs a template per supplier saying where each detail sits. If a supplier changes its invoice, it goes wrong.
AI is more flexible. A language model understands that "Total due" and "Amount payable" mean the same thing, even when they're in a different place. So it also works with new suppliers and messy invoices. AI does sometimes make mistakes, so a check is still needed. Read more about this technology in reading documents with AI.
E-invoices: the easiest route
Even better than reading a PDF is an invoice that arrives in a fixed digital format. UBL is one such standard: a file a computer can read directly, without recognition. Many accounting packages can receive and process UBL invoices. So ask your regular suppliers whether they can include a UBL file.
Peppol is a network used to send these e-invoices securely between businesses. If you work with government bodies or large clients, you'll often come across it. Check whether your accounting package supports Peppol.
What it delivers, and what you should keep checking
The benefits are clear: less typing, fewer errors, faster insight into what you have to pay and no more invoices lingering in an inbox somewhere. Your bookkeeper or accountant also has less to sort out.
An added bonus: you always have an up-to-date view of your outstanding purchases. You see which invoices are still waiting for approval, which need paying soon and what you spend per supplier or project. That makes it easier to plan your cash flow and make agreements with suppliers.
Do keep an eye on these points:
- New suppliers: always check the first invoice yourself.
- Changed IBAN: a common form of fraud. Have the system warn you when a known supplier's account number changes.
- VAT: check invoices with reverse-charge or foreign VAT extra carefully.
- Duplicate invoices: make sure the system recognises when the same invoice arrives twice.
- Amounts above a threshold: always have a second person approve these.
Off-the-shelf tool or custom invoice processing?
Many accounting packages have their own function for reading invoices. There are also separate tools that do it for a monthly fee. For many small businesses that's a fine start. Prices of such tools change, so treat amounts you find online as an indication and check the current price.
Custom work makes sense when you want more than just reading invoices in. For example when:
- Invoices need to be matched to a purchase order or project in your own software.
- Your approval route depends on the project, the department or the amount.
- Besides invoices, you also want to process packing slips, receipts or contracts.
- You work with several systems that don't talk to each other out of the box.
Common mistakes when automating invoices
- Trying to automate everything at once. Start with one flow, such as the invoices from your ten biggest suppliers.
- No dedicated email address for invoices. Then they stay scattered across personal inboxes.
- Removing the check completely. A quick human check prevents costly mistakes.
- Not involving your bookkeeper. They know which ledger accounts and VAT codes are correct.
- Forgetting that you're legally required to keep invoices for a number of years. Make sure the original PDF is always kept.
If invoices still arrive among all sorts of other email, it helps to get your inbox in order first. Read sorting emails automatically for that.
Automated invoice processing with Violexa
At Violexa we build automations that read invoices and other documents and put them in the right place, connected to your accounting package and your own software. We first check whether an off-the-shelf tool is enough. If it is, we'll tell you. If custom is smarter, we build it step by step. Read more under AI and automation.
An automation project starts from €1,799 excl. VAT (€2,177 incl. VAT), one-off. Larger projects get a fixed price in writing up front.
Want to know how much time you could save on processing invoices? Book a free quickscan. In 30 minutes, online or on site, we walk through how you work now. Afterwards you get short written advice with a price indication, with no obligation.
Frequently asked questions
How can I process invoices automatically?
Have invoices arrive at a dedicated email address and use software that reads them and gets them ready in your accounting package. Many packages already have this built in. For integrations with your own systems or your own approval route, you can have something custom built.
What is the difference between OCR and AI for invoices?
OCR recognises text and often needs a template per supplier. AI understands what the text means, so it also works with new or unusual invoices. In both cases a human check remains sensible.
What is a UBL invoice?
A UBL invoice is a digital file in a fixed standard that your accounting package can read directly. No recognition is needed, so it's faster and more accurate than a PDF. Ask your suppliers whether they can include UBL.
Is automated invoice processing reliable?
Usually, yes, especially with regular suppliers. Do check new suppliers, changed account numbers and large amounts. That way you combine speed with safety.
