For many businesses, managing invoices can feel like an uphill battle. Paper invoices pile up on desks, while digital ones are lost in a sea of email threads. Keeping everything organized and efficient is no easy task, but invoice scanning can make it a whole lot easier.
Invoice scanning is a straightforward yet effective way of streamlining your accounts payable processes. By converting paper invoices into digital data, you can combine invoices from various sources into one easy to manage system, reducing the need for manual data entry, speeding up workflows, and ensuring that your records are always accessible when you need them.
Whether you’re running a small business or managing finances for a large corporation, invoice scanning has the potential to transform your accounts payable department.
In this article, we’ll explore everything you need to know about invoice scanning. From how it works to its biggest benefits, you will learn why so many businesses are making the switch, and how you can too.
What Is Invoice Scanning?
Invoice scanning is the process of converting physical invoices into text-searchable digital data. Instead of relying on manual data entry to extract key details like invoice numbers, amounts, or due dates, invoice scanning automates the process, saving time and reducing errors.
The process begins by creating digital images of physical documents. These images are then processed with Optical Character Recognition (OCR) software, which captures and converts important details into structured data. This structured data can be searched, sorted, and seamlessly integrated with your existing accounts payable systems, making it easier to manage financial records and ensure accuracy.
How Does Invoice Scanning Work?
Invoice scanning is a straightforward process that turns what used to be a time-consuming task into an efficient and effortless workflow. The process can be broken down into four basic steps:
1. Capturing the Invoice
The process starts with capturing the invoice. For paper invoices, this means scanning the document to create a clear, high-quality digital image that’s ready for further processing. Digital invoices, such as PDFs or email attachments, can be uploaded directly into the system, combining both physical and digital invoices into a single system, allowing businesses to manage all their records in one place.
2. Extracting Key Data
After the invoices are digitized, Optical Character Recognition (OCR) software takes over. This technology identifies and extracts important details, such as invoice numbers, vendor names, dates, amounts, and line items, directly from the digital images. By automating this step, OCR ensures that data is captured quickly and accurately, significantly reducing the need for manual data entry.
3. Validating the Information
After data is extracted, the next step is validation. This ensures the information captured is accurate and complete. Validation might involve checking the extracted details against existing records or verifying that all the required fields like amounts and due dates are correctly captured.
4. Integrating with Accounts Payable Systems
Finally, the validated data is sent to accounts payable or ERP software. This step allows the invoice details to flow seamlessly into your existing workflow for processing, approval, and payment. Integration is what makes invoice scanning such a powerful tool for automation.
Through these very simple steps, invoice scanning eliminates much of the manual effort commonly associated with traditional invoice management. The result is faster, more accurate processing and a fully paperless AP workflow.
What Are the Benefits of Invoice Scanning?
Invoice scanning brings a range of advantages that make it an essential tool for businesses looking to streamline their accounts payable processes. From saving time to improving accuracy, here are a few of the biggest benefits:
Reduced Errors
Manually entering invoice data is time-consuming and prone to mistakes. Using OCR technology to extract data automatically significantly reduces the risk of human error. This accuracy ensures payments are processed correctly and on time.
Faster Processing Times
Invoices can be processed in minutes instead of hours or days. Automation speeds up tasks like data entry and validation, so businesses can approve and pay invoices without unnecessary delays.
Improved Organization
Digitizing paper invoices helps businesses create a centralized, searchable archive of financial records. No more rifling through filing cabinets to track down misplaced documents—everything you need is just a few clicks away.
Cost Savings
Streamlining invoice processing means less reliance on manual labor, which reduces costs. Storing invoices digitally also cuts down on physical storage expenses, making it a cost-effective way to manage your financial records.
Enhanced Compliance
Many industries have strict requirements for document retention and financial audits. Invoice scanning ensures invoices are stored securely and remain accessible, helping businesses stay compliant with these regulations.
Scalable Solutions
As businesses grow, managing a higher volume of invoices can become overwhelming, especially for smaller finance teams. Invoice scanning scales effortlessly, allowing businesses to handle increased workloads without needing to hire additional staff.
Better Insights for Decision-Making
Having invoices digitized and organized means businesses can analyze spending patterns, track vendor performance, and gain valuable insights that would be difficult if not impossible when relying on paper. These insights can improve financial planning and decision-making.
What Is the Role of Invoice Scanning in AP Automation?
Invoice scanning plays a pivotal role in accounts payable (AP) automation, acting as the bridge between manual processes and fully automated workflows. By transforming invoices into structured, digital data, invoice scanning lays the groundwork for faster, more efficient payment processing.
Digitizing Invoices for Automation
AP automation relies on accurate data to function. Invoice scanning ensures that paper or digital invoices are converted into a format that automation tools can understand. This step eliminates the need for manual data entry, reducing errors and creating a smoother workflow.
Streamlining Approval Processes
With invoice scanning, data flows directly into AP software, where invoices can be routed automatically for approval. Instead of passing paper invoices from desk to desk, scanned invoices allow businesses to create streamlined, digital approval workflows.
Enabling Real-Time Tracking
Once invoices are scanned and digitized, they can be tracked in real-time. AP teams can quickly see where an invoice is in the approval or payment process, helping avoid bottlenecks and ensuring timely payments.
Integration with Automation Tools
Invoice scanning integrates seamlessly with AP automation platforms like Bill.com or other ERP systems. These platforms use the scanned data to automate tasks like matching invoices to purchase orders, flagging duplicates, and sending payment reminders.
By incorporating invoice scanning into AP automation, businesses can unlock greater efficiency, reduce processing costs, and ensure smoother financial operations. It’s the foundation of a modern AP workflow.
Who Can Benefit from Invoice Scanning?
Invoice scanning isn’t just for large corporations. Businesses of all sizes and industries can benefit from this technology. By simplifying the process of managing invoices, it provides practical solutions for a variety of financial challenges.
Small and Medium-Sized Businesses
For small and medium-sized businesses (SMBs), keeping track of invoices can quickly become overwhelming as the business grows. Invoice scanning helps SMBs stay organized, reduce errors, and save time without requiring a large finance team.
Large Enterprises
Large enterprises often deal with thousands of invoices every month. Invoice scanning makes it possible to manage high volumes efficiently while ensuring accuracy and compliance. For companies handling multiple vendors, it’s an essential part of maintaining smooth AP operations.
Industries with High Invoice Volumes
Certain industries, like retail, manufacturing, and healthcare, naturally generate more invoices than others. Invoice scanning is a game-changer for these industries, enabling faster processing and better organization for higher volumes.
Freelancers and Small Firms
Even for freelancers and small firms, managing invoices can be time-consuming. Scanning invoices ensures that records are easy to store, track, and retrieve—especially important during tax season or when working with multiple clients.
Teams Transitioning to Digital Workflows
Any business making the leap to digital systems will benefit from invoice scanning. It serves as a stepping stone to automation, allowing teams to build efficient workflows and reduce their reliance on paper documents.
Whether your business is large or small, invoice scanning can simplify invoice management and free up time for more strategic tasks.
Are There Any Limitations of Invoice Scanning?
While invoice scanning offers plenty of advantages, it’s important to understand its limitations. Like any technology, it’s not a one-size-fits-all solution and may require adjustments to suit your specific needs.
OCR Accuracy Can Vary
The effectiveness of invoice scanning depends heavily on OCR (Optical Character Recognition) technology. While modern OCR is highly accurate, issues can arise with poorly scanned, crumpled, or illegible invoices. This may require additional manual validation to ensure data accuracy.
Complexity of Custom Invoices
Invoices that don’t follow standard formats—such as those with unique layouts or excessive handwritten elements can be challenging for scanning software to process. In these cases, data extraction might need more customization or require manual intervention.
Initial Investment
For businesses managing invoice scanning in-house, there may be upfront costs for the necessary hardware, software, and training. While these investments often pay off in the long run, they can be a hurdle for businesses starting out.
Integration Challenges
To fully benefit from invoice scanning, the data must integrate seamlessly with existing AP or ERP systems. Setting up these integrations can be complex and time-consuming, especially if you’re working with older software.
Reliance on Digital Systems
While going digital simplifies many processes, it also comes with its own set of challenges. Businesses need to ensure proper data security, backup protocols, and keep up with software maintenance to protect their scanned invoice data.
While these limitations exist, they can often be addressed with the right tools and strategies making invoice scanning an invaluable asset for businesses.
What Software Is Available for Invoice Scanning?
Choosing the right software for invoice scanning can make a big difference in how smoothly the process runs. There are a variety of options available, each designed to fit different business sizes, budgets, and workflow requirements.
Popular OCR-Based Software
Many invoice scanning tools rely on OCR technology to extract key details from invoices. Software like ABBYY FlexiCapture and Kofax Capture are widely used for their ability to handle large volumes of documents with precision. These tools are ideal for businesses that need advanced data extraction and validation features.
All-in-One AP Automation Platforms
Some software solutions combine invoice scanning with broader accounts payable automation. Tools like Bill.com, SAP Concur, and QuickBooks Online allow you to scan invoices, extract data, and integrate it directly into payment workflows. These platforms are perfect for businesses looking to digitize and automate AP processes in one place.
Enterprise-Level Systems
For larger companies, enterprise resource planning (ERP) systems like Oracle NetSuite or Microsoft Dynamics 365 often include invoice scanning modules. These systems integrate seamlessly with other business functions, providing a comprehensive solution for managing financial documents.
Choosing the Right Software
When selecting invoice scanning software, consider the volume of invoices you process, the complexity of the data you need to extract, and how the software integrates with your existing tools. Finding the right fit can unlock the full potential of invoice scanning.
How to Deal with a Large Backlog of Invoices
Managing a large backlog of invoices can feel overwhelming, but invoice scanning offers a practical way to tackle it. Instead of spending countless hours manually sorting and digitizing old invoices, professional scanning services provide an efficient and reliable solution.
Professional Scanning Services
Businesses often turn to professional scanning services to handle large volumes of invoices. When you work with SecureScan, we take care of the entire process, from preparing documents for scanning to delivering high-quality digital files. Our advanced scanning technology ensures that every invoice, regardless of age or condition, is digitized accurately.
Preparing for Integration
Once invoices are scanned, they’re ready for integration with your existing systems, including accounts payable or automation platforms. This eliminates manual data entry and allows your business to transition smoothly into a more efficient, digital workflow.
Supporting AP Automation
Dealing with a backlog is also the perfect opportunity to implement AP automation. By combining invoice scanning with automation tools, your business can move from simply managing invoices to optimizing the entire accounts payable process. Automation speeds up tasks like approval workflows, matching invoices to purchase orders, and scheduling payments.
Long-Term Benefits
With invoices stored digitally, you’ll have quick, organized access to records for audits, compliance, and financial planning. Plus, you’ll free up valuable office space previously occupied by filing cabinets or storage boxes.
SecureScan’s accounts payable invoice scanning service is designed to make this process as simple as humanly possible. Whether you’re tackling a small backlog or years of archived invoices, we have the expertise and tools to get the job done quickly and accurately.
Wrapping up
Invoice scanning is a powerful tool that simplifies workflows, reduces errors, and lays the foundation for accounts payable automation. By digitizing your invoices, you can stay organized, save time, and make smarter financial decisions.
Whether you’re looking to process daily invoices more efficiently or tackle a large backlog, the benefits of invoice scanning are clear. With the right tools and services, it’s easy to make the transition and unlock the advantages of a fully digital workflow.
With 21 years of scanning experience and cutting-edge technology, SecureScan is here to help. We specialize in turning stacks of paper invoices into organized, searchable data. Contact us today to learn more about how our invoice scanning services can streamline your processes, or get a quote from one of our scanning technicians for a free cost estimate for your project.