A breakdown of what you can expect from an automated invoicing system and details of some of the major systems available.
What is automated invoicing?
Automated invoicing is the process of scheduling invoices, in advance, to be issued automatically at a specified date and time. Online invoicing packages enable business owners to set this up. Alternatively, one-off invoices can easily be manually issued without the need for a bookkeeper, even from mobile devices.
Invoicing systems build invoicing into a firm’s workflow, with invoices being delivered immediately. This leads to faster payment, with the most up-to-date payment services allowing customers to click straight through via the invoice to settle their bill straightaway. This pay-now facility is proving increasingly popular as it boosts cash flow for the vendor and reduces accounts processing time for the busy customer. The best systems offer a range of payment options, including credit cards, bank transfers or Direct Debit to make it easy for customers to pay. Make sure you choose an invoicing software that integrates with established online payment providers.
When payment processes move online it makes tracking invoices much easier. Most systems use a dashboard that shows payments already received, those pending and those that are overdue. It’s also possible to set reminders for customers who have yet to pay and run reports to get a snapshot of those who are on time and those who are persistently tardy. With such thorough and detailed record-keeping it’s simple to get information should your accountant or the authorities demand it.
Automated invoicing system providers
It’s quick and easy to buy and set up off-the-shelf invoicing software packages or subscribe to cloud-based providers' online invoicing systems. Here are some of the most commonly-used invoice management systems:
QuickBooks - A well-established accounting software package that allows users to create and send invoices, as well as manage all the accounting needs businesses face. It also tracks overdue invoices to make chasing payments easier.
Xero - Very popular with small firms who are attracted by its cloud-based invoice management system with automatic reminders and online payment facilities. Xero also integrates with hundreds of existing finance-related apps, as well as offering its own app to allow users to do their accounting on the move.
ClearBooks - Offers online invoicing, purchases and expenses tracking. One feature of its cloud-based software allows businesses to run accounts in more than 170 different currencies.
FreeAgent - Provides all the important business accounting services, including invoice issuing and tracking. It also allows subscribers to have unlimited numbers of users, clients and projects at any one time.
KashFlow - Has a handy app enabling users to invoice on the move. It also links direct to HMRC to give customers their data in one place, making compliance easier. Invoices are customisable, plus data encryption is available for those concerned about security.
Salesforce - Cloud-based service that allows for subscription billing using GoCardless, as well as the option to set up mandates using online invoices or emails with pay-now links.
GoCardless has an extensive list of available partner integrations.
Machine learning and invoice automation
Technology will continue to shape how payments are demanded and collected in the years ahead. Paper invoices will become increasingly rare as more businesses move to digital processes. Bills will be generated immediately, with payments accelerated as vital functions are integrated into the invoice itself. Billing techniques will become more refined, customisable and intuitive for both business owner and customer.
But an even greater shift is beginning to take place. Machine learning allows invoicing systems to analyse and digitise invoices, extracting relevant information to speed up and automate payment processing. Plus, blockchains, the building blocks which power cryptocurrencies, are increasingly being put to use in invoice reconciliation, allowing for fast, transparent, secure processing of payments.
Machine learning software
Machine learning software is already available that scans keywords and numbers on incoming invoices, recognising company names, invoice numbers and money owed. Relevant information is automatically generated, removing the need for manual data entry; invoices are matched to purchase orders, and the individual giving final approval is informed and can confirm payment in a single click. One provider of this type of software, French firm AODocs, estimates that companies can save 15 minutes of employee time per invoice using this digitised approach, which would translate to a staggering 375 hours a month saved for a firm processing 1,500 invoices monthly.
Because these smart analysis systems extract structured data from sets of documents, the need for human intervention is almost entirely removed. Not only does this improve the speed, efficiency and accuracy of invoice management, the fact that captured information is automatically filed into databases makes business analytics much easier. It can also aid further software development in the future.
However, systems with machine learning capabilities often struggle with invoices that don’t have a set format. Accuracy can be high when scrutinising text and numeric data, but less reliable when trying to make sense of graphics, tables or visual features, such as logos. This is improving all the time as technology develops. But, a world where full automation of invoice processing is commonplace is a little way off yet.