How to implement automated invoice processing for high-volume operations

The accounting expertise disaster is altering how companies deal with their funds. With the US market needing 340,000 new accountants and 45% of corporations struggling to draw expertise, extra firms are turning to specialised expense administration suppliers to deal with their accounting operations.

However this is the catch: These service suppliers face the identical expertise scarcity. 

We lately labored with one such supplier who processed over 50,000 payments and invoices month-to-month for his or her shoppers. As extra firms got here to them for assist, they bumped into the identical impediment: they could not rent sufficient individuals to maintain up with the workload. It obtained to some extent the place they needed to flip down new shoppers.

Let me take you thru how the service supplier carried out automated bill processing and located a solution to bulk-process payments and invoices with out consistently including extra workers.

What occurs when rising quantity breaks doc processing

The expense administration supplier in query focuses on serving to organizations optimize their working expenditure. As a Enterprise Course of Outsourcing (BPO) accomplice, they deal with all the pieces from utility and telecom bills to IT prices—processing payments, validating fees, and offering detailed analytics. They assist AP groups in healthcare, manufacturing, retail, and authorities organizations scale back the workload whereas delivering value financial savings by way of higher expense administration.

Nonetheless, as this supplier’s enterprise grew quickly, dealing with near 50,000 utility payments and invoices month-to-month grew to become greater than only a processing problem. It uncovered basic operational constraints that threatened their potential to scale and ship worth to shoppers.

Here is what occurred:

1. Handbook processing grew to become a bottleneck: Their crew relied on handbook information entry and will solely course of about 100 invoices per individual per day. It created a rising backlog and restricted their capability.

2. Expertise scarcity worsened issues: Discovering and retaining certified in-house accounting analysts to supervise the method and guarantee accuracy grew to become more and more troublesome and costly. This made it more durable to scale their crew and meet rising calls for. 

3. Shopper service suffered because of this: Processing inaccuracies and inefficiencies meant delays, errors, and, finally, sad shoppers. In addition they struggled to satisfy shopper deadlines, resulting in potential penalties.

4. Revenue margins had been squeezed: Elevated labor prices and SLA penalties reduce into their profitability, making it more durable to put money into progress and innovation.

5. Development alternatives had been restricted: They could not effectively onboard new shoppers or tackle new enterprise alternatives. It put them on the again foot in opposition to rivals with higher methods.

They wanted to keep up a big crew of knowledge entry clerks always to key within the sheer quantity of payments and invoices. Whereas they had been in a position to outsource a few of it, the inherent limitations of handbook processing remained.

The tipping level was when the service supplier began turning down new enterprise as a result of their operations couldn’t scale to serve them.

Why utility bill processing will get sophisticated at scale

Check out a typical utility invoice. It’d seem to be a easy doc to course of. However, it will probably shortly develop into a headache if you’re processing hundreds of them each month, particularly when aiming for the accuracy and element wanted for efficient expense administration.

Every bill accommodates vital information factors that must be extracted and validated: account numbers, service addresses, meter readings, utilization information, cost descriptions, and fee phrases.

Here is a fast glimpse into how sophisticated the utility invoice processing workflow was:

1. Each utility firm is completely different

• Lots of of utility firms, every with distinctive bill codecs—some even utilizing 7-8 completely different layouts
• Some utility firms ship every day payments, others month-to-month
• Single invoices can run from 1 to 372+ pages
• Every format wants particular dealing with

2. Info is not simple

• A number of meter readings for various companies (electrical energy, gasoline, water) might be scattered throughout the doc
• Service addresses for multi-location shoppers is likely to be unfold throughout pages, or buried inside tables
• Cost descriptions lacked consistency (“Buyer Cost” in a single invoice and “Cust. Chg.” in one other)
• Similar fees would possibly seem a number of occasions on a single bill, requiring handbook revisions

3. Accuracy necessities are strict

• Meter readings should match their corresponding fees
• Knowledge wants validation earlier than system import
• Errors may result in incorrect shopper studies, flawed monetary insights, and missed optimization alternatives
• Processing delays result in SLA penalties

These complexities meant handbook processing or primary OCR options, which regularly battle with inconsistent layouts and sophisticated information relationships, wouldn’t be sufficient. They wanted an answer that might not solely deal with excessive quantity but in addition adapt to the intricate particulars and variations of their shoppers’ utility payments.

How the service supplier carried out automated bill processing for prime volumes

The expense administration supplier knew they wanted to automate bill processing earlier than progress grew to become unattainable. Nonetheless, with 50,000+ month-to-month invoices, advanced validation necessities, and strict shopper SLAs, they could not afford any drops in accuracy or service high quality throughout the transition.

That is when their CFO found Nanonets. Our one-shot studying, customizable validation flows, hands-on help for advanced vendor setups, and talent to deal with multi-page tables satisfied them that we may meet their particular wants:

• Distinctive doc layouts
• Complicated information extraction wants like a number of meter readings and repair addresses
• Excessive-volume processing with constant accuracy
• Validation necessities for his or her system import

Working with the supplier, we took a scientific strategy to automation. Fairly than disrupting their complete workflow directly, we began with a vendor-by-vendor strategy to validate accuracy and construct confidence.

In the present day, their automated workflow processes a good portion of their 50,000 month-to-month payments and invoices. Right here’s the way it works:

1. Doc consumption

• Their crew collects invoices all through the day by way of a number of channels (mail, shopper emails, utility firm portals, and bodily invoices)
• On the finish of every workday, they place all collected invoices into a delegated SharePoint folder
• The SharePoint folder construction can go as much as 3 ranges deep (e.g., essential folder → vendor folder → date folder)
• Nanonets checks the SharePoint folders each 3-5 minutes for brand new information
• When new information are detected, Nanonets mechanically imports them

Observe: Backup strategies embody direct add by way of the Nanonets interface, e-mail forwarding to a devoted mannequin e-mail deal with, and different  cloud storage choices (Google Drive, Dropbox)

2. Preliminary processing

• As soon as imported, Nanonets’ AI mannequin begins extraction instantly
• System identifies and processes:
  • A number of meter readings as desk buildings
  • Complicated cost descriptions
  • Service addresses throughout pages
  • Cost phrases and dates
• Constructed-in validation checks the payments for:
  • Subject completeness
  • Date format accuracy
  • Quantity validity
  • Required data presence

Observe: Their crew adopted an end-of-day batch add strategy, permitting our system to course of all the pieces in a single day. This ensures all paperwork uploaded throughout the day are processed and prepared for overview the following morning. 

3. Error dealing with and high quality management

Error dealing with entails automated checks, adopted by handbook evaluations for corrections.

A few of the automated checks completed by Nanonets:

• Flags lacking fields
• Identifies mismatched meter readings
• Catches incorrect cost descriptions
• Tracks accuracy charges by vendor

The processing crew then evaluations error logs and output every day for:

• Cost descriptions within the fallacious columns
• Service addresses throughout a number of areas
• Meter readings matching their fees appropriately

When points are discovered, the crew investigates the foundation trigger, corrects extraction errors instantly within the Nanonets interface, and updates the AI Mannequin’s coaching information if wanted to enhance future accuracy. This steady suggestions loop helps keep excessive accuracy charges throughout all distributors.

Observe: Every day error reporting was carried out to forestall points from bleeding by way of your complete week.

4. Submit-processing and output

As soon as paperwork go validation:

• System applies customized formatting guidelines to extracted information
• Standardizes cost descriptions throughout distributors
• Knowledge is exported in customized CSV/Excel format
• Information are organized by vendor and date
• Knowledge is imported into the service supplier’s billing system

Observe: The crew processes 15,000-20,000 pages month-to-month this fashion, which may scale to 30,000+ pages.

5. Steady enchancment

We work with the service supplier to keep up and enhance processing high quality. Their crew identifies areas for enchancment and offers suggestions, whereas we repeatedly improve the AI mannequin’s accuracy. This entails:

• Common mannequin updates based mostly on their processing crew’s suggestions
• Centered enhancements in advanced areas like cost descriptions
• Gradual onboarding of recent distributors to make sure steady efficiency
• Utilizing our analytics dashboard to observe and optimize efficiency

This collaborative strategy helps keep excessive accuracy charges whereas steadily increasing processing capabilities.

The affect of automation on bulk bill processing

Inside three months of implementing Nanonets, the supplier noticed important outcomes. They scaled their automated processing from zero to 12,000 pages month-to-month, demonstrating the system’s potential to deal with their high-volume wants. 

For utility invoices from identified distributors, the AI mannequin achieved processing speeds of 173-174 invoices in simply 5 minutes — a activity that may’ve required hours of handbook information entry.

However the affect went past simply velocity.

Processing effectivity

• Nanonets can now course of 46 out of fifty distributors shared by the shopper
• Just one consultant file required per vendor for AI mannequin coaching
• Automated doc consumption by way of SharePoint integration
• Bulk in a single day processing of 500 invoices every day

Operational enhancements

• Employees free of handbook information entry to deal with higher-value duties like shopper reporting and evaluation
• Quicker turnaround on shopper deliverables and assembly SLAs
• Extra constant processing high quality, with fewer errors and handbook corrections
• Higher dealing with of advanced invoices with a number of meter readings and repair addresses

The trail ahead

The supplier’s journey into automated bill processing remains to be in its early levels. With solely ~20% of their complete invoice quantity presently automated, there’s important room for progress. However extra importantly, it has laid the inspiration for a major transformation of their operations.

Their subsequent steps deal with:

Increasing automation protection

• Processing telecom invoices (estimated 10,000 month-to-month)
• Scaling to deal with ~30,000 payments and invoices month-to-month
• Persevering with to onboard new invoice codecs from completely different utility firms effectively
• Constructing on their profitable utility bill automation

Technical integration

• Implementing API integration by summer time 2025 to allow direct information move between Nanonets and their expense administration resolution
• Automating error corrections the place doable to cut back handbook overview time
• Constructing a extra strong integration between Nanonets and their in-house software program

Managing utility payments and invoices for a number of shoppers?

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See how automation may help you develop with out including headcount. Guide a demo to see how we may help automate your expense administration service.

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