Editor's Note: This is second in a four-part series about "Digital Transformation for Small Businesses." Part II focuses on invoices – parsing data and creating an effective workflow to file and store your invoices.
Bottom Line: Business invoices must be managed.
Invoices need to be sent and received, then filed and stored. These days, most invoices are sent and received via electronic formats, but you still may be using a manual process to review and input the data into your accounting system – a tedious and time consuming task.
This manual data entry and administrative side of managing a business is necessary, but doesn’t drive business growth. It costs time, and therefore money, and may even require a small salary if this is outsourced.
And let’s face it, this function usually is a business owner’s least favorite activity and, can unfortunately be neglected.
So, what if technology could make this process easier? What if technology could simplify managing expenses through proper invoice tracking and storage?
This is possible.
The solution is finding a harmonious synchronization between technology and workflows and the right platforms to make it happen.
Invoice Data Processing
As your business evolves and continues along the path of digital transformation, you must focus on streamlining workflows and implementing technology that can help with all processes.
For example, software and other programs that help with invoice parsing, automation, and data integration are tools that will take your business’s digital competency to the next level. Simply importing an invoice into a software program that can parse the data and categorize the financial information will significantly decrease time spent manually entering and coding data.
While not all solutions are created equal, you must evaluate which will be most effective and meet the specific needs of you and your business.
For example, some software solutions can template parse, but since invoices aren’t always formatted the same, it requires next-level technology with machine intelligence to accurately parse critical invoice data.
Some products, such as Neat Software, can extract and parse the data (like vendor, total, PO number, etc.) from any invoice with accuracy thus removing the manual data entry from the process so you can focus on revenue generating tasks or driving new business.
These software solutions result in more accurate data (by removing human error) and less time spent on non-billable tasks.
Once you’ve simplified the process of digitizing and storing your invoices, you’ll want to consider a solution that can help you through next steps, which may include issuing a check for payment, running a year-to-date report for a specific vendor or project, or simply getting the information to your accountant to manage.
Having financial documents in digital form greatly simplifies any next step in the invoice management process. Generally, to pay an invoice, you’ll want to do so through your accounting software – and utilizing a software tool with direct integrations makes this possible.
Still using Excel to track your invoices? No problem, products like Neat make it easy for you to export directly to Excel. Likewise, invoices in digital format can be quickly emailed or shared with your accountant for collaboration or review.
Although invoices are just one part of the bigger financial picture of your accounting function, they are necessary documents and the better and more efficiently they are managed, the easier it will be to ensure financial accuracy and allow you to focus on other aspects of your business.
Stephanie Mozzillo is product manager at The Neat Company.