Streamlining your invoicing process begins with having good data. But what makes data “good"? When it comes to invoicing, it’s the type of data, as well as the format, that counts. And to be able to truly get the value from your data, you need to have structured data.
Structured data is a key building block of automation, organized in a way that is easily readable and searchable by computers. Data that resides within a fixed field in a spreadsheet or a relational database is a common example of structured data.
By contrast, unstructured data is raw, unorganized and lacks a basic form, which makes search and information retrieval difficult. It’s the most prevalent type of data in an organization, and it can come in the form of text files, PDFs, emails, social media, and audio and video files, among others.
Unstructured data requires a lot of work
Your processing system needs to receive invoices in a structured data format in order to automate invoicing. When the data comes in an unstructured format – such as Word documents, emails or PDFs – it has to be manually input into the processing system, which is very time-consuming and also opens the door to human error.
There is another option for converting unstructured data to the digital format needed for processing: using Optical Character Recognition (OCR) software. There are a few problems with this approach. For one, it’s challenging to teach the software to recognize the data. Secondly, in addition to adding time, cost, effort and another step in the process, it’s never as accurate as using structured data in the first place. Even after you get the OCR results, you still need to validate the files to ensure a high level of invoice quality.
” But the best is an e-invoice.”
Another option is to use Capture-as-a-Service (CaaS), which outsources the task of transferring unstructured data to a digital format. It’s an improvement over OCR software since outsourcing firms provide invoice templates and have already taught the software to recognize the data. The benefit is that your AP department doesn’t have to put in the time and effort to convert the data and you end up with high-quality data capture immediately.
E-invoices make automation easy
But the best is an e-invoice. When you receive an e-invoice, which is comprised of structured data, it is already set for invoice automation – you don’t have to manually input the data or use software or services to convert it for you. In addition to being more cost-effective, e-invoices are also much more accurate than manual invoices. And, the beauty is that once you have set up your e-invoice connection for the first time, all subsequent invoices will automatically be routed to the right location.
Thanks to the structured data in e-invoices, organizations can use invoice automation to keep track of all their invoices – to know where each and every one of them is at any time and pull them up at a moment’s notice. And the automated system can enforce compliance with regulations and company policies. And this gives you a streamlined process with greater flexibility and control over payment.