Guide: Vendor invoice management

If you’ve ordered goods and services for your company, it’s safe to say that you or your accounts payable team have handled and paid a vendor or supplier invoice. That means you probably know that vendor invoice management isn’t always the easiest task. It is, however, an important one.

Regardless of the size of your company, vendor invoice management is an essential function of accounts payable. This makes it crucial to keep your vendor invoice management process running smoothly every day – and luckily, automation is here to help you achieve that.

In this article, we’ll cover what vendor invoice management is, as well as how automation can help you streamline your vendor invoice management process.

What is a vendor invoice?

A vendor invoice, also referred to as a supplier invoice, is a document issued by a vendor or supplier to a buyer requesting payment for goods or services provided.

Vendor or supplier invoices typically include the following information:

• Invoice number
• Invoice date
• Vendor/supplier details
• Buyer details
• Description of goods or services
• Payment terms

A vendor invoice can be representative of a one-time deal or of an ongoing business relationship. For example, vendors or suppliers may issue recurring invoices when the buyer is obligated to make multiple payments – e.g. for monthly software subscription payments.

What is vendor invoice management?

Vendor invoice management, also known as supplier invoice management, is an accounts payable function that involves receiving, approving and auditing vendor invoices.

Traditionally, vendor invoice management is a manual task. This means it relies on manual tracking to manage vendor/supplier information, renewal dates and other essential data.

Manual vendor invoice management comes with a variety of challenges. It’s a process prone to errors and delays, which doesn’t just affect internal operations – it can also have a negative impact on the professional relationship between the company and its vendors and suppliers. Luckily, manual vendor invoice management is a thing of the past.

Automation: How to streamline your vendor invoice management

Vendor invoice management is an essential aspect of accounts payable. It’s important that this function runs smoothly – and that’s why companies across the world are turning to software solutions to automate their vendor invoice management.

Let’s take a look at 5 improvements automation enables you to make to your vendor invoice management process.

1. Accounts payable workflow

Vendor invoice management is part of the accounts payable workflow – the complete process that a company follows to manage its obligations to pay for goods and services from vendors and suppliers.

From end to end, automation can help you optimise this process, ensuring that your accounts payable workflow isn’t bogged down by errors and delays. With a smooth workflow as your foundation, you’ll have the support you need to maintain a streamlined vendor invoice management process.

2. Data capture

Data capture is one of the central steps of vendor invoice management – and automation plays an integral role in optimising this process.

Using OCR and intelligent document processing technologies, automation solutions automatically extract invoice data from e-mails, PDF attachments and other invoice formats.

With automated data capture, gone are the days where vendor invoice management relied on error-prone, time-consuming manual data entry. This feature alone allows you to save significant amounts of time and resources.

3. Invoice matching

Within vendor invoice management, invoice matching is an important process. It ensures that the invoices you receive are consistent and accurate, minimises the risk of errors and overpayments and reduces the amount of time you spend on correcting these issues.

Automation allows you to take your invoice matching to the next level. It automatically matches the invoice with purchase orders, delivery receipts and other supporting documents, streamlining your operations and accelerating your processing cycles.

This enables you to approve and pay vendor invoices faster and with greater accuracy. And once the invoice has been matched and approved, it’s sent on to payment processing – simple as that.

4. Duplicate detection and fraud prevention

Part of vendor invoice management is cross-referencing vendor invoices to detect duplicates and discrepancies – and automation makes this process easy and efficient.

Automation automatically detects and flags duplicate invoices, preventing overpayment and ensuring that each invoice is processed only once. The system also enables you to verify the authenticity of invoices with greater accuracy, helping to detect and prevent fraudulent activities.

5. Approval workflows

To streamline your vendor invoice management, it’s important to have a structured vendor invoice approval workflow. Automation can help you achieve just that.

With an automated vendor invoice approval workflow, vendor/supplier invoices are automatically routed to the appropriate approvers based on predefined rules.

This reduces bottlenecks and speeds up your approval process, leading to more efficient processing and helping to ensure that your vendor and supplier invoices are paid on time, always.