Commercial Contracts and Invoicing Process Automation: The Complete Guide

Is your growing business struggling to manually manage the increasing number of invoices and associated customer/vendor contracts?

Well, business growth is definitely a blessing but significantly increases the time needed for handling paperwork. Because managing business contracts and invoices start getting complicated and time-consuming. All these lead businesses like yours to opt for invoice automation tools and contract lifecycle automation systems.

If your team is completely engrossed in managing high-touch and time-consuming activities, this blog is for you. It will help you understand how you can save time and do more with invoice and contract automation.

What Is Invoice and Contract Lifecycle Automation?

Is your accounts payable (AP) and accounts receivable (AR) team spending hundreds of hours every month trying to manually capture invoice data and matching or reconciling it against the information present in contracts?

If that’s the case, you know there are chances of errors and the processing time can get slower depending on the size of the team. On top of that, you may attract hefty penalties when you miss a payment date or increase the probability of bad debt when you don't receive payments from customers in a timely manner. This is where invoice automation comes in.

Automated invoice processing refers to the process of using automation for the purpose of extracting key data from orders or contracts and creating invoices, updating it in the accounts payable/receivable system, and processing it as well. The traditional way of doing all this can result in a bloated process that contributes to error, inefficiency, and takes several hours. Combining robotic process automation (RPA) and artificial intelligence (AI), invoice processing automation facilitates touchless processing and improved end-to-end AP/AR workflow capabilities.

On the other hand, a growing business will always have more complex contracts which soon become another labor-intensive undertaking. With contract automation, you can easily streamline the entire process of creating, managing, storing, and renewing the legal documents. In addition, you can automate the process of approvals, incorporate digital signatures, and identify opportunities for improvement in the terms and conditions of the contracts. The best part is that both the legal and commercial team members can self-serve routine contract documents at scale.

11 Processes That You Can Handle With Invoicing and Contract Automation

Did you know manual invoice processing comes with a 10% error margin? And, the hidden cost is even higher. Not only is your business at the risk of making late payments but also can leak profits and have inaccurate forecasts. Be it invoice data capture, invoice matching, or making payments, invoice automation can redefine the way you manage procure-to-pay or order-to-cash processes. Here are some of the most crucial processes that you can handle with an automated invoicing system.

Accounts Payable Invoice Automation

1) Invoice Monitoring: Automated invoice processing systems can easily flag incoming emails that contain invoices. They have the capability to scan and read structured XML documents, image files, and PDFs as well.

2) Invoice Capture and Recording: After identifying invoices, invoice automation softwares can extract the necessary details such as bank account, payment amount, item details, etc. In case the system finds discrepancies, invoices will be sent to employees for manual verification. The next step for an invoice process automation platform is to record the invoice information in a digital accounting system using machine learning solutions.

3) Invoice Evaluation: At this stage, the invoice automation system will check incoming invoices against order records for validity. Depending on the nature of your business, you can cross-check invoices against purchase orders, VAT rules, and for duplicacy as well. In addition, you can decide the payment time based on your working capital optimisation policies.

4) Payment: Once approved, the automated invoicing system will make payments necessary for settling the invoices. Integrating your invoicing module with a preferred bank will make the payment process completely seamless.

Accounts Receivable Invoice Automation

1) Customer Invoices: With accounts receivable automation, you can automate the process of creating and sending invoices to customers. These invoices contain details of services rendered and respective charges. With automation, businesses can enjoy prompt payments from customers.

2) Accounts Receivable Tracking: Accounts receivable invoice automation also paves the path for businesses to track accounts receivable and issue monthly statements to customers. With an automated system in place, you can expect the invoices to be accurate at all times, paid in a timely manner, and recorded in the financial system immediately.

3) Accounting: Accounts receivable invoice automation can also identify unpaid debts and therefore alert the concerned personnel at your organisation.

Contract Automation

1) Template Creation: A contract automation system can generate different templates suited for different commercial scenarios. Once the templates are checked for wordings by the legal department, they can be sent out without further delay. You can also use a pre-approved clause library in the contract template, shall the situation demand so.

2) Contract Self-serving: Using self-serving, different teams can use these templates to generate contracts as per their needs. For example, the talent acquisition team can easily generate a contract as they enter a few candidate details such as name, date, address, etc. Once this data is captured in smartfields using a Q&A flow, the system can automatically populate the contract using the metadata.

3) Approval Workflow: Lengthy contract approval process remains one of the biggest bottlenecks for businesses across the world. With contract automation, you can easily create an approval workflow meaning that you don’t have to send emails every time to get an approval for the contract.

4) Automated Signatory Flow: Depending on the size of your business, you will have different stakeholders responsible for approving a contract. With an automated eSignature flow in place, you can speed up the signing process as well.

Be it managing invoices or contracts, your team will always have more on their plate than they can achieve. And, their challenges increase as your business grows. This is why you should use invoice processing automation and contract management automation for taking care of invoices and contracts respectively. Now, let’s take a look at the benefits you can expect from each of them.

4 Benefits of Using Invoice Automation

1) Reduced Costs: Did you know automation will cost you 85% less for processing 5000 invoices a month? Well, that’s how much you can save with invoice automation tools. They can easily take care of different manual processes such as scanning invoices, recording data, matching invoices against purchase orders, assigning GL distribution codes, maintaining archives, and so on.

2) Increased Productivity: Invoice automation reduces the number of human touches for invoices and therefore increases productivity. You’ll be shocked to know that your employees can dedicate only 16% of their time to value-added tasks when there is no automation at all. When you use automation to free up the time of your employees, they can help you make strategic decisions with insights into finance.

3) Faster Cycle Times: Since processing accounts payable invoices is a time-consuming affair, you may end up suffering from bottlenecked invoices, missed early-pay discounts, and strained relationships with vendors. With an invoice automation software, you can enjoy the benefits of reduced invoice cycle times.

4) Reduced Errors: Since invoice automation tools validate invoice data against the ERP data, you will be able to quickly identify duplicate payments and therefore reduce payment errors.

3 Benefits of Using Contract Automation Software

1) Seamless Document Generation: With multiple stakeholders involved, contract document generation becomes a daunting task. With contract management automation, you can easily maintain centralised contracts that are up-to-date with approved language and templates. This helps different departments to stay free from errors and create compliant contracts.

2) Swift Contract Signing: With a contract management platform, you can enable stakeholders to sign a contract irrespective of their location. With sophisticated features, you can ensure that the contract wasn't tampered after the date on which it was signed.

3) Easy Renewals: Contract automation tools reduce the chances of error in manual management of a contract throughout the lifecycle. Moreover, contract automation also takes care of renewals with task reminders and notifications.

As you have seen, both invoice automation and contract automation platforms help you save labor costs, reduce errors, and increase productivity at the same time. Now let’s take a look at a few popular tools available for automating invoices and contracts.

Top 4 Invoice Automation Software in 2021

1) Bill.com

Designed to help you manage and streamline accounts payable and accounts receivable, Bill.com is ideal for small and mid-sized businesses. Leveraging artificial intelligence and machine learning, it enables you to reduce human error and have control over all aspects of invoice management. Some of the key benefits include automated data entry, real-time bill creation, duplicacy check, auto-sync with accounting system, and so on. Pricing for businesses starts at $39/month and $49/month for accountants.

2) Sage Intacct

Sage Intacct is another popular ERP software that is known for providing you visibility and real-time insights into the financial data. Featuring extensive automation capabilities, it has the ability to take care of different financial processes such as cash management, revenue recognition, contract management, accounts receivable, accounts payable, financial reporting, fund accounting, etc.

3) Stampli

Known for offering actionable and smart accounts payable automation, Stampli ensures easy collaboration among different vendors, approvers, and stakeholders involved in the purchase process. Besides offering month-on-month AP automation, it easily captures invoice data, thanks to the combination OCR, machine learning, and artificial intelligence.

4) GoTransverse

GoTransverse is an intelligent billing platform that allows businesses to fuel revenue growth. Besides allowing you to automate limitless monetisation models at high volumes, GoTransverse paves the path for businesses to get the most out of enterprise SaaS technology. With this platform, you can meet a number of functional requirements such as subscription billing, mediation, revenue recognition, collections, and much more.

Top 3 Contract Management Software in 2021

1) DealHub

Known for its end-to-end deal acceleration platform, DealHub comes with a contract management module that makes it easier for you to close deals faster with automated contracts. It comes with different features such as simplified content creation, easy collaboration, streamlined revisions, eSignature, and contract storage as well. You can also integrate your DealHub account with leading CRMs like Salesforce, FreshWorks, Microsoft Dynamics 365 for Sales.

2) Accelo

Designed for service businesses, Accelo helps you manage recurring contracts with automated triggers and makes it easier for you to track ongoing contracts as well. With its cloud-based servops, you can access files from anywhere. Moreover, it comes with features like usage tracking, communications tracking, automated notifications, client portal, unlimited templates, etc.

3) SAP Ariba

Ideal for businesses of all sizes, SAP Ariba is a collaborative software that brings together finance, sales management, and spend. Offering on-demand and subscription-based solutions, they are on a mission to eliminate paper and ink from contract management. Their robust solution enables you to adhere to operational and regulatory compliance while creating, executing, and managing contracts.

Setting up invoice and contract automation may get a little technical as you have to set it up, import all existing documents, and integrate with your existing enterprise or operational platforms. NeeVista consultants have the expertise to help you choose the right solution depending on your business needs, set it up, and maintain it as well. Get in touch with NeeVista today to save time and boost productivity with automated invoice and contract management.