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Here’s part two of our series on how to get your invoice exception rate down. Last week, we discussed how automation helps an organisation address their invoice exceptions for the following reasons:

  1. Technology is significantly more accurate and reliable than employees, reducing the error rate in invoice processing.  


  1. Automation provides a great opportunity to challenge and re-engineer existing processes, identifying where exceptions arise and how to prevent them from happening.


  1. Automation provides visibility and performance metrics across the accounts payable function, making it easier to identify bottlenecks and take action to address them.


  1. Sophisticated software solutions offer many automated exception management capabilities, reducing the number of invoices accounts payable staff need to get involved with.


Deploying an automation solution will immediately bring the invoice exception rate down as manual processes are replete with error – a leading cause of exceptions. However, even with an automation solution in place, there are opportunities to continuously improve and reduce exceptions.

Here are some simple ways that accounts payable staff can take control of procure to pay:

Tell the supplier to submit their invoices electronically

If you have an accounts payable automation solution, most prefer to receive invoices by PDF attachment to a dedicated accounts payable email address. The solution’s optical character recognition (OCR) software can then capture, validate, and process the data with little human intervention.

Going forward, many firms may choose to receive their invoices via the Peppol standard and communications network. This digital payment method allows invoice data to be received electronically, arriving in the finance system in a structured, computer-readable format, ready for automated processing. This technology is more efficient than OCR, which requires some verification work from accounts payable.

Tell the supplier what to include on their invoices

Buying organisations should provide their suppliers guidance on what information needs to be included on their invoices. Clearly, all mandatory fields should be incorporated, and these details need to be complete and correct. Buyers can lower the exception rate by enforcing high standards and refusing to pay invoices that contain errors.

Likewise, if firms have a rule in place that incoming invoices need to contain their corresponding purchase order number, then invoices without this field should not be put through. It is more time and cost efficient to process complying invoices only, rather than have accounts payable try to track down the relevant purchase order.

Tell the supplier not to send invoices with negative amounts

The OCR technology will classify the incoming document as a purchase order invoice, non-purchase order invoice, or a credit note and then initiate the appropriate workflows. Therefore, suppliers should send clearly marked credit notes rather than invoices with negative amounts. Invoices containing negative line items raise exceptions for accounts payable to manage, slowing the processing of the payment.

Tell the supplier that all details need to be legible

Whether the supplier is sending a PDF or paper invoice, the document’s presentation needs to be clear and clean. Even with an automation solution, tiny font (smaller than 6) is not legible and cannot be processed. Likewise, reverse print, such as white text on a dark background, is unsupported by most automation software.

Any handwritten invoices cannot be processed by OCR technology. Likewise, any pen marks or edits cannot be read by the software so require verification from accounts payable, delaying processing and adding to costs.

Discourage the sending of paper documents

Businesses should discourage the sending of paper invoices as this practice creates additional work on the buyer’s side; staff need to scan these pages using a multi-function device, emailing them to the accounts payable mailbox for automated processing.

Follow software vendor’s guidelines

If some suppliers continue to send paper invoices, accounts payable needs to verify the scanned image meets quality control thresholds. To meet these standards, they should do the following to ensure the performance of the OCR:

  • Scan the document using a multi-function device
  • Enable automatic rotation on scanner
  • Ensure high-quality scans (300dpi)
  • Keep scanner panel clean
  • Repair glass scratches on scanner
  • Follow scanner maintenance plan
  • Remove staples and paper clips
  • Smooth out paper creases

Further, they should not:

  • Mark the paper in any way
  • Scan documents that are poor quality (faded font, line streaks, smudges etc)
  • Re-scan a printed scan

If accounts payable do not follow these guidelines, the OCR will not be able to perform to standard, creating exceptions for accounts payable to manage and obstructing straight-through processing.

In conclusion

Automating accounts payable allows buying organisations to take control of their accounts payable. This means they can provide their suppliers and staff clear guidance on how to send, receive and process invoices.

Putting rules in place helps to lower invoice exceptions, facilitating a higher rate of straight-through processing. This delivers better outcomes for buyers and sellers alike, with faster payments and lower processing costs the result.

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