Processing invoices may not sound like an exciting task, but it is an extremely crucial step for every business. For example, the service providers and vendors always want to get paid timely to continue providing materials and services for smooth operation. In addition, invoice processing helps bring standardization and optimization to routine tasks. What is processing invoices in SAP or its importance? Keep scrolling through to know the details.
What is processing invoices in SAP?
Processing invoices in SAP is a function efficiently conducted by the SAP software to manage supplier invoices. The invoices are available in various formats like paper, digital PDFs, emails, or via other electronic means. However, managing the cash flow is a tiresome task for the business. Thus, the invoice processing originates from invoice receipts and comes close when the payment is made and recorded in the books.
All the invoices must get included in the SAP system so that you can easily enter, check, and approve them from there. Optimizing and digitalizing the process will offer you a seamless invoice processing option.
Manual invoice processing is an old-age practice poised with many challenges. Some of the problems are listed below:
- Manually checking and approving the invoices requires lots and lots of effort and time. This leads to a bottleneck situation.
- In the case of a paper-based process, the issue of transparency arises.
- Paper-based, manual processes are often a source of error that can lead to huge costs.
Invoice processing in SAP
Invoice processing in SAP involves the following steps that you must follow:
- Enter incoming invoices in SAP
Invoices are delivered to businesses in one of three formats: invoices on paper, as a PDF attachment in an email, or as an electronic file. While other formats can be handled directly, paper invoices must be scanned before processing. Decentralized, location-independent invoice capturing is a feature that distinguishes effective SAP inbound invoice processing solutions.
- Extract and validate invoice content
This is possible with free-form recognition. The software extracts all important invoice information, including the vendor, total amount, date, and specific invoice items.
The validity of the captured data is then automatically verified. The SAP system’s master data and transaction data are used for validation.
- Archive the original documents
The original invoice is currently kept in a digital repository. Since the document cannot be changed after it has been preserved, this archive is audit-proof. The paper invoice is no longer required to be kept and can be destroyed. Long-term space and cost savings are obtained from doing this, as well as assurance that you adhere to the organization’s compliance standards. In addition, the procedure becomes verifiable and audit-ready in this way.
- Pre-post the invoice
After this, the invoice is automatically available in SAP electronic invoice receipt book. Doing this helps to provide a transparent overview of the status of individual invoices.
- Verify and approve SAP incoming invoices
Each invoice will begin a flexible adjustable check and approval cycle in SAP. This workflow is based on value constraints and accountability and includes automatic checks in conformity with the relevant Value Added Tax Act, among other things. If required, you can also conduct this verification upon getting the invoice’s content.
Departments can modify the procedure to meet their needs. It can consist of virtually any number of phases. Background processing is also an option for invoices that include an order reference; a three-way match might start it, for instance. This indicates that without human involvement, the system automatically checks and approves requests. Both employees and approvers benefit from this time and effort savings.
- Post or reject incoming invoices in SAP
To simplify the process of posting invoices, the system automatically proposes account assignment and allocation to the cost centers. If you wish to dismiss an incoming invoice in SAP, you can generate a suitable rejection letter with the help of document generators filled with templates and text modules. With processing invoices in SAP, you can achieve accelerated processing and consistently high-quality results.
Importance of processing invoices in SAP
Here is the list of reasons that makes processing invoices in SAP crucial:
- Throughout all processing invoices in SAP stages, your invoices are maintained in an audit-proof way, and you can retrieve them whenever you want with just a single click.
- Your accounting department receives daily help from the SAP-based invoice receipt book.
- If necessary, approvers can use a web-based approval mask accessible on smartphones and tablets.
- In order to prevent default charges, the system automatically informs you of discount periods and due dates.
- Numerous KPIs are always accessible and help with long-term process improvement.
- The system makes it possible to close quickly and efficiently at month- and year-end.
- The SAP incoming invoice solution is administered in accordance with SAP rhythm: rights management acquires roles and rights directly from the SAP authorization system, which offers a significant benefit when it comes to compliance.
Conclusion
If you plan to digitalize your business processes via SAP, incoming invoice processing can map the procedure electronically with little effort and generate higher ROI. EnKash is the best platform that helps their customers to manage their cash flows in a better way with optimum collections. Now, you can automate the invoicing for recurring transactions.
It is time to optimize your invoice for maximum efficiency with EnKash. Connect with them today to reduce manual efforts and enjoy processing invoices in SAP efficiently.
