Large amounts of paper are a burden on many a company, slowing down business processes considerably. Invoices and receipts of all kinds are particularly troublesome for the accounting department, as in many cases the prescribed retention period is up to 10 years. Here you can find out how to digitize invoices so that all documents are secure and retrievable at all times. Professional document management is now indispensable for this, as processing and archiving also need to be designed efficiently.
The digitization of invoices reduces manual data entry and increases precision and overall process speed. This results in significant efficiency gains in data management.
In the long term, digitized invoices enable you to improve the scalability of your company by allowing you to process a larger number of invoices automatically and in a short time.
How to digitize invoices and business letters
Digitizing invoices, receipts or other business letters can be done in various ways and in several steps.
Digital scanning
- Through a mobile scanner
- Through an archive scanner
- Per app for a smartphone with camera
However, the work is not yet done, as the resulting digital formats are usually in optical form (e.g. PDF, IMG or JPG). This means that the documents are not yet fully processable, which is why the next step is also an important part of digitization.
Digital data acquisition
- With a document entry program
- With a tool for Optical character recognition (OCR)
- With a IDP Software
This involves extracting the relevant data and/or archiving the documents digitally in a suitable storage location. Different approaches are suitable depending on how you work in your company. For example, if you travel a lot, it is advisable to use the app to take photos.
As many features as possible are often combined. Ideally, IDP software includes all functionalities for digitizing, archiving and intelligently managing documents.
Artificial intelligence, for example, in conjunction with OCR technology ensures that relevant information on invoices and receipts is recognized immediately after digitization and that the content can be checked automatically or semi-automatically downstream and correctly assigned to the order or delivery bill.
Different types of invoices
Depending on the type of invoice, implementation and specifications also differ.
Paper invoice
When it comes to receipts in paper form, you need to pay attention to the following when accounting:
- Do you meet the specifications of the GoBD
- You can either keep paper invoices separately or throw them away
- The prerequisite for this is that the paper invoice is correctly digitized in the document management system (DMS)
Important: From 01.01.2025, the priority of invoices in paper form will no longer apply in the B2B sector and the E-billing is gradually becoming mandatory.
Electronic invoice, XInvoice or ZUGFeRD invoice
The following guidelines apply to ensure that an electronic invoice, also known as an e-invoice, meets all legal requirements:
- From 2025, the e-invoice will take priority. Other formats are considered "other invoices" and will be abolished in the B2B area following a transitional arrangement.
- The e-bill must be available in a digital structured data format.
- The format must correspond to one of the syntaxes according to CEN standard EN 16931.
- The choice of digital format is agreed between the invoice issuer and invoice recipient.
- A PDF file does not meet the criteria for an electronic invoice.
- The authenticity of the origin of the e-bill must be guaranteed, e.g. through an internal control procedure.
- The integrity of the e-bill must be guaranteed.
Incoming invoice
In the case of an incoming invoice that you have received from a supplier, for example, the following applies:
- GoBD compliant
- You must file the original on paper or, after digitization, as digital receipts Audit-proof archiving.
- If you have already received the invoice digitally, you must save it in the file format in which you received it.
Outgoing invoice
If you bill yourself, other points are important:
- You can send your invoices in paper or digital form. If the customer requests a paper invoice, you still have to comply with this until the e-invoice reform.
- However, it is easier to send digital invoices and store them in your DMS
- Depending on the software used, this helps you by allowing you to send invoices already digitally, e.g. through an interface to the post office
By using document management software, you can save a lot of time in all these processes, avoid errors and drive digitization in the company.
Advantages of digitizing invoices
Digitizing invoices and other documents has many advantages for your company:
- Low space requirement for archiving - Instead, you can simply store your invoices on the server.
- Audit-proof archiving of invoices - A DMS ensures that your digitized and archived invoices comply with the GoBD.
- High searchability - You can find information and the invoices you are looking for quickly and conveniently using a full-text search.
- Lower costs - Above all, you save on paper, postage and printer costs, but automation also reduces personnel costs.
- More time - By eliminating many manual tasks, your employees have more time to deal with more complex issues than invoice transmission and archiving.
- Location-independent access - Cloud-based applications allow you to access your documents from anywhere.
- Automation of workflows - Especially in combination with intelligent document processing (IDP), many steps in the invoice workflow can be digitized and automated.
Example of a digital workflow
Invoice processing can look like this, for example - but of course the details differ depending on the software:
- Invoice receipt by post or digitally - Paper receipts are digitized as PDF documents using the local or network scanner. If the invoice is already received in digital form, it is transferred directly into the software.
- AI-based invoice recognition and data extraction via OCR - The relevant information, such as header, footer and item data, is automatically read from the invoice.
- Processing and visual inspection - After recognition, the read data is checked and processed if necessary. You are supported by AI, which continuously learns from the entries and corrections.
- Checking, booking, release - You can define the digital approval workflow and the conditions of the document check yourself and thus ensure the correctness of all documents.
- Audit-proof archiving - The invoices are stored in the digital archive in an audit-proof manner. You can access them there at any time and from anywhere.
Use Cases - Have invoices digitized by AI-OCR with Konfuzio
Konfuzio is an IDP software with AI-based OCR that allows you to Invoices digitize easily and efficiently. Below you will find various concrete application examples for Konfuzio in practice.
How to automate invoices through OCR
If invoices, receipts or other documents are analyzed using OCR, all relevant data from scanned invoices or invoices in PDF format are converted into a format that is machine-readable, searchable and editable. Companies can integrate the resulting data into all other business processes via a programming interface.
Other possible applications of Konfuzio include:
Accounting - Digitize incoming invoices with AI
The OCR can recognize over 100 fields in the invoices and thus extract data for digital invoice processing. The information is recognized in a simple and structured way and automatically transferred by the software.
They support your accounting by reading out the following data, for example:
Header data of the invoice
- Invoice date
- Invoice number
- Payment terms
- Cash discount
- Gross total
- VAT rates
- Total net amount
Vendor
- Company
- Street
- House number
- ZIP CODE
- Location
Debtor
- Company
- Street
- House number
- ZIP CODE
- Location
Contact
- Name
- Phone number
Order reference
- Order number
- Delivery note number
Account details
- IBAN
- Swift / BIC
Line item
- Quantity
- Item number
- Unit price
- Total price
Application example for digital invoice verification
AI in claims management
The use of the technology is by no means limited to invoices in accounting. Specialized requirements such as those of primary insurers and reinsurers can also be met using intelligent character recognition. This applies to the following documents, among others:
- Workshop invoices
- Proof of purchase of e-bikes, bicycles & co.
- Cost notes
- Court cost statements
- Medical bills
- Billing of physiotherapists
The focus of the AI here is on the line items that require special human attention.
Area AI security and DSGVO
Industries that place a particularly high value on security and compliance with the GDPR benefit especially from Konfuzio, as the platform's architecture is multi-client capable.
This allows you to use Konfuzio for invoices in separate data rooms and in defined user groups. The deletion concepts are DSGVO-compliant and suitable for data of professional secrecy holders who are subject to the legal duty of confidentiality.
Security and DSGVO precautions of Konfuzio
Learning ability as the greatest advantage of AI
The AI's ability to learn is its great advantage. It learns through the contents of your documents and, after just a few invoices, recognizes exactly which fields are relevant. At the same time, it always remains adaptable.
Other advantages of the Konfuzio AI are:
- Export of the invoice information as digital formats such as CSV, JSON or via Python SDK.
- Compatibility through Integration with inventory software
- OCR API: Intelligent text recognition for over 70 languages including handwritten notes.
Conclusion - digitize invoices quickly and without errors
If you want to optimize your invoice management and minimize errors, the right OCR software is a good choice. This will ensure that everything related to payment management is protected against careless errors and you are always on the safe side with regard to legal requirements, such as the GDPR.
If you opt for a provider whose OCR is optimized by AI, you can train it for your specific use cases and thus digitize large parts of your accounting and optimize your business processes.
Are you planning to digitize receipts, invoices or other documents? Feel free to send us a message to receive individual advice from experts.
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