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Digitize incoming invoices

What is a digital invoice receipt and what do you need to pay attention to when digitizing incoming invoices?

Definition of digital invoice receipt

In a narrower sense, digital invoice receipt means that companies receive invoices electronically. This can be as an attachment to an email or via the mailbox of a special online portal. In a broader sense, it means that invoices that arrive by post are immediately digitized and then processed digitally.
Digital invoice receipt briefly explained:

Requirements and advantages of digital invoice receipt

As part of the GoBD, audit-proof storage describes the storage of digital data in terms of correctness, completeness, security, availability, traceability, immutability and access protection. These are to be understood as central requirements for audit security and are recorded in chapter three under "General requirements" of the GoBD guidelines:
In order to speed up a company's business processes, a paperless office is essential, as it provides a better overview and enables more efficient work. Digital invoice processing is an important aspect of optimization and a cornerstone in the digitalization of a company. It improves workflows because it enables flexible processing and simple organization, storage and management of data. In order to work in a cost-saving and environmentally friendly way, the first step should be to digitize your incoming invoices.

1. manual invoice processing - time to digitize incoming invoices?

For many employees, receiving invoices in paper form is still part of their normal working day and is indispensable. However, working with paper invoices is not only uneconomical, but also not particularly environmentally friendly. Finding digital solutions for work processes and automating invoice receipt, among other things, is therefore both economically and ecologically more sustainable.

Here are all the facts about manual invoice processing:
  • High paper consumption
    Several copies of an invoice are often printed out and circulated within the company.
  • Time required
    In contrast to digital invoice processing, manual invoice processing is lengthy and inefficient; the processing time can take up to 14 days per invoice and could be better spent on other tasks.
  • Disorganization
    Employees often do not know the status of an invoice or which department it is in. This leads to delays and errors in processing.
  • Missed payment deadlines
    ‍In
    the worst-case scenario, theexcessively long processing time can lead to payment deadlines not being met, which can result in reminder fees.
  • Media discontinuities
    ‍Work processes
    are complicated by media discontinuities, as invoices received by email are often printed out and processed internally on paper.
  • High personnel costs
    ‍The
    error-prone system requires a great deal of effort to correct invoices, which takes up a lot of time and causes personnel costs.
  • Loss of cash discount
    By exceeding cash discount periods, companies risk losing their cash discounts. There is a risk of losing cost savings and discounts.

2. digital invoice receipt: the situation in Germany

More than 99% of the economic market in Germany consists of SMEs, and over 2 million companies are micro-enterprises. Fortunately, more and more companies are digitizing their office and administrative processes and moving away from paper-based workflows. A Bitkom study has shown that only one in four companies still make extensive use of paper in their day-to-day business. However, small and medium-sized enterprises are the least digitized - this is where SMEs have an important competitive advantage.

However, the willingness to invest in the digitization of their own work processes and thus also in digital invoice processing is increasing. More than 87% of all companies have already invested in the digitalization of their business and administrative processes in the past. In 2021, four out of ten companies invested in the digital office and more than 44% stated that they would invest in digital alternatives in the future. Only 6% of all companies surveyed stated that they had no interest in digitalizing their processes. However, in the context of the pandemic and due to technological progress, investing in digitalization has become increasingly important. It is particularly important for small and medium-sized companies to work efficiently and in a future-oriented manner, as digitalization can save costs and time. Productivity is increased with the help of automated processes. Anyone who has not yet addressed the topic of digitization can start by digitizing their own invoice receipt as a first step. This is because digital invoice receipt is an easy process to implement, yet it is central to companies and quickly pays for itself.

3. what are the advantages of digitizing incoming invoices?

A digital invoice receipt has a number of positive aspects that benefit not only the company itself, but also its employees. That's why it's worth digitizing incoming invoices - here are the advantages:
  • Time savings
    ‍By
    centralizing the email inbox, all key people have immediate access to the digital invoices. This speeds up work processes enormously and results in a shorter processing time than is the case with paper invoices. Invoices are often sent to the wrong addressee - a lot of time can pass before the document arrives at the correct place within the company. Central e-mail access speeds up this process without media disruptions.
  • Fewer errors
    Paper invoices often pass through many hands and several internal departments. It is easy for errors to creep in during invoice processing. This is minimized by digital invoice processing. Manual work processes generally involve a higher error rate on average and are less precise. Digital processing is far more accurate and reliable. With the help of OCR technology (Optical Character Recognition), the invoice data can be read with the utmost precision and there are no transmission errors.
  • More reliability
    ‍If
    the tax office carries out a tax audit, all documents can be viewed in full and digitally - this prevents the stress of tediously searching for documents and leaves a good impression on the auditor.
  • Better organization
    Digitizing incoming invoices means being able to carry out continuous bookkeeping. This eliminates the need for tedious filing and archiving at the end of the accounting period. This makes the classic month-end closing less time-consuming, as the preparatory work has already been done (manually or automatically).
  • Environmental friendliness
    Paper consumption is always associated with a burden on nature and the environment. Industrial forestry, water consumption, chemicals - all this leads to a poor ecological balance. Minimizing unnecessary mountains of paper and digitizing processes can not only be economically sustainable, but also an important step towards ecological sustainability.

4. accounting: digitizing incoming invoices with intelligent software

Digital solutions simplify and streamline work processes. Relieving your own employees and freeing them from manual tasks that software or artificial intelligence can easily take over is increasingly essential for companies to remain competitive and save costs. Digitizing incoming invoices is a good first step. If you want to digitize and automate your incoming invoices, you need suitable DMS software. This should ensure that ...
  • all invoices can be viewed digitally and are organized.
  • the responsible employees have access to the invoices regardless of their location and can approve them digitally.
  • the account assignment and payment of invoices can also be processed digitally.

Read out digital invoices with software

Intelligent software that uses OCR to read out all important invoice data is essential for digital invoice receipt. This applies not only to incoming paper invoices, but also to all invoices that arrive via email or EDI (electronic data interchange) in a different format.

Reading out data digitally saves a lot of time compared to time-consuming manual input, as an invoice contains a lot of important information. Good OCR software also minimizes the susceptibility to errors that can quickly have serious consequences when typing in numbers, for example. OCR can therefore replace the principle of dual control in the medium term. In addition to the name of the seller and the product description, the data read out also includes the date of purchase, the unit price of the goods, the total price and the quantity of products purchased. Furthermore, the information on the invoice provides information about the agreed payment terms, shipping costs, tax amounts and possible discounts.

Practical tip: After your invoice has been digitally read and all important data has been recognized, you can pay the imported invoice directly in the fileee app or web application with fileee Pay. This saves you even more time in your processes.

5 Digitizing incoming invoices - how does that work?

In order for a company to automate its invoice receipt, it must first digitize its invoice receipt. To do this, it is important to contact all suppliers and ask them to refrain from sending invoices by paper post in future and to use fully digital invoicing instead. This also applies to new suppliers - it is preferable to request a digital invoice from them right from the start.

‍Important: It is essential to set up a central e-mail address for all incoming invoices, to which every responsible employee has access. This is the only way to collect all electronic invoices in one place and avoid tedious and confusing shuffling back and forth in different folders! Intelligent document management systems allow automated e-mail import by connecting the mailbox or by forwarding the e-mail to an individual e-mail address. Not all companies will digitize their work processes, which is why invoices will continue to arrive by post in the future. This makes it impossible to receive invoices completely digitally. All invoices that arrive by letter or fax must therefore always be scanned first and then saved and imported as a digital document. The aim here is to minimize the number of these manual scans and optimize the process using mobile scanning options, for example.

6 How are digital invoices archived?

In the GoBD(Principles for the proper management and storage of books, records and documents in electronic form for data access), it is regulated by law that all invoices must be archived in their original format. This means that in the case of a paper invoice, there is no way around keeping the paper document.

When it comes to invoices sent by email, the following applies with regard to archiving: If the email contains important information that is attached in connection with the actual invoice, you are obliged to archive the email itself. If this is not the case, it is sufficient to archive only the invoice. However, to avoid any risk, we recommend using software with an automatic email archiving function via the cloud.

‍Important: Different retention periods apply to different types of documents. Invoices and accounting documents must be kept for 10 years. You are also obliged to archive all digital documents in an audit-proof manner. This means that stored documents may not be deleted or changed from the moment they are archived.

Practical tip: fileeeBusiness is a DMS that can be used to digitize all documents, read them using OCR and AI-based analysis and archive them in an audit-proof manner. The fileee DMS also offers a connection to various important services such as DATEV, with which you can easily handle your bookkeeping or work with your tax office.

7 Digital invoices and the legal situation - what do you need to be aware of?

If you want to automate invoice receipt, you should first familiarize yourself with the legal situation : Digital invoices are just as legally valid as paper invoices. It is always essential for digital document management that all invoices contain the required mandatory information , such as the date of issue, the full name and address of the company providing the service and the recipient, as well as a consecutive invoice number. Furthermore, they should be clearly legible and it must be guaranteed that they are stored in accordance with all aspects of data security and can always be retrieved.

A digital invoice must be stored digitally, because according to the rules of the GoBD, original documents must always be archived unaltered. A media break, i.e. printing and filing a digital document, is a violation of the guidelines.

For an invoice to be considered audit-proof according to the HGB (German Commercial Code), the AO (German Fiscal Code) and the GoBD, it must be stored digitally. audit-proof archived the following criteria must be met:
  • Immutability and traceability
  • Regularity
  • Completeness
  • Availability
  • Access protection
  • Security
You can find out exactly what this means and which requirements a document management system must fulfill in order to be considered audit-proof according to the GoBD in Bitkom's GoBD checklist, for example.

8 Digitizing invoice receipt and accounting - how does it work?

Digitized accounting is often one of the first steps towards a paperless office. The basis for this is to first digitize incoming invoices. Once you have all the digitized documents together, you need automated invoicing software. This is necessary for the management and processing of all financial documents and handles all accounting tasks automatically. Among other things, the software is able to create different types of documents such as quotations, delivery bills and incoming and outgoing invoices or to compare related documents with each other. The software can also be used to create automatic invoice approvals.

It is particularly important to always consult with your tax advisor(s) to check whether your measures comply with the requirements of the GoBD requirements. This will save you trouble with the tax office in the event of an audit.
Any questions?

Digitizing incoming invoices - frequently asked questions

What is a DMS?
Document management systems (DMS) are a software solution that enables the efficient, secure and location-independent management and processing of digital documents such as invoices, contracts, emails, etc.
What does OCR mean?
OCR stands for "Optical Character Recognition". This is a technology that is able to automatically read text in digital documents. With the help of OCR software, scanned documents can be converted into files that can be edited and searched. Our artificial intelligence is based on OCR analysis and uses the recognized text to automatically determine the document type or read out contact details, for example.
What impact will digitizing incoming invoices have on the month-end closing process?
The central storage and processing of invoices makes it possible to easily export all important documents at the end of the month in a bundle to accounting software . This makes month-end closing faster, more cost-effective and optimized, as digital processing is less prone to errors than manual invoice processing. fileee has interfaces to all common accounting software such as DATEV, lexoffice, Agenda and SevDesk.

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