Automated vendor invoicing processes overview

This article describes the capability for automating your vendor invoice processing and the benefits of using an automated process. This capability consists of features that are turned on in Feature management. These features apply only to vendor invoices, not to invoices that are processed using the Invoice journal or Invoice register journal page.

Organizations often work with third parties or Invoice capture to process paper invoices by using an optical character recognition (OCR) service provider. The service provider returns machine-readable invoice metadata. To help with automation, the Accounts payable automation features let you consume these artifacts from Accounts payable.

You can automate some Accounts payable vendor invoicing processes by using vendor invoice automation. The vendor invoice automation processing includes various tasks that are based on the Accounts payable automation settings. The automated process shows information about the progress of a vendor invoice as it moves through each of the processes. This capability can help Accounts payable clerks and managers process vendor invoices more efficiently. It also helps reduce the errors and inefficiencies that can occur when information is manually entered and processed.

The automation processes can be used to perform these tasks:

• Automatically apply prepayments to vendor invoices
• Match product receipts to pending vendor invoice lines.
• Automatically submit imported invoices to the workflow system.
• Simulate posting before a vendor invoice is posted.
• Quickly and efficiently view workflow and automation history.
• View and analyze the results of automating vendor invoice processing.
• Resume automated processing for multiple invoices.

Submit vendor invoices to vendor invoice automation

When either the Automatically submit invoice to workflow parameter or the Automatically match product receipts to invoice lines parameter is enabled, all imported invoices are automatically submitted to vendor invoice automation and wait for the automation background job to process them.

Manually created invoices can be submitted to vendor invoice automation by enabling the Include in automated processing option on the invoice header. This option is visible only when one of the automation features is enabled.

Invoices that are included in automated processing aren't editable. If you want to edit an invoice, you must first exclude it from automated processing by disabling the Include in automated processing option.

Match product receipts to invoice lines that have a three-way matching policy

Posted product receipts can be automatically matched to invoice lines that a three-way matching policy is defined for. The process runs until the matched product receipt quantity equals the invoice quantity. As part of this process, you can specify the maximum number of times that the system should try to match product receipts to an invoice line before it concludes that the process failed. The process runs in the background, either hourly or daily. To define your own interval, go to Process automation > Background processes > Match vendor invoice lines with product receipts, and select Edit.

The feature is controlled by the Matching product receipt to invoice lines parameter. When this parameter is enabled, the Automated receipt match status field appears on the Pending vendor invoice list page. For invoices that are imported from external sources, the initial value of this field is Not yet run.

When automatic invoice receipt matching is run, the status is updated based on different conditions:

• Not applicable – No three-way matching line is found. The matching policy is defined on the Setup tab under the connected purchase line.
• Complete – The invoice line's quantity was completely matched against the product receipt line's quantity.
• Failed – The matched product receipt line's quantity is less than the invoice line's quantity, and the maximum number of tries has been reached.
• Waiting – The matched product receipt line's quantity is less than the invoice line's quantity, and the maximum number of tries hasn't yet been reached.

Submit imported vendor invoices to the workflow system

As part of a touchless Accounts payable invoice process, invoices can be automatically submitted to the workflow system. This feature is controlled by the Automatically submit invoice to workflow parameter. Only invoices that have completed the Automatically match product receipts to invoice lines task and are still in automated processing can be automatically submitted to the workflow system. The process is run in the background by the Submit vendor invoices to workflow processing job. To define the interval, go to Process automation > Background processes, select the job, and then select Edit.

The Check Match product receipt status before workflow submission parameter first checks the Automated receipt match status value and determines whether the invoice should be submitted to the workflow system. When the parameter is enabled, the invoice is submitted to the workflow system when the Match product receipt status is Complete or Not applicable. When the parameter is disabled, the invoice can be submitted to the workflow system even if the Match product receipt status is Failed.

Invoices that are created by using the Vendor collaboration invoicing workspace must be manually submitted to the workflow system.

Automatically apply prepayments

When the Automatically apply prepayment for imported invoices parameter is enabled, any prepayment that exists is automatically applied when the invoice is imported into the vendor invoice. The Block follow-up automation process in case of prepayment application failure parameter determines whether the vendor invoice automation processing should continue if prepayment application fails.

Pre-validate vendor invoice posting

Posting simulation completes the validation steps that are done during the posting process for vendor invoices, but no accounts are updated. To run the process, you can select either a single invoice or multiple invoices on the Pending vendor invoices page.

Enhanced experience for viewing workflow and automation historical information for vendor invoices

An easy-to-read view of vendor invoice workflow history is provided. Vendor invoice workflow history can be accessed directly from the vendor invoice. Therefore, fewer clicks are required to find that information. If your organization has enabled the ability to automatically submit imported vendor invoices to workflow, the automation history is provided for the imported invoices. The automation history helps you identify the current process step, as well as the steps that have already been completed. When a step is unsuccessful, detailed information will be provided to help you understand the reason for the failure.

Analytics and metrics

The Vendor invoice center workspace lets you focus on vendor invoices that didn't make it through the automated process. Tiles on the workspace list information about vendor invoices that weren't successfully submitted to the workflow system, imported, or matched to product receipts. Microsoft Power BI metrics are also provided to give Accounts payable managers insight into the efficiencies of vendor invoice automation.

Resume automation processing for multiple invoices

When an imported invoice isn't successfully submitted to workflow using the automated process, the system will remove it from further automated processing. An accounts payable clerk can review and edit the invoice before the automated process resubmits it to workflow. When a failure reason can be resolved by the same fix for multiple invoices, you can restart the automated process on the Resume automated invoice processing page.

Tracking the Invoice received date value

The Invoice received date value indicates the date when the company received the invoice from the vendor. It provides a starting point for tracking the invoice's progress through the automation processes. This value can be included in the imported data for a vendor invoice. For invoices that were manually created, you can specify the date. If no value is entered, the current date is used by default.

Tracking the Imported invoice amount and Imported sales tax amount values

The Imported invoice amount and Imported sales tax amount values for vendor invoices can be provided in the vendor invoices import file. Typically, these values are from an invoice that was scanned by an outside provider and included in the import file. As the invoice is processed in Accounts payable, the values will be calculated based on the invoice data. The invoice can be posted only if the imported values match the calculated values. When the workflow is enabled, it applies the validation before workflow submission. Matching values ensure that the invoice accurately reflects the amount that is due to the vendor. If your organization allows imported invoices to be submitted to the workflow system automatically, you can optionally require that the imported totals match the calculated totals before the invoice can be submitted to the workflow system. The feature is controlled by the Require the calculated totals to equal the imported totals for workflow submission parameter.