Processing Incoming Invoices: The Complete Automation Guide 2025

Processing incoming invoices is one of the most time-consuming processes in accounting. Every day, invoices arrive by mail, email, and from various portals. Each one must be captured, reviewed, approved, and booked.

In this guide, we'll show you how to automate incoming invoice processing and save 80% of your time.

Also read: Digitize Invoice Processing: The Complete Guide

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The Traditional Process: Why It's Outdated

The Manual Workflow

This is what invoice processing still looks like in many companies:

Invoice arrives (mail/email)
        ↓
Scan paper invoice / save PDF
        ↓
Open invoice and read data
        ↓
Manually enter data into system
        ↓
Review invoice (factual/numerical)
        ↓
Forward for approval
        ↓
Obtain approval (often via email)
        ↓
Book invoice
        ↓
File/archive invoice

Problem: Every step is manual, error-prone, and time-consuming.

The Hidden Costs

| Cost Factor | Per Invoice | With 500 Invoices/Month | |-------------|-------------|------------------------| | Capture | 5 min | 42 hours | | Review | 3 min | 25 hours | | Approval | 2 min | 17 hours | | Filing | 1 min | 8 hours | | Total | 11 min | 92 hours/month |

At an hourly rate of $50, that means: $4,600 monthly processing costs - just for processing invoices!

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The Solution: Automated Invoice Processing

The Optimized Workflow with AI

Invoice arrives (mail/email/portal)
        ↓
Automatic capture & separation
        ↓
AI extracts all relevant data
        ↓
Automatic validation
        ↓
Digital approval workflow
        ↓
Export to accounting system
        ↓
Automatic compliant archiving

Time savings: From 11 minutes to 2 minutes per invoice = 82% faster

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The 7 Steps of Automated Invoice Processing

Step 1: Centralized Invoice Intake

Collect all invoices in one place:

Email invoices:

• Set up dedicated email address (e.g., invoices@company.com)
• Automatic forwarding from all employees

Paper invoices:

• Daily scanning (scanner with automatic feeder)
• Or: Use scanning service

Portal invoices:

• Establish download routine (daily/weekly)
• Or: API connection to major suppliers

Step 2: Automatic Document Separation

Problem: Multi-document PDFs and mixed scans

Solution: AI-based document separation

DocuSplit AI automatically separates:

• Invoices from each other
• Invoices from delivery notes
• Multi-page from single-page documents

Example:

Input: Batch_scan_january.pdf (47 pages)

Output: INV-2025-001_Supplier_A.pdf (2 pages)
        INV-2025-002_Supplier_B.pdf (1 page)
        INV-2025-003_Supplier_C.pdf (3 pages)
        ... (more individual invoices)

Step 3: AI-Based Data Extraction

The AI automatically recognizes and extracts:

| Field | Example | |-------|---------| | Invoice Number | INV-2025-00147 | | Invoice Date | 01/15/2025 | | Due Date | 01/29/2025 | | Supplier | Sample Corp | | Tax ID | US12-3456789 | | Net Amount | $1,250.00 | | Sales Tax | $237.50 | | Gross Amount | $1,487.50 | | Bank Account | 12345678901234 | | Reference | INV-2025-00147 |

Accuracy: Modern AI achieves 95-99% recognition rate.

Step 4: Automatic Validation

The software automatically checks:

• [ ] Required fields complete?
• [ ] Tax ID valid?
• [ ] Calculations correct?
• [ ] Duplicate check (already exists?)
• [ ] Due date plausible?

In case of discrepancies: Automatic flagging for manual review.

Step 5: Digital Approval Workflow

Instead of email ping-pong:

Invoice captured
      ↓
Automatic assignment to cost center
      ↓
Notification to approver
      ↓
Approval with one click (or mobile)
      ↓
If amount > X: Second approval
      ↓
Automatic forwarding for payment

Benefits:

• Transparent status (who still needs to approve?)
• Automatic reminders for delays
• Audit trail for compliance

Step 6: Export to Accounting System

Data is automatically transferred to:

• QuickBooks
• Xero
• SAP
• Microsoft Dynamics
• Or: CSV/XML export

No more double entry!

Step 7: Compliant Archiving

Automatic archiving with:

• Immutability (WORM)
• Full-text search
• Retention 7+ years
• Audit trail

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Processing Incoming Invoices with DocuSplit AI

How It Works

1. Upload: Upload your invoices (individually or as multi-document PDF)

2. Automatic separation: AI recognizes each individual invoice

3. Data extraction: Invoice number, supplier, amounts are recognized

4. Intelligent naming: InvoiceNumber_Supplier.pdf

5. Download: ZIP with all individual invoices + CSV overview

What DocuSplit Does

| Feature | Benefit | |---------|---------| | Automatic separation | No manual splitting | | AI extraction | No manual data entry | | Intelligent naming | Instant findability | | CSV export | Directly into Excel/accounting | | Multi-page recognition | Related pages stay together |

What DocuSplit Doesn't Do (Yet)

• Approval workflows
• Direct accounting integration
• Duplicate detection

For these features: Use DocuSplit as a pre-processing tool, then import into DMS/accounting system.

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Workflow Template: From 0 to Automated

Week 1: Preparation

• [ ] Set up central inbox (email)
• [ ] Procure scanner (with automatic feeder)
• [ ] Define folder structure
• [ ] Test DocuSplit AI

Week 2: Pilot Phase

• [ ] Collect all invoices for one week
• [ ] Process with DocuSplit
• [ ] Review results and adjust
• [ ] Document workflow

Week 3-4: Rollout

• [ ] Inform all employees
• [ ] Make new process mandatory
• [ ] Process backlog (optional)
• [ ] Measure first successes

From Month 2: Optimization

• [ ] Gather process feedback
• [ ] Identify bottlenecks
• [ ] Review accounting integration
• [ ] Plan next automation level

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Common Challenges and Solutions

"We receive invoices in different formats"

Problem: PDF, email attachment, paper, portal download

Solution: Central collection folder

1. Save all PDFs to one folder
2. Scan paper invoices daily (to same folder)
3. DocuSplit processes everything the same way

"Some invoices are multi-page"

Problem: Page 1 and 2 belong together

Solution: DocuSplit automatically recognizes:

• "Page 1 of 2" / "Page 2 of 2"
• Same invoice number
• Continuation indicators

"Scan quality varies"

Problem: Poor scans = poor recognition

Solution:

• At least 300 DPI when scanning
• Black and white instead of grayscale (for text)
• Enable automatic image enhancement

"We also have international invoices"

Problem: Different formats, languages, currencies

Solution: DocuSplit supports:

• German, English, French, Spanish, Italian, Dutch
• Various currencies
• International invoice formats

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ROI Calculation: Is Automation Worth It?

Example: 500 Incoming Invoices/Month

Before (manual):

• Time per invoice: 11 minutes
• Total time: 92 hours/month
• Cost ($50/hour): $4,600/month

After (automated):

• Time per invoice: 2 minutes
• Total time: 17 hours/month
• Software costs: ~$100/month

Savings:

• Time: 75 hours/month
• Money: $3,650/month
• Annually: $43,800

ROI: Paid off in less than 1 month

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Checklist: Automate Incoming Invoices

Prerequisites

• [ ] Central email inbox for invoices
• [ ] Scanner with automatic document feeder
• [ ] Defined folder structure
• [ ] Responsible person for process

Software Selection

• [ ] AI-based document recognition
• [ ] Automatic separation of multi-document PDFs
• [ ] Export option (CSV, XML, API)
• [ ] Compliant archiving possible

Process Design

• [ ] Intake channels defined
• [ ] Approval workflow established
• [ ] Interface to accounting clarified
• [ ] Archiving requirements considered

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FAQ: Common Questions About Incoming Invoices

How long does the transition take?

With consistent implementation: 2-4 weeks to running operation. The pilot phase quickly shows where improvements are needed.

Does this work for small businesses?

Especially for small businesses, automation pays off! With less staff, time savings are particularly valuable. DocuSplit offers entry plans from $9.99/month.

What happens with recognition errors?

• AI achieves 95-99% accuracy
• Uncertain recognitions are flagged
• Manual review for flagged invoices
• Continuous improvement of recognition

Is this compliant with regulations?

Yes, if:

• Process documentation exists
• Immutable storage ensured
• Complete audit trail
• Required retention period maintained

Can I process existing invoices retroactively?

Yes! Scan backlogs and process them with DocuSplit. This way you have a unified, searchable archive.

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Conclusion: Automate Now - It Pays Off

Processing incoming invoices is a perfect candidate for automation:

• High manual effort (11+ min per invoice)
• Recurring, similar tasks
• High error rate with manual capture
• Measurable time and cost savings

With DocuSplit AI, you can implement the first step of automation immediately: Separation and intelligent naming.

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Try Now: 3 Invoices Free

See for yourself:

1. No account needed for the first test
2. 3 PDFs free to process
3. See immediately how automation works

Try Free Now

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Have questions about automated invoice processing? Contact us at support@docusplit.ai

Related articles:

• Digitize Invoice Processing: The Complete Guide
• Archive Invoices Compliantly
• Paperless Office: The Complete Guide