Invoice scanning: What is automated invoice digitization?

How your business handles invoices can either fuel growth or hinder it. Invoice scanning is the first step toward modernizing your accounts payable (AP) workflow, turning manual disorder into automated efficiency. By digitizing invoices, you lay the groundwork for faster workflows, better decisions, and more time to focus on growth.

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This guide unpacks what invoice scanning is, how it works, and why it’s a pivotal step in automating your accounts payable process.

What is invoice scanning?

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Invoice scanning reduces reliance on manual data entry and ensures invoice information is accurate, searchable, and ready for automation software.

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Whether you use a scanner or snap a quick photo with your phone, invoice scanning eliminates the clutter of paper systems. For today’s AP teams, it’s not just a nice-to-have; it’s the foundation of an efficient, well-organized workflow.

Why invoice scanning matters for AP automation

Invoice scanning improves how businesses manage accounts payable by turning static information into dynamic data. By integrating scanning into your AP processes, you set the stage for faster approvals, fewer errors, and seamless payments.

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Here’s how it fits into a streamlined workflow:

• Capture invoices digitally: Use scanners, mobile devices, or email to convert invoices into digital files
• Extract data automatically: Apply optical character recognition (OCR) technology to record essential details like vendor names and payment amounts
• Validate data: Cross-check information against preset rules and flag discrepancies for manual review
• Route for approval: Automate routing to the appropriate team members based on business rules, including reconciliation against purchase orders
• Complete payments: Approve and process payments digitally, saving time and reducing human error

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With invoice scanning as part of your larger AP automation strategy, you can create an error-free workflow that slashes costs and boosts productivity across the board.

Invoice scanning vs. data capture: What’s the difference?

While often used interchangeably, invoice scanning and data extraction serve different roles. Scanning simply creates a digital version of an invoice, replacing physical paperwork with a file you can store and share. Data capture, however, extracts key details like due dates, payment terms, and totals, allowing for advanced automation.

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For example, OCR-powered data capture uses machine learning to pinpoint and pull key fields, making it possible to automate steps like invoice approval routing and payment processing. Think of invoice scanning as the first step in digitization and invoice data capture as the fuel for automating the invoicing process.

Pros and cons of automated invoice scanning software

Automated invoice scanning comes with game-changing benefits, but it’s not without limitations. Here’s what you need to know:

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Ultimately, success depends on the quality of the OCR software you use and proper integration with your existing invoice automation systems.

How to automate invoice scanning in 3 steps

Automating invoice scanning is easier than you might think. It starts with the right tools and a clear strategy to integrate them into your workflow. Here’s how to make it happen:

1. Choose the right software

Choose an invoice scanning solution that balances cost-effectiveness with features like scalability, compatibility with multiple file types, and seamless integration with accounting tools. Bonus points if it supports API connections for flexibility.

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Make sure to prioritize automation solutions that can handle various formats, from PDF files to scanned images.

2. Extract data with OCR tools

Use OCR software to identify details like invoice totals, vendor names, and payment terms. Ensure the data is formatted to sync with your ERP or accounting system for a smoother workflow.

3. Integrate with accounting software

Integrate your invoice scanning software with platforms like QuickBooks or NetSuite using APIs or built-in tools. Set up automation rules to categorize expenses, flag anomalies, and route approvals. A well-integrated ERP system reduces manual touchpoints and ensures accurate financial records.

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By following these steps, businesses can transition to a fully automated invoice scanning process that saves time and optimizes accounts payable management.

Ramp’s invoice scanning in action: The Second City success story

Outdated AP processes were holding back The Second City, a renowned entertainment company. Without a way to digitize invoices effectively, they faced delays, errors, and inefficiencies. Enter Ramp Bill Pay.

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By adopting Ramp, The Second City transformed their AP workflows, starting with advanced OCR technology that extracts data, recognizes vendors, and applies accounting rules automatically. As Frank Byers, Controller at The Second City, shared:

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“When we moved to Bill Pay, I was hesitant because we were promised the same type of functionality as our previous technology, which didn’t work. But Ramp’s OCR works seamlessly—it not only recognizes the vendor but reads each individual line item and uses accounting rules to code them correctly. That made adopting Ramp Bill Pay a no-brainer.”

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The results were undeniable:

• 2x faster processing: Freed up valuable team resources
• $40,000 annual savings: Streamlined systems generated meaningful savings
• 8-day efficiency gain: Faster expense reporting eliminated delays

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Ramp didn’t just improve The Second City’s workflows—it redefined their invoice management.

Create an efficient AP workflow with Ramp

Invoice scanning is the first step toward a streamlined, automated AP process. But Ramp takes it even further. With OCR technology that reads line items, recognizes vendors, and applies accounting rules automatically, you can reduce errors, save time, and cut costs.

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As Frank Byers of The Second City experienced firsthand, Ramp Bill Pay saves time and money.

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Experience the transformation for yourself. Try Ramp Bill Pay and see how it can streamline your invoice approval workflow, saving time and resources at every step.