Processing invoices manually slows down businesses. It leads to errors, missed payments, and wasted time. Small and medium-sized businesses (SMBs) need a better way. That’s where invoice processing software comes in.

With invoice automation, SMBs can cut costs, speed up approvals, and improve cash flow. The right invoice processing software integrates with accounting tools, reducing manual work. Functionality like real-time tracking, vendor management, and automatic matching keep finances organized.

This guide covers why invoice processing matters, common challenges, and the best invoice processing software solutions for SMBs. If you’re still relying on spreadsheets or email approvals, it’s time to upgrade.

What is Invoice Processing?

While automated invoice processing is popular, many SMBs still rely on manual invoice processes. These create bottlenecks and errors and can lead to unnecessary costs. In fact, the average cost to process a single invoice in the U.S. is $13.11. Automated invoice processing software can reduce these costs by 60-80%.

When manual systems slow you down, invoice automation transforms your workflow. Valuable features like real-time tracking and seamless integration keep approvals moving. This helps manage relationships and avoid late fees. It also enhances spend visibility and reduces human errors. In turn, this saves companies time and helps them stay compliant.

How Does Invoice Processing Software Work?

Invoice processing software automates the entire invoice lifecycle. It manages invoice receipt, approval, payments, and updates financial records. Automation eliminates manual data entry, speeds up approvals, and enhances financial oversight.

Here’s how invoice processing software typically incorporates accounts payable (AP) automation. First, invoices are captured and digitized. The software scans and extracts key details, reducing data entry errors. Next, invoices move through an approval workflow. Instead of chasing signatures, businesses can set rules to route invoices correctly. Approved invoices sync with accounting software like QuickBooks, Bill.com, or Xero for accurate records. Some solutions even handle payment processing. Dashboards then provide real-time reporting. This helps enhance spend visibility and improves budget and cash flow management.

ProcureDesk: The Best Invoice Processing Software for SMBs

SMBs need a complete invoice processing software solution. Their solution must cover automation, ease of use, affordability, customer service, and integration. ProcureDesk offers an intuitive way to streamline invoice management without complex enterprise-grade software.

Unlike large corporations, SMBs value speed, accuracy, and control over cash flow. Let’s look at why ProcureDesk is ideal for SMBs.

Seamless Integration with Accounting Systems

SMBs may struggle to ensure new software integrates with existing financial tools. These include accounts payable systems. ProcureDesk connects to existing applications like QuickBooks, Xero, Slack, Dynamic 365, and more. 

This integration eliminates the need for manual data entry. Everything syncs automatically instead of exporting invoices, uploading spreadsheets, or manually updating records. Our solution makes it easy to approve/reject multiple invoices in one place. Approved invoices in ProcureDesk get instantly updated in the accounting system. This ensures financial records are always accurate and up to date.

Automated Approval Workflows & Compliance 

Manual approval processes slow down invoice management. Invoices needing multiple approvals cause delays as finance teams chase managers for signatures. Our solution eliminates these bottlenecks with customizable approval workflows.

With ProcureDesk, businesses can set rules based on invoice amount, vendor, or department. For example, a company may create an intelligent rule workflow that automatically approves invoices under $5,000 within a department. But larger amounts would create notifications for senior management approval. These workflows ensure invoices move quickly while maintaining proper oversight and compliance. Every approval is recorded, and an audit trail is made to ensure compliance.

Extensive Punchout Catalogs for Vendor Management

Managing several vendors is challenging, especially with invoices in various formats. ProcureDesk simplifies this with punchout catalogs for direct purchasing from approved suppliers.

SMBs can shop from vendor catalogs that auto-generate invoices. These can then be matched to purchase orders. This prevents them from dealing with disconnected purchase orders and invoices. In turn, this reduces the risk of duplicate payments and invoice mismatches.

Punchout catalogs enhance spend visibility, simplifying expense tracking. Finance teams can track purchasing trends, negotiate better contracts, and align budget spending.

Streamlined Invoice Matching For Faster Invoice Processing

The manual invoice matching process is slow, error-prone, and a potential bottleneck. ProcureDesk simplifies this process with OCR for data capture. This automatically extracts and verifies data instead of doing it manually. OCR technology uses machine learning to scan and match invoices against purchase orders and receipts. This is also known as two-way invoice matching. If all details align, the invoice is approved for payment. If discrepancies arise, they are flagged for human review. 

We can go a step further with three-way invoice matching. Here, the purchase order, goods receipt, and supplier invoice match each other. Invoice matching helps reduce errors, prevent fraud, and ensure accurate financial records. Now, SMBs can make approvals, minimize duplicate payments, and close books quickly.

Best Invoice Processing Software For Other Types of Organizations

Procurify – Best for Enterprise Orgs

Procurify suits large enterprises needing robust reporting and spend management features. It has a user-friendly interface, strong report capabilities, and detailed spend management tools. However, it comes with a higher price tag and has limited integrations. As a result, it’s not the best fit for SMBs due to its cost and complexity.

Procurify Key Features

• AI-enhanced invoice processing with automatic OCR capture
• Automated three-way matching for reducing errors, fraud, and overspending
• Configurable approval workflows 
• Flexible payment options like ACH, check, and wire transfers
• Real-time tracking and reporting of accruals and payments
• Integration with existing ERP and accounting systems

Procurify Pricing

Procurify offers tailored quotes based on individual customer needs.

Precoro – Best for Teams Seeking Efficiency

Precoro’s accounts payable automation solution eliminates manual data entry and reduces human errors. It streamlines invoice approvals and verification and speeds up business processes. This frees your team to focus on strategic tasks. Get timely processing with real-time visibility and control. In turn, this helps maintain strong supplier relationships. 

However, it may lack advanced customization options for highly specialized workflows. It could benefit from more extensive integrations with niche software.

Precoro Key Features

• OCR capturing for automatic data extraction
• Automated two-way and three-way matching for fewer errors
• Real-time tracking and reporting of invoice statuses
• Multi-level approval workflows and budgeting tools
• Secure, centralized document storage and audit trails
• Integration with ERP and accounting systems

Precoro Pricing 

Precoro offers three pricing tiers: $499/month, $999/month, and custom pricing for large enterprises.

Coupa – Best for Enterprise Scale

Coupa is built for large enterprises that process thousands of invoices per month. It’s scalable with AI-powered spend analysis, fraud detection, analytics, and compliance features. But, Coupa also comes with a high price tag and a long implementation process. For SMBs, the cost and complexity often outweigh the benefits.

Coupa’s Key Features

• Automated invoicing with two-way and three-way matching
• Built-in approval workflows to save time
• Real-time cash flow visibility and spend control
• Modern infrastructure to meet global tax regulations and audit requirements
• Virtual cards for faster and secure payments
• Fraud detection and streamlined payments 

Coupa Pricing

Coupa does not list its pricing online. They provide custom pricing based on specific business needs and scale.

Zahara  – Best for UK Compliance

Zahara is for UK-based businesses requiring strict compliance and vendor management tools. It offers multi-currency support and strong audit trails, ideal for UK financial regulations. Yet, Zahara’s regional focus means it may not be the best choice for businesses outside the UK.

Zahara’s Key Features 

• Automated invoice capture and data extraction with OCR
• Seamless integration with accounting software
• Two-way and three-way matching
• Customizable approval workflows
• Centralized document management, real-time tracking, and fraud protection
• Multi-currency recognition

Zahara Pricing 

It starts from £118/month to £219/month and offers custom enterprise pricing.

What to Look For in Invoice Processing Software

Not all invoice processing software is equal. Here are four essential features to look for.

1. Automation & Accuracy

An automated invoice system and workflows reduce manual effort and data entry errors. SMBs can use Optical Character Recognition (OCR) to match invoice details with purchase orders and flag issues.

AP teams can create multi-level approval chains based on vendor, department, or invoice amount. The right invoice processing software allows custom rules, ensuring quick processing and compliance. This feature is illustrated by ProcureDesk below.

2. Integration with Accounting Systems

A suitable invoice processing software connects with tools like QuickBooks, Xero, or NetSuite. This means no duplicate data entry and no manual uploads. Invoices flow into the SMB’s preferred accounting system. Without duplicate entries or manual records, financial records remain accurate and updated. Our solution connects with several popular accounting systems, preventing duplication and saving time.

3. User-Friendly Interfaces and Real-Time Visibility

A well-designed dashboard makes tracking invoices easy. Businesses can see which invoices are pending, approved, or paid in real-time. Reports help teams stay on top of spending, manage budgets, and avoid cash flow surprises. As shown below, our dashboard neatly summarizes all the details you need to know. 

4. Vendor Management and Punchout Catalogs

Vendor management tools are a game-changer for businesses that deal with multiple suppliers. Some software offers punchout catalogs for direct vendor ordering. This reduces back-and-forth communication and simplifies invoicing. ProcureDesk provides comprehensive catalog solutions. This makes it straightforward to order from your preferred vendors.

How Manual Invoice Processing Hurts SMBs

As business demands increase and companies scale, manual invoicing becomes inefficient. When your existing systems can’t keep up, the need for automation becomes clear. SMBs may encounter payment delays and cash flow issues without a structured system. This leads to unnecessary costs. It is a major issue as 84.4% of vendors value speed of payment. Late payments mean penalties. Errors lead to duplicate payments or missed invoices. A lack of real-time insights and visibility makes it hard to track spending. 

On average, U.S. small businesses receive payments 8 days after the agreed deadline. Forbes also reports that 61% of late payments are due to incorrect invoices. These inefficiencies negatively affect resources and hurt operations, making automated solutions essential.

Common Challenges in Manual Invoice Management

SMBs that process invoices manually often face several pain points, including:

1. Time-Consuming Processes

Manual invoice processing is slow. Each invoice must be entered into the system and cross-checked against purchase orders. Then, it is sent for approval. With multiple invoices coming in daily, this becomes overwhelming. Delays pile up, causing missed payments and potential loss of early payment discounts.

Fortunately, ProcureDesk’s invoice processing system matches invoices with purchase orders, reducing human intervention. The system flags discrepancies before they turn into costly errors.

2. High Error Rates

Humans can make mistakes. Typos, missing details, and misfiled documents are common when entering invoices by hand. A single mistake can lead to overpayments, vendor disputes, or compliance issues. Fixing these errors takes time and costs money.

3. Compliance and Fraud Risks

Manual invoice handling increases the risk of fraud. Without automated checks, duplicate or fraudulent invoices can slip through. Unauthorized purchases might go unnoticed, leading to wasted money. Businesses need proper approval workflows to prevent this. E-invoicing isn’t mandatory in the USA. However, the Bureau of the Fiscal Service requires vendors to be able to submit e-invoices.

4. Lack of Visibility and Control

Knowing which invoices are pending, approved, or paid is hard without real-time tracking. Businesses end up guessing their cash flow, leading to poor financial planning. A lack of transparency can also create approval bottlenecks, delaying payments even more.

With ProcureDesk, you get complete visibility into your invoice pipeline. As shown below, our Spend Analytics provides a real-time view of monthly spending. Now, you always know the status of your invoices.

5. Difficulty Scaling with Growth

As a business grows, so does the number of invoices. A manual system that works for a small team can quickly become unmanageable. Finance teams end up buried under paper invoices, slowing down operations. Without automation, scaling becomes a challenge. 

Guy Anthony, CFO of Cerebral Therapeutics, stated, “I think the biggest impact ProcureDesk has had for us is being able to avoid hiring people to continue to support our manual processes. We would otherwise have had to hire one to two more administrative personnel to keep scaling what we were doing.”

Benefits of Using Invoice Processing Software  

There are several benefits of using automated invoice processing systems. AP automation solutions like ProcureDesk reduce errors, streamline operations, and improve cash flow. Let’s take a deeper dive into each benefit.

Saved Time

Invoice automation speeds up processing times and cuts down on manual work. Finance teams can now handle more invoices with the same resources. Automated workflows help manage resources more efficiently and focus on strategic initiatives.

Equality Charter School had problems due to time-consuming and disorganized purchasing processes. They used paper-based systems that slowed down operations. ProcureDesk helped automate purchase requests and also integrates with existing financial systems. Our solution also automated order placement for punch-out vendors like Amazon. This cut order placement time from 5 days to under 24 hours. Now, staff can focus more on educational priorities rather than administrative tasks.

Fewer Errors

A key advantage of invoice automation is reducing human errors in manual data entry. Fewer errors mean fewer disputes. Automated systems cross-check invoices, flag inconsistencies, and keep detailed audit trails. This ensures accurate financial records and prevents duplicate payments. In turn, this helps businesses stay compliant with financial regulations and avoid penalties.

Funai Lexington is a player in the biotech industry. Its inefficient and manual purchasing processes lead to delays and increased administrative workload. The company used spreadsheets and emails. Unfortunately, these were prone to errors and difficult to manage. ProcureDesk automated purchase orders and approvals, integrating seamlessly with their existing systems. This transformation improved operations, enhanced spending visibility, and helped reduce errors. Our solution’s automated cross-checking reduces duplicate entries and typos. This ensures that every invoice is accurate.

Cost Savings

Manual invoice processing time adds up and costs a lot. Automating invoices reduces the need for extra staff to handle manual tasks. This streamlining lowers operational costs tied to AP processes. Real-time spend tracking lets businesses make informed financial decisions and avoid unexpected expenses. 

Cerebral Therapeutics is a clinical-stage biopharmaceutical company. The company couldn’t scale as it relied on a manual and error-prone order processing workflow. Using Microsoft Word and Excel required extra staff and was unsustainable. ProcureDesk provided a scalable solution by automating these processes. It integrated with existing accounting software and offered detailed spend analysis. This automation saved significant time and costs, reducing the need for extra staff. Now, the company has improved financial forecasting and vendor management. 

Better Spend Visibility and Control

Real-time tracking gives businesses complete control over their spending. The spending dashboard lets teams track cash flow, analyze trends, and adjust budgets. This level of oversight helps prevent overspending and optimize financial planning. 

For example, EvolveImmune Therapeutics is a growing biotech company. It faced challenges with slow and inefficient order processing with its multiple systems. They switched to ProcureDesk, which combined all order management into one platform. This reduced manual work, improved tracking, and streamlined processes. ProcureDesk centralizes order management into one real-time dashboard. Teams can instantly track spending trends and manage cash flow with ease.

Overcoming Common Concerns About Invoice Processing

Automation improves invoice processing by reducing workload, minimizing errors, and speeding up approvals. However, businesses often encounter several challenges when integrating automation into their financial workflows. We will review the common concerns outlined below and provide solutions. 

Data Quality Issues

The accuracy of automated processing depends on the quality of invoice data received. Poorly structured or incomplete invoices can result in processing errors, leading to delays. For example, low-resolution scans and inconsistent formats from different vendors can be tricky. In addition, handwritten notes, faded prints, or missing fields can lead to misinterpretation.

Solution: Establishing data validation protocols is strongly recommended. ProcureDesk’s Intelligent algorithms instantly match invoices against POs and receipts. This automatically approves matches and flags exceptions for review. Additionally, encouraging vendors to submit invoices in standardized formats will help improve accuracy.

Resistance to Change

Transitioning from manual invoice handling to automated workflows can meet internal resistance. Employees who have worked with manual processes may hesitate to trust new systems. This may be due to concerns about job security, which causes reluctance. Teams may question where automated invoice systems can handle anything (see section above).

Solution: While this is concerning, training and change management can ease the transition. Showing how automation reduces repetitive tasks can highlight its benefits. For example, ProcureDesk’s onboarding team customizes our invoice processing software for your business needs. 

Compliance & Regulatory Concerns

Invoice processing must follow financial regulations, tax laws, and compliance standards. Any failure to meet these requirements can lead to audits, penalties, or legal risks. Regulations like CCPA, SOX, GDPR, and others mandate proper data handling.

Solution: Implementing systems with compliance tracking and approval logs ensures transparency and accountability. This will help to develop accurate audit trails. Regular reviews with legal and finance teams help maintain regulatory alignment. For example, ProcureDesk helps maintain audit trails for all transactions. This keeps you confident ahead of future audits.

Handling Exceptions & Complex Invoices

While automation can efficiently process structured invoices, handling exceptions remains a challenge. Invoices with multiple currencies or varied line items need manual intervention. Complex AP workflows for partial payments or credit memos may need to be developed. Vendor agreement updates can cause processing delays.

Solution: Clear exception handling and human oversight ensures better management of unusual cases.

Proactively addressing the above concerns can unlock the full potential of invoice automation. A well-planned implementation ensures greater accuracy, faster processing, and long-term cost savings.

How to Choose the Right Invoice Processing Software for Your Business

The right invoice processing software is key for maximizing an SMB’s financial operations. The ideal solution should cater to multiple areas, including prices, ease of use, and more. Let’s review.

Invoice Processing Software Considerations for SMBs

SMBs need simple, cost-effective, and easy-to-implement invoice processing solutions. Unlike large enterprises, they should focus on automation, integration, and scalability. It should integrate with tools, automate data entry and approvals, and offer real-time spend tracking. 

It should also be user-friendly, need minimal training, and offer flexible pricing. Finally, the chosen software should be scalable to grow with your business.

Key Questions to Evaluate Your Automated Invoice System 

Choose invoice processing software based on business size, workflow complexity, and integration needs. Before making a decision, ask yourself:

• Does the software integrate with QuickBooks, Xero, my accounting system, or my ERP systems?
• Can I customize approval workflows to match my business structure?
• Does it offer real-time spend visibility to improve cash flow management?
• Is the pricing model SMB-friendly, or is it built for enterprises?
• How easy is implementation, and is there training for my team?

Answering these helps businesses find a cost-effective solution to meet their needs. 

Success Stories Using Our Invoice Processing Software 

Automated Invoice Processing Drives 25–35% Time Savings at Coast Flight

Coast Flight trains pilots for major airlines at three U.S. locations. It faced challenges with decentralized purchasing and manual invoice processing. Our solution helped centralize their invoice process, automate approvals, and sync with QuickBooks. This provided real-time visibility and control over spending. Its CFO, Kevin Slatnick, highlighted that “ProcureDesk saves us 25% to 35% of the time that we used to spend on processing invoices, which is huge.” 

Invoice Automation Improves Budget Accuracy at School in the Square

School in the Square, a public charter school, struggled with budget oversight. They relied on third-party reports, leading to inaccuracies and overspending risks. Now, they have real-time budget tracking, streamlined order processes, and improved spend controls. This led to accurate budget reports, minimized overspending, and more informed financial decisions. 

“Now, I feel totally confident when providing a budget update that all the information is accurate and up-to-date. It’s helped us prevent over-spending and makes it much easier to make informed budgetary decisions in the moment.”

Monica Merchant: Director of Operations

Automated Invoice System Empowers Quantus with Real-Time Spend Control

Quantus is a leading field service provider in the biotech industry. It faced challenges with spend control and expense management due to rapid growth. With ProcureDesk, they gained real-time spending analysis, integrated vendor catalogs, and QuickBooks integration. Our onboarding team helped Quantus become comfortable with our solution in weeks. Now, the company has improved spending control and significant time savings.

“Not only do I recommend ProcureDesk as a product, but as a company, it has been fantastic to work with. From the implementation to the ongoing support we receive, we couldn’t have asked for more.”

Daniel J. Quinlan:  President – Quantus Inc

Who Should Consider ProcureDesk?

ProcureDesk helps SMBs with 50-250 employees process invoices without expanding its finance team. The software is especially beneficial for:

• Companies with many departments that need different approval workflows.
• Organizations using Sage Intacct, SSO, Quickbooks, or Xero and need seamless accounting integration.
• Businesses managing 100+ vendor invoices monthly that wish to simplify procurement and invoicing.

The Bottom Line on Invoice Processing Software

Efficient invoice processing can be enhanced by invoice processing software. This is essential for SMBs looking to scale without financial bottlenecks. Automation eliminates delays, reduces errors, and improves cash flow management. ProcureDesk stands out as the best choice for SMBs among the available solutions. We integrate with accounting systems, automates approvals, and manages vendors without enterprise-grade software.

Ready to streamline your invoice processing and gain better financial control? Register for a commitment-free interactive demo of ProcureDesk.