Automating invoice processing with AI: what works and what does not

What happens to an incoming invoice today

At most companies it goes like this. The invoice arrives in a mailbox — often accounts@, sometimes the owner’s personal inbox. Some arrive on paper or through a supplier portal. Then someone opens the PDF and retypes the details into the accounting package: supplier, invoice number, date, amount, VAT, ledger account, sometimes a project or cost centre code.

The pain is rarely the retyping. It is everything around it: invoices arriving twice because the supplier also emailed the engineer, invoices waiting two weeks for approval, and the hunt when the accountant asks which document belongs to that payment.

• Arrival: email, paper, portal, or all three mixed together.
• Retyping: header details and sometimes the line items.
• Coding: ledger account, VAT code, cost centre, project.
• Approval: someone with budget responsibility has to say yes.
• Posting and filing: ready for payment, stored so it can be found again.

What AI changes here — and what it does not

AI is good at reading a document that does not follow a fixed pattern. Older recognition works with templates: you teach the system where supplier X puts the invoice number, and the moment that supplier changes their layout, it breaks. Language models read an invoice more like a person does: they look for what an invoice number is, not for whatever sits in a fixed position.

That mainly helps with the long tail. Your twenty largest suppliers are so tidy that any system copes with them. It is the hundred small ones — the builders’ merchant, the fuel card, the sole trader who writes invoices in Word — where template recognition keeps stumbling.

What AI does not change: it does not know what your chart of accounts means, whether this is a project cost or stock, or whether the goods were delivered. It learns that from your history or from rules you set. And it does not know whether an invoice is correct — only what it says. AI pulls out the data and proposes. The decision stays a decision.

How automating invoice processing works in practice

A working setup usually looks like this. The steps are the same whether you use an off-the-shelf solution or something custom; the difference is how much of each step you get to decide yourself.

1. 01One entry point. All invoices land in one mailbox, portal invoices and scans included. This sounds dull and it is the most important step: as long as there are three entry points, manual work stays.
2. 02Extraction. Supplier, invoice number, date, amounts, VAT and, where needed, the line items come out of the PDF. A scan without a text layer goes through OCR first.
3. 03Matching. The supplier is linked to your creditor records. Ledger account, VAT code and cost centre are proposed from earlier postings for that same supplier.
4. 04Checking. Does net plus VAT add up to the total? Has this invoice number come past before? Does the amount differ from what this supplier normally sends? Anything unusual goes onto an exceptions list.
5. 05Approval. The invoice goes to the right person, with a reason attached and an amount threshold. Approving works from a phone; anyone who stays quiet gets a reminder.
6. 06Posting. The approved invoice enters the accounting package through whatever integration that package offers, with the PDF attached.
7. 07Feedback. Whatever a human corrects is remembered. Without this step the system stays as dumb as on day one.

Your package may already do more than you think — check there first

This is the honest part. Accounting packages have built or bought invoice recognition, and there are separate scan-and-recognise services that plug straight into them. Exact, AFAS and Moneybird come past most often with us, and there are others.

What those packages can do exactly, we will not say. It differs per version, per module and per subscription, and it changes. Ask your own supplier or your accountant, with a concrete question: can I send invoices to a mailbox that you read, what does that cost per invoice or per month, and is approval included?

If the answer is yes and it fits how you work, you are done. Then you do not need an agency, and that is a perfectly good outcome: a solution that is live tomorrow beats custom work that is live in six weeks. The limit sits where the standard route does not follow your way of working — the point where it stops being about recognition and starts being about what has to happen afterwards.

When custom work does pay off

Four situations where the standard route structurally falls short. If two or more sound familiar, a custom integration is probably worth the money.

• Unusual supplier formats. A wholesaler or installation company gets invoices with dozens of line items, article numbers that do not match their own, and surcharges named differently by every supplier. Reading header details works everywhere; matching line items to your articles is another matter.
• Integration with projects or stock. A construction firm wants costs on the right job, a manufacturer wants goods receipts reconciled against the purchase order. The invoice then has to reach your project administration or stock system too, not just the accounting package.
• Multiple administrations. A holding with operating companies, an accounting firm with client ledgers, a haulage business with several depots. Invoices have to be routed to the right administration first, and off the shelf that often means setting everything up again per administration.
• Approval flows with real rules. Amounts above a threshold to the director, project costs to the project manager, cover during holidays, reminders that go out. Many packages offer a simple version; the moment your rules lean on more than one field, it stops.

The checks a human keeps, and why

We do not build this as a system that posts everything by itself, but as one that does the groundwork and shows you its doubts. Every invoice gets a status. If everything adds up and it comes from a known supplier with a known pattern, it sits ready with a proposal you confirm in one click. If something is off — an amount that does not add up, a new supplier, a deviation — it sits separately with the reason attached.

Having a human look is not a temporary measure for the first few months. An invoice is a payment instruction. Whoever approves it spends money, and that should be a person who signs for it. Your accountant also wants to see who approved what and when.

What you gain: the work shifts from entering to checking. That goes faster, and the administrator who used to do it usually does not become redundant but gets room to breathe.

What goes wrong

Every setup we have seen running suffers from the same things. Ask any supplier about them; anyone who says it does not happen has not watched it run long enough.

• Wrong amounts. A credit note arriving as a normal invoice, or a total including VAT read as excluding. The safety net is a sum: net plus VAT equals gross, and anything that differs sharply from that supplier’s history goes to review.
• Duplicate postings. The supplier emails accounts and the engineer, or sends a reminder with the same invoice attached. Deduplicating on supplier, invoice number and amount catches most of it — but not a supplier who restarts their numbering.
• VAT codes. Reverse charge for subcontractors, foreign suppliers, partly exempt items. This is where automation most often proposes something wrong, and where a mistake hurts you at the VAT return. We put extra checks here and run the rules past your accountant.
• Suppliers who change their layout. Without warning, usually around a year end or a software migration on their side. With AI recognition it is milder than with templates, but you still notice it. Expect to go through a supplier again once a year.
• Invoices that do not arrive as invoices. A link to a portal, an invoice in the body of the email, or a photo from someone’s phone. Those are solved with an agreement with your supplier, not with technology.

What it costs

There are three kinds of cost, and the second and third are the ones most often forgotten.

Building costs €110 per hour with us for straightforward work and €165 per hour for complex development, paid monthly in advance from an AI budget or build fund that you set, so there is no open end. How many hours it takes depends on the number of suppliers, the number of administrations and whether you need integration with projects or stock. A fixed price quoted before the core session contains a margin for the unknown, and you pay for it.

Usage is the second: per processed invoice you pay something to the AI model and the services underneath, and that scales with your volume. We work it through up front on your own numbers, so you can weigh it against what an off-the-shelf solution charges per invoice. The third is your own time: cleaning up creditor records, merging duplicate suppliers, agreeing how you code things, then a few hours a month for exceptions. That is in no demo, and it is real.

Before anything gets built there is the core session: a half-day (4 hours) on your shop floor, €596 excluding VAT and travel (€0.45 per kilometre). A full day is €1,192, our advisory rate €149 per hour. We carry professional and public liability insurance, and a subsidy partner checks as standard whether a scheme applies.

How to start

Do two things yourself first; you do not need us for either. Count how many incoming invoices you get per month and from how many different suppliers. Then ask your software supplier or your accountant what your current package already does with incoming invoices, what that costs, and whether approval is included.

If the standard route fits, switch it on and you are done. If you get stuck on supplier formats, projects or stock, multiple administrations or your approval rules, there is something to build. Start with the free AI scan: five minutes online, no sales pitch, with a first price indication. If the picture holds up, we spend a half-day watching, and you get a core report with a go or no-go — including “your package can do this itself, go do that”.

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Check what your package already does — then call us

Ask your software supplier what your current package does with incoming invoices. If you get stuck there, take the free AI scan: five minutes online, with a first price indication. After that we can spend a half-day watching how invoices really arrive at your business.