Touchless Invoice Processing: Key Benefits & How It Works for Accounts Payable

Updated on: Apr 28th, 2025

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10 min read

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To say manual invoice processing is tedious and time-consuming is an understatement. The costs of efficiently and flawlessly managing human-intensive Accounts Payable (AP) can be exponentially proportional to the volume of invoices and the number of suppliers for growing businesses. So, startups and MSMEs increasingly rely on AP automation tools for touchless invoice processing. These cloud-based AI-enabled tools are tremendously scalable and affordable, even for businesses operating on shoestring budgets. 

This article discusses everything you must learn about touchless invoice processing in AP automation, its benefits, and how it works. 

What is touchless invoice processing?

In simplest terms, touchless invoicing is an application of business process automation technologies. It streamlines and automates complex, repetitive tasks in invoice receiving, verification, and approval to achieve the highest efficiency, accuracy, and speed in accounts payable workflow. The result is cost savings and improved productivity. 

Invoice processing automation technologies have been in practice to different degrees for quite some time. However, earlier, they required a significant amount of investment, so much automation was beyond the scope of the majority of companies, except large multinationals. 

Recent innovations in cloud services and machine learning tools have made automated invoice processing touchless, requiring zero to negligible human intervention. Besides, costs have decreased tremendously, making such tools accessible and much more affordable to small startups and MSMEs. 

Importance of automation in accounts payable

Accounts Payable management is a workflow that begins with issuing purchase orders to vendors and ends with processing and reconciling payments to vendors. Automating this workflow is essential for any business, big or small, for several reasons:

  • Time efficiency: Receiving, verifying, and getting approvals on verified invoices are tedious and time-consuming. The complexity and time required increase rapidly with the growing number of vendors and the volume of invoices. Automating repetitive tasks within the AP workflow helps save time without compromising the quality and effectiveness of the verification and approval process. 
  • Cost efficiency: Automating repetitive tasks and streamlining complex workflows helps improve the productivity of accountants and supervisors engaged in AP. This helps minimise administrative costs for growing businesses. Cloud-based AP automation tools are highly scalable, so companies do not require major initial investments. 
  • Data accuracy: Automation reduces human intervention in data capture, storage, and retrieval processes. This improves the accuracy of financial data and minimises the chances of discrepancies and future disputes related to vendor payments. 
  • Better data availability: Workflow automation enables capturing data from every interaction in the workflow, which is impossible in manual AP processes. It helps with data analysis, performance tracking, and better control over the workflow. 
  • Stronger vendor relations: Finally, faster and more accurate invoice processing improves vendor confidence in clients' commitment to seamless accounts payable. 

Key benefits of touchless invoice processing

Touchless invoice processing, as the name suggests, does not require major human intervention except for exceptions handling, approval routing, compliance checking and monitoring. So, it offers too many advantages to businesses, like:

  • Reduction in fixed costs of processing invoices: This is the most straightforward benefit a business can expect from touchless invoice processing systems. Conventional invoice capture, matching, verification, approval and payment processing are tremendously labour-consuming tasks. Automation of repetitive manual tasks reduces employee costs. 
  • Faster invoice verification and approval cycle: Manual invoice processing is prone to errors and discrepancies, especially with increasing volume of invoices and vendors. Reducing these errors requires multiple rounds of manual verifications. It delays approval and payment processing. Automation expedites these processes and enables companies to avoid unnecessary delays in invoice processing.  
  • Minimal chances of errors and discrepancies: Minimal human intervention means reduction in data entry errors, false verifications and wrong approvals. So, companies can be confident about minimal chances of future discrepancies and disputes.  
  • Better vendor management and fraud prevention: Vendor fraud is a serious challenge to any business and the major reason behind falling prey to such frauds is erroneous invoice verification. For example, bogus invoices can be identified easily through 3-way matching. But large invoice volumes sometimes compel an accounts department to ignore minor details. Automation reduces human intervention in data capture, verification and approval process. This helps manage vendors better with increased protection against fraudulent practices. 
  • Real-time financial visibility across AP workflow: Automation technologies also allow capturing every interaction in a process and analyse those interactions for better control of performance. For example, touchless invoice can help identify a lot more Key Performance Indicators(KPIs) than conventional manual invoice processing. 

How does touchless invoice processing work?

Touchless invoice processing workflow depends on various factors, such as:

  • complexity of invoices
  • volume of invoice 
  • frequency of invoices
  • system integration 
  • data compliance 
  • data security protocols 
  • size of the vendor ecosystem 
  • approval route   
touchless invoice processing workflow

Based on the standard practices, we can segregate touchless invoice processing workflow in the following sequences. 

  1. Data extraction and capture from invoices in physical and EDI (Electronic Data Interchange) formats 
  2. Validation of invoice data through 3-way matching 
  3. Routing of verified invoices to authorised approvers 
  4. Payment processing and reporting payments to ERPs 

Automatically match PO and non-PO invoices

When an invoice is raised against a Purchase Order, it is termed as PO invoice. Such invoices follow the standard practice of procurement. A company issues a PO to a selected vendor detailing quantity, price and technical specifications. The vendor issues invoices based on that PO. Touchless invoicing verifies such invoices using the 3-way matching technique. Usually, the system captures data using OCT tools from POs, supply receipts and invoices. It tallies data extracted from all three documents. If they match, an invoice is verified for payment approval. 

Non-PO invoices, on the other hand, do not originate from purchase orders. Such procurements emerge outside the standard procurement practices and often cause various challenges. Touchless invoice processing systems use OCR tools to capture data and make it available to authorised approvers. Approvers then verifies such invoices after a thorough internal review. Verification and approval of non-PO invoices require manual intervention. However, data capture automation makes decision-making easier and more accurate for such invoices. 

How to implement touchless or zero-touch invoice processing in accounts payable workflows

The steps to implement touchless invoice processing in accounts payable workflow are as follows:

  1. Identify manual touchpoints in AP 
  2. Choose appropriate automation tools 
  3. Digitise documentation 
  4. Implement the tools and train stakeholders 
  5. Monitor and evaluate for continuous improvement 

Frequently Asked Questions

What is touchless invoice processing in accounts payable?

Touchless invoicing is an application of business process automation technologies that streamlines and automates complex, repetitive tasks in invoice receiving, verification, and approval.

What is a touchless invoice rate?

Touchless invoice rate is the volume or number of invoices processed without any human intervention. 

Can touchless processing handle both PO and non-PO invoices?

Touchless invoice processing can be fully implemented for PO invoices. Non-PO invoices also benefit from touchless technologies, which might require internal review and manual interventions. 

What technologies are involved in touchless invoice processing?

Some of the technologies involved in touchless invoice processing are, 

  • Optical character recognition 
  • Electronic data interchange 
  • Machine learning 
Index

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