Every transaction is recorded with a digital trail, showing who coded it, when, and how the decision was made. Efficient expense management is crucial for organizations aiming to maintain financial accuracy and operational efficiency. The General Ledger (GL) coding of invoices plays a pivotal role accounting in this process, ensuring that each transaction is accurately categorized within the general ledger. DOKKA stays up-to-date on tax codes and accounting standards, automatically applying them to invoices to ensure full compliance. DOKKA uses predefined rules to ensure consistent coding, regardless of who is responsible.

The benefits of automated invoice coding

• This greater visibility allows you to track profitability, cash flow, and performance and make informed business decisions.
• For instance, you might code toner cartridges to office supplies (GL 6100), while a new printer could go to office equipment (GL 1500) as a fixed asset rather than an expense.
• There are multiple steps that need to happen before an invoice can be successfully marked as “paid” by an AP team member.
• And what may seem a simple mistake can have a snowball effect across an entire organization.
• For AP and finance teams, manual invoice coding often leads to inefficiencies, inconsistencies, and lost opportunities for optimization.
• Automating invoice processing is just one step in the broader evolution of financial operations.

The best invoice automation solution integrates seamlessly with existing ERP, procurement, and accounting systems. Businesses should prioritize platforms with AI-driven data capture, customizable approval workflows, and advanced analytics to maximize efficiency. Before implementing automation, businesses should evaluate their existing invoice processing methods. Identifying inefficiencies—such as approval bottlenecks, recurring errors, or delayed payments—helps determine where automation will have the greatest impact. Invoice automation isn’t just about streamlining workflows—it’s about transforming financial operations into a strategic advantage.

Step 1: Invoice data capture

This type of coding is particularly useful in larger organizations with multiple departments and units. In this article, we provide a straightforward answer to the question of what is coding in invoice processing. We’ve walked through the twists and turns of traditional invoice coding challenges, now let’s pivot to a straighter path.

ERP integration

See all captured invoices in a centralized queue, with time stamp, status, and uploader name. The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the invoice coding advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.

Time and cost savings

Companies that follow an automated invoicing process increase productivity by 33% and experience a 42% reduction in costs. Invoice coding enables financial experts to gain insight into accurate expense patterns. It shows up in your metrics as invoice exceptions—the top AP challenge (53%)—and they still average ~14% of invoices industry-wide. Now that we’ve covered the basics of invoice coding, let’s take a more detailed look at how it works. Discover key trends and strategies for 2025 with finance leaders BC Krishna and Yash Madhusudan in this must-attend webinar on the future of AI, AP automation, and expense management. Explore why HighRadius has been a Digital World Class Vendor for order-to-cash automation software – two years in a row.

Invoice details are where humans get frustrated and invoice capture solutions reach their limit. In a time when supply chains are unstable and inflation rising, focusing on vendor and customer service are some of the ways of ensuring operating stability. This makes Smart Coding your ally in conquering the complexity of invoice processing. Now that we have a general understanding of what invoice coding is, let’s take virtual accountant a closer look at some of its key components and why they are important.