Touchless invoice processing explained

Despite the increasing digitization of business processes, many organizations still rely on manual invoicing systems. This approach often involves labor-intensive tasks such as physically processing invoices, manual data entry, and cross-checking information. These methods not only introduce significant inefficiencies but also heighten the risk of human error, which can lead to payment delays, inaccuracies in financial reporting, and unnecessary administrative costs.

In response to these challenges, touchless invoice processing is emerging as a transformative solution. By integrating automation and artificial intelligence (AI), touchless systems can seamlessly extract, validate, and process invoice data without requiring manual intervention. This shift to automation streamlines workflows, reduces the potential for errors, and accelerates the entire invoice lifecycle.

What is touchless invoice processing?

Touchless invoice processing refers to the fully automated method of handling invoices without the need for any human intervention. Touchless processing leverages advanced technologies like optical character recognition, artificial intelligence, and machine learning to automatically capture, verify, and approve invoices in real-time.

This approach completely removes the need for human touch in the process, making it faster, more accurate, and much more efficient.

Why manual invoicing is costing you more than you think

Many organizations today still rely on manual or semi-automated invoice processing methods. While semi-automated solutions may use tools like OCR to capture data, they often still depend on significant human involvement for validation, matching, and approvals. Both approaches introduce inefficiencies that can significantly increase operational costs and risk.

Common pitfalls in manual or semi-automated invoice processing

1. Delayed approvals and payment cycles

In manual and semi-automated workflows, invoices typically require human review and intervention at several points. For example, a professional services firm reported that semi-automated processing still resulted in invoice approval delays averaging 7–10 days due to bottlenecks in validating data and resolving discrepancies. These delays caused late payments and missed early payment discounts, directly impacting the company’s cash flow.

2. Error-prone data handling

Semi-automated processes rely heavily on human review to catch errors in data captured by OCR. A retail company found that nearly 10% of invoices still contained errors requiring manual correction, such as incorrect vendor information or mismatched purchase orders. These errors caused rework and slowed down the payment process, ultimately increasing administrative overhead.

3. Lack of real-time visibility and control

Without full automation, tracking invoice status remains challenging. Semi-automated systems often require employees to manually check the status of invoices, update records, or chase approvals. This lack of real-time visibility leads to misplaced invoices and missed deadlines, especially in organizations with high invoice volumes.

Key benefits of touchless invoice processing

Key benefits businesses can expect when they implement a touchless invoice processing system.

1. Faster invoice turnaround and approvals

In manual invoice processing, each invoice typically moves through multiple hands: data entry, validation, approvals, and posting. This can take days or even weeks, especially when approval chains are long or documents are misplaced. With touchless invoice processing, invoices are automatically captured through email or uploads and entered into the system using OCR. AI matches invoice data with purchase orders and goods receipts almost instantly. Approval workflows are triggered automatically, with reminders and escalations in place.

Real Outcome: Processing time is reduced from days to hours, improving cash flow planning and vendor satisfaction without requiring human follow-up at every step.

2. Reduced human errors and data inaccuracies

Manual data entry is one of the biggest sources of error in invoice processing. Mistyping an amount, missing tax fields, or duplicating an invoice can lead to overpayments, underpayments, or compliance risks. Touchless Invoice Processing eliminates the need for manual input by using AI and machine learning algorithms to extract, validate, and match invoice data accurately. Rules can be set to automatically flag anomalies or mismatches, further reducing risk.

Real Outcome: Error rates drop drastically, resulting in fewer payment disputes, less rework, and a smoother end-to-end accounts payable cycle.

3. Lower processing costs and operational overhead

Manual invoice processing requires substantial time and resources. Staff need to input data, chase approvals, manage exceptions, and handle paper or PDF invoices manually. By adopting touchless invoice processing, companies can reduce their cost per invoice by up to 60-70%. The system handles the bulk of repetitive tasks, allowing finance teams to shift their focus from processing to analysis and decision-making.

Real Outcome: Significant cost savings on labor, paper, storage, and error correction, while maintaining or improving processing speed and accuracy.

4. End-to-end visibility and real-time tracking

One of the most significant issues with manual operations is a lack of transparency. Teams often struggle to locate invoices in the approval pipeline or understand outstanding liabilities at any given time. Touchless invoice processing provides real-time dashboards that show the status of each invoice, whether it’s pending, approved, paid, or flagged for review. Every action taken is recorded in a digital log, ensuring full traceability.

Real Outcome: Finance leaders can make faster, data-driven decisions with clear visibility into invoice aging, pending approvals, and vendor payment schedules.

5. Compliance, audit readiness, and reduced fraud risk

Regulatory compliance, whether related to GST, tax laws, or internal controls, requires clear documentation and traceable approvals. Manual processing often fails to maintain consistent records and exposes businesses to risk. Touchless invoice processing ensures that every invoice follows a predefined workflow and every step is automatically logged. Built-in controls can detect duplicate invoices, unauthorized vendors, or payments outside policy thresholds.

Real Outcome: Audit processes become faster and easier, compliance is maintained consistently, and the risk of financial fraud is significantly reduced.

6. Scalability across locations and volumes

As businesses expand, the volume of invoices typically increases. A manual approach may require more resources, which limits scalability and adds complexity. Touchless invoice processing scales effortlessly with business growth. Whether a company processes hundreds or tens of thousands of invoices monthly, the system adjusts to volume without increasing headcount or infrastructure.

Real Outcome: Businesses can grow their vendor base and transaction volume without worrying about bottlenecks or added overhead in the finance function.

7. Stronger vendor relationships and on-time payments

Late payments caused by delays or errors can harm vendor relationships, disrupt supply chains, and result in penalty fees or loss of favorable terms. By enabling faster and more accurate payments, touchless invoice processing ensures vendors are paid on time and disputes are minimized. Automation also allows vendors to check payment status through self-service portals, reducing dependency on AP teams.

Real Outcome: Improved vendor trust, better contract terms, and fewer inquiries or escalations related to payment status.

8. Support for remote and distributed teams

Traditional invoice processing often depends on in-person handling of documents, physical approvals, or access to on-site systems. This creates challenges for hybrid or remote teams. With touchless invoice processing, the entire invoice workflow from capture to approval can be managed digitally and securely from anywhere. Cloud-based platforms ensure accessibility and business continuity across locations.

Real Outcome: Finance teams remain productive regardless of location, and businesses maintain uninterrupted operations during transitions, crises, or remote work shifts.

9. Intelligent insights and continuous improvement

Beyond automation, touchless invoice processing systems offer analytics and reporting features that highlight bottlenecks, frequent discrepancies, and process delays. This data can be used to improve vendor compliance, negotiate better terms, or optimize approval workflows.

Real Outcome: Organizations gain a competitive advantage by turning accounts payable from a cost center into a strategic function supported by insights and automation.

How touchless invoicing works: step-by-step

Here’s a detailed breakdown of how touchless invoicing works in practice.

Step 1: Invoice capture through touchless invoicing

The touchless invoicing process starts by automatically capturing incoming invoices from various sources such as email, supplier portals, EDI feeds, or document uploads. Instead of manually downloading or scanning invoices, the system is integrated to detect and ingest invoices the moment they arrive. This automated intake is a key feature of touchless invoicing, ensuring all invoices enter the system digitally without delay or human involvement.

Step 2: Intelligent data extraction with touchless invoicing

Once the invoice is captured, touchless invoicing software uses optical character recognition and artificial intelligence to extract data from the document. Critical information, such as invoice number, vendor name, PO number, date, line items, taxes, and total amount, is pulled into structured fields. Touchless invoicing systems are trained to handle varied layouts and formats, allowing accurate data extraction even when vendors use non-standard templates.

Step 3: Touchless invoicing enables PO and GRN matching

After extraction, touchless invoicing continues with automatic validation against purchase orders and goods receipt notes. This three-way matching confirms whether the invoiced quantity and price match what was ordered and received. If the invoice meets validation rules, it proceeds automatically. This critical stage of touchless invoicing helps prevent overpayments, ensures compliance, and enforces procurement policy without manual checks.

Step 4: Exception handling within touchless invoicing

If discrepancies are found, such as missing PO numbers, pricing mismatches, or duplicate invoices, the touchless invoicing system flags them as exceptions. Exceptions are automatically forwarded to the right stakeholders for resolution using predefined workflows. While most invoices flow through the system uninterrupted, touchless invoicing ensures that exceptions are addressed quickly and efficiently without disrupting the overall process.

Step 5: Touchless invoicing automates the approval process

Once validated, bills are routed through an automated approval system. Touchless invoicing systems determine the correct approval path based on business rules, such as department, invoice value, or project codes. Approvers are notified digitally and can approve or reject invoices through a mobile or web interface. This digital routing replaces traditional email chains or paper-based sign-offs, making touchless invoicing faster, traceable, and compliant.

Step 6: Seamless ERP integration with touchless invoicing

Following approval, touchless invoicing software posts the invoice directly into the organization’s ERP or accounting system. The system populates all required fields such as GL codes, tax amounts, and vendor details, eliminating the need for manual data entry. Touchless invoicing ensures that financial systems remain up to date with clean, validated data for accurate reporting and payment scheduling.

Step 7: Payment scheduling and execution via touchless invoicing

Once posted, invoices are automatically queued for payment according to due dates and agreed vendor terms. Touchless invoicing platforms can integrate with payment systems or banking networks to execute payments through preferred methods such as NEFT, RTGS, ACH, or wire transfer. The entire process is governed by pre-approved rules, reducing payment delays and enhancing cash flow management.

Step 8: Audit logging and archival through touchless invoicing

Every action taken during invoice processing is logged automatically by the touchless invoicing system. From invoice receipt to final payment, every step is timestamped and securely kept. Invoices and related records are archived digitally for easy access during audits or compliance checks. With touchless invoicing, businesses maintain full traceability, meet regulatory requirements, and avoid paperwork burdens.

What to look for in a touchless invoice processing software

1. End-to-end automation capabilities

The core purpose of touchless invoice processing is to eliminate manual steps from invoice capture to payment. A reliable software solution should offer automation across every stage of the invoice lifecycle, including invoice intake, data extraction, PO matching, approval workflows, ERP posting, and payment processing. Look for a platform that minimizes human involvement, handles high-volume processing, and consistently reduces turnaround time.

2. Accurate OCR and AI-powered data extraction

Effective touchless invoice processing depends on how accurately the system can extract and understand invoice data. The software should use advanced optical character recognition and artificial intelligence to read data from different invoice formats, PDFs, scanned images, XMLs, and more. It should also support self-learning, so the extraction quality improves over time, even with varied vendor templates.

3. Seamless ERP integration

To ensure smooth financial operations, the touchless invoice processing software must integrate seamlessly with your ERP or accounting systems (such as TYASuite, SAP). The software should support real-time syncing of invoices, GL codes, tax details, vendor records, and payment status without manual uploads or exports. A lack of ERP integration can lead to data silos and inefficiencies.

4. Configurable 2-way and 3-way matching

Matching invoices to purchase orders (2-way) and goods receipt notes (3-way) is critical for ensuring invoice accuracy and preventing fraud. A robust touchless invoice processing system should support both types of matching based on your business rules and tolerance thresholds. The system should also be able to auto-reconcile matched invoices and only route unmatched or flagged items for manual review.

5. Smart exception handling and approval workflows

Even in automated environments, exceptions like quantity mismatches or missing POs may occur. The software should intelligently identify these issues and route them to the right stakeholder through customizable workflows. Additionally, it should offer multi-level approval routing based on configurable parameters like department, invoice amount, or vendor type, all within the system, without relying on email threads.

6. Vendor self-service portals

While not mandatory, touchless invoice processing software that includes a vendor portal can significantly reduce the workload on accounts payable teams. Vendors can submit invoices, track payment status, and resolve issues without back-and-forth emails or phone calls. This improves vendor relationships and increases transparency throughout the invoice process.

7. Real-time visibility and reporting

Finance teams need real-time insights into invoice statuses, payment timelines, bottlenecks, and cash outflows. Look for software that provides intuitive dashboards and detailed reports for tracking KPIs like invoice cycle time, exception rates, and on-time payment percentages. Effective touchless invoice processing tools help transform AP from a back-office task into a data-driven function.

8. Secure audit trails and compliance support

Every invoice action, from capture to approval to payment, should be logged with user details and timestamps. A compliant touchless invoice processing system ensures secure data archiving, document retention, and traceability. It should also support regional tax regulations, digital signatures, and audit readiness for both internal and external reviews.

9. Scalability and performance under high volume

As your business grows, the volume of invoices will increase. Choose a touchless invoice processing software that can scale with your operations, processing hundreds or thousands of invoices daily without performance issues. The solution should also support multiple business units, locations, and currencies if you're operating across regions.

10. Ease of use and fast implementation

Even the most powerful software will fail if it’s difficult to use or requires long onboarding times. Select a solution that has a clean user interface, minimal learning curve, and quick deployment options (especially if it's cloud-based). Look for role-based access, mobile accessibility, and straightforward admin configuration.

How TYASuite simplifies touchless invoice processing

1. AI-powered OCR setup and customization

TYASuite enables OCR functionality at a company-specific level. The system is trained to understand each company’s invoice structure by using real invoice data submitted to the platform.

• The OCR engine becomes more accurate over time as more invoices are processed.

• Users can train the AI engine to predict values for important fields like GL Codes, HSN Codes, and TDS, ensuring invoice data is mapped accurately to financial systems.

This training is done via a dedicated AI training interface, offering full control and transparency into how the OCR learns and improves—something most generic systems do not offer.

2. Seamless invoice upload with smart field suggestions

TYASuite's Scan Invoice feature allows users to upload invoices directly using drag-and-drop or upload buttons. Once uploaded, the OCR engine processes the invoice and pre-fills key fields automatically.

Key field suggestions include:

• Vendor name: Matched based on document content or GST number.

• Ship location: Mapped using GST and historical invoice data.

• Unit type and HSN code: Auto-suggested based on frequency of use or extracted values.

These suggestions reduce the need for manual data correction and speed up the invoice entry process crucial to achieving true touchless invoicing.

3. Smart email integration (IMAP Configuration)

TYASuite supports direct email-based invoice capture through IMAP integration. Once configured, the system automatically retrieves invoices from a designated email inbox no manual downloads or forwarding required.

• Supports secure access using app passwords and 2-step verification.

• Integrates with major email providers such as Gmail.

• Helps maintain a centralized, secure flow of invoice intake without human touchpoints.

This is a major step toward enabling touchless invoice processing, especially for organizations receiving large volumes of invoices via email.

4. Automated invoice creation via email (Mailing Invoice Module)

Invoices fetched from email are automatically listed in the Mailed Invoice interface within TYASuite. From here, the system:

• Automatically detects duplicates based on invoice number.

• Shows a breakdown of total processed, unprocessed, and duplicate invoices.

• Allows users to review and confirm suggested fields before final submission—mirroring the Scan Invoice experience.

An internal dashboard also keeps users informed about pending invoices through email dashboard notifications. This visibility ensures that no invoice goes unprocessed and helps maintain end-to-end control without requiring spreadsheets or email threads.

5. Real-time dashboard and user-level control

TYASuite provides real-time status updates on invoice processing, including:

• Processed and unprocessed invoice counts

• Duplicate detection alerts

• Email dashboard statistics for Raiser-role users

This granular visibility gives finance teams and approvers complete oversight without needing to dig through inboxes or folders—streamlining decision-making and approvals within a touchless invoicing environment.

6. Easy ERP posting and workflow integration

Once invoice data is reviewed and confirmed, TYASuite seamlessly posts it into the financial system. The platform supports multi-level workflows, automatic validations, and approval routing, enabling faster invoice clearance while maintaining full compliance.

• Ensures GL codes, tax fields, and product information are mapped correctly

• Eliminates manual entry into accounting software

• Allows finance teams to focus on exceptions, not everyday data handling

This integration makes TYASuite's solution truly end-to-end in delivering touchless invoice processing.

Conclusion

Manual invoicing methods may have worked in the past, but they no longer meet the demands of modern finance operations. As businesses face growing pressure to improve accuracy, speed, and compliance, automated invoice handling without manual intervention is becoming a critical component of financial transformation.

touchless invoice processing not only simplifies routine tasks but also brings structure, transparency, and control to the entire accounts payable cycle. With smart features like real-time tracking, seamless integration, and intelligent validation, solutions like TYASuite help organizations eliminate delays, reduce errors, and make informed decisions faster.

Moving toward a fully automated invoicing system is not just about saving time; it’s about building a finance function that’s agile, resilient, and ready to support long-term business objectives.

Ready to go touchless?

Start streamlining your invoice process with TYASuite today.