If someone in your business spends part of every week retyping supplier invoices into the accounts system, this guide is for them and for the owner or finance lead who pays for that time. It covers the ways to automate supplier invoice entry, how to choose between them, and the checks that need to stay with a person.
In most businesses the routine is similar. Invoices arrive as email attachments, by post or through a supplier's online portal. Someone opens each one, types the supplier, date, invoice number, amounts and VAT into the accounts, saves the PDF and moves on. Something is nearly always missing, such as the invoice sent to a colleague on leave, or the one with no order number that waits in the inbox until somebody chases it.
What retyping invoices actually costs you
The obvious cost is time, and it is rarely measured, because the work is done in short gaps between other jobs.
The less obvious costs matter more. A mistyped amount usually shows up when the supplier's statement doesn't agree, but a mistyped bank account number may not show up until the supplier asks where their money is. An invoice that arrives by email and again by post can be paid twice. Month-end waits on invoices still sitting in someone's inbox. And often only one person knows which suppliers need an order number and which account the cleaning invoice goes to, so their annual leave means a backlog.
What can be automated, and what should stay with a person
It helps to break the job into its steps, because they aren't equally suited to automation:
- the invoice arrives, by email, post or a supplier portal
- the details are read: supplier, date, invoice number, net amount, VAT, total, and sometimes each line
- it is matched to the supplier in your accounts and, if you use them, to a purchase order (the order you raised before buying) or a contract
- it is coded to the right account, and to a project, client, fund or company if you track those
- someone approves it
- it is entered in the accounts system
- it is paid
Reading the details and keying them in are the easiest steps to automate, and they take most of the typing time. Matching and coding can largely be automated for regular suppliers whose invoices look the same each month, with a person checking the result.
Approval should stay with a person, as should anything unusual: a new supplier, an amount well above normal, an invoice over your approval limit and, above all, any change to a supplier's bank details. Software can prepare a payment run, but releasing the money should stay with someone who has the authority to do it.
Three ways to do it
For many businesses the first of these is enough.
Use what your accounts software already offers
Check whether your accounts software can already read invoices, or gives you an email address to forward them to. If your suppliers don't change much and their invoices are simple, try this first. It may already be included in what you pay. Check whether the invoices are processed anywhere other than your accounts system.
Test it on your own invoices before relying on it. Check how it handles invoices with more than one VAT rate, whether it reads each line or only the total, whether it warns you about an invoice that has already been entered, and whether it remembers how you coded a supplier last time.
A specialist capture tool that posts into your accounts system
These tools sit between your inbox and your accounts. Invoices are forwarded to them, they read the details, and the result is posted to your accounts once someone has checked it. They suit businesses with more invoices, or more varied layouts, than the accounts software handles well. Your accountant or bookkeeper may already use one.
Weigh up the trade-offs before signing up. It is another subscription, often charged per user or by the number of documents, so ask how the price changes as you grow. It is also another place where your supplier details are held, so ask whether you can export the invoice images and the extracted details if you stop using it.
Something built around your own process
A ready-made tool assumes your process looks like most other businesses'. A build makes sense when yours doesn't: when each invoice has to be matched to a purchase order, contract, project, fund or client; when it has to follow your own approval route; when invoices for several companies arrive in one shared inbox in mixed formats; or when the details need to go into more than one system.
This is the kind of work we do, as part of AI agents and automation. It is a custom build, so it is scoped and quoted for your process, and you own it. If you're not sure you need outside help at all, our article on getting help with AI as a small business covers when you can manage without it.
How the software reads an invoice, and why someone still checks it
Older capture tools learn where each known supplier puts the invoice number and the total, and are reliable for suppliers they have seen before. Newer tools use AI models that can read a layout they haven't seen, which helps if new suppliers appear every month. Some products combine the two.
Both approaches do well on a clean PDF produced by the supplier's own system. They do less well on phone photos, scanned paper, handwritten notes, invoices that run over several pages, and credit notes that look like invoices. An AI model can also give an answer that looks plausible but is wrong, such as a total read from the wrong line, where an older tool might have left the field blank.
So test with your own awkward invoices, not the supplier's demonstration set. Take twenty or thirty from recent months, including the ones that caused trouble, and compare what the tool reads with what was actually entered. Choose a tool that tells you when it isn't sure rather than guessing. A sensible arrangement is for clean invoices from familiar suppliers to get a quick look before they are posted, while anything the tool is unsure of, anything from a new supplier and anything over a set amount is held for a proper check.
The checks that keep it safe
Automation speeds up entry but doesn't check that the invoice itself is genuine or correct. These are the checks we would want in place whichever route you choose. They are good practice rather than legal requirements, and your accountant or auditor may have views on the detail.
- Duplicates. Flag any invoice with the same supplier, invoice number and amount as one already entered, including one that arrives twice by different routes, such as emailed and then posted.
- Bank details. Never accept a change of bank details from an invoice or an email alone. Phone the supplier on a number you already hold, not one given in the message, and note who checked and when. UK Finance's Take Five campaign describes this as invoice and mandate fraud: criminals pose as a supplier and send new bank details.
- Approval limits. Agree who can approve what, with an amount above which a second person approves. Keep the person who sets up suppliers separate from the person who approves their payments (accountants call this segregation of duties).
- Coding. Flag any invoice coded to a different account from that supplier's usual one.
- A record of what happened. Keep what was read, who checked it and who approved it, in a form your accountant or auditor could follow. This is the audit trail.
- A fallback. Decide what happens when the tool is down or clearly wrong, so invoices are still entered and paid on time.
If your team will be using AI tools on invoices, these rules belong in a short AI policy for your team, so everyone knows who approves and who checks.
Your data and who can see it
Invoices carry your suppliers' bank details, and where a supplier is a sole trader, the invoice identifies a person. The ICO describes personal data as information that relates to or identifies an individual.
Before invoices go through any tool, ask the supplier where the files are stored and processed, whether they are used to train an AI model, who at the supplier can see them, and what you can take with you if you leave. Our questions to ask your software suppliers about their new AI features go through these in more detail.
A short note on e-invoicing
The government published its roadmap for e-invoicing on 28 October 2026. It says that from 1 April 2029, VAT invoices will have to be issued as e-invoices, and that VAT-registered businesses will need to be able to issue and receive them unless a specific exemption applies. The detailed rules are still to be set out in legislation. An e-invoice here means structured data that software can read directly. The roadmap says invoices "shared as digital files, but not as structured data, are not classed as e-invoices", so a PDF attached to an email won't count.
Structured invoices should make automated entry easier, because there is nothing to read off a page. It isn't a reason to wait, though: the start date is more than two years away, invoices from suppliers who aren't VAT-registered aren't VAT invoices, and the exemptions are still to be confirmed. (Checked on gov.uk on 11 November 2026. This is a summary, not tax advice.)
A sensible first step
Start with one stream of invoices rather than a project: the supplier who sends the most, or the inbox where most of them land. For a fortnight, note how long entering them takes and how many need correcting. Then run your chosen route on the same stream alongside the manual process for a few weeks, compare the time, the errors and how many invoices still needed a person, and decide after that.
Illustrative example, not a client: a business that runs several related companies, or a fund administrator looking after several funds, receives supplier invoices for all of them in one shared inbox. Reading each invoice is straightforward; most of the time goes on deciding which company or fund it belongs to and getting it to the right approver, and a capture tool leaves that to a person. A build that suggests the company and account from past invoices and routes each one to the right approver could be tried on that one inbox before anything bigger is agreed.
If invoices are your clearest problem, a short pilot on one task is a reasonable way to test it. If several tasks are competing for attention, an assessment of where AI would actually help will rank them first.
Common questions
What is the best way to automate accounts payable for a small business?
Accounts payable means recording and paying the bills you owe suppliers. For most small businesses, start with what your accounts software already offers and test it on your own invoices. The three routes above explain when to look further.
Do I need to keep the original invoices if I automate?
HMRC's Record keeping for VAT (VAT Notice 700/21) gives two examples in section 6. If your software only holds selected details typed from an invoice, you still need to keep the invoice. If it keeps a scanned image containing all the details needed for VAT, you don't need the original unless it's required for another purpose. The notice also says you must generally keep VAT records for at least six years, and records used for other taxes may need to be kept longer, so check with your accountant.
Is e-invoicing mandatory in the UK?
Not yet. The government's roadmap, published on 28 October 2026, says VAT invoices will have to be issued as e-invoices from 1 April 2029, with limited exemptions expected. Invoices from businesses that aren't VAT-registered aren't VAT invoices, so they aren't covered.
How do I stop paying the same invoice twice?
Have your accounts system or capture tool flag any invoice with the same supplier, invoice number and amount as one already entered, and check flagged items before approval. Asking suppliers to send invoices to one inbox also makes it less likely that the same invoice arrives twice and is entered by two people.
Talk to us
If invoices reach you by email and someone retypes them, tell us how it works today on a free 30-minute call. We'll say plainly whether your accounts software or a ready-made tool will do the job, or whether it needs something built around your process.
This article is general information, not legal, financial or regulatory advice.