Everything About Coding Invoices
Everything About Coding Invoices
In the Encode menu, all invoices that can be processed (coded) are displayed. By clicking on the row or the pencil icon in the overview, you will be taken to the page where you can code the invoice details.
How are invoice details automatically filled in?
We want you to spend as little time as possible coding an invoice. The Spend Cloud assists in various ways. For instance, you can fill in standard values for a relation, recognize data via our AI solutions Smartscan and Smart Suggestions , and set up various workflows. We recommend automating as much as possible so that you only need to manually code the exceptions.
I have a question about a specific coding field.
There is a lot of information on the coding page. Not all fields will be immediately understandable. Therefore, in the article below, we have explained each field one by one.
Extra options on the coding page
Apart from coding an invoice, there are different other options at the top of the coding page, also known as the 'coding buttons.' These buttons help you in the coding process and ensure that you can perform some actions more easily.
Automatically filled coding data
Invoice text recognition
When processing an invoice from the Mailbox, the Spend Cloud will attempt to read the information from the invoice. These fields are automatically applied to the coding fields based on this recognition.
Text recognition of a PDF invoice
If you have processed a PDF invoice, text recognition will be performed by our AI tool SmartScan. On a PDF invoice, several fields can be recognized, such as the creditor, invoice date, total amount, payment reference, and order number.
Recognition of invoice data in an XML invoice
For an XML invoice, an XML invoice field layout is applied to import as much data as possible from the XML into the Spend Cloud. If this is not possible, we will fall back on SmartScan to extract certain data from the PDF provided with the XML. The more fields that are pre-filled, the less work you have coding an invoice.
Tip: Discuss with suppliers whether they can provide XML invoices and what the possibilities are to include standard data in the invoice, such as a general ledger account or cost center number.
Number of automatically generated invoice lines
In many cases, the Spend Cloud will already automatically create invoice lines. For XML invoices, all invoice lines are read. These are grouped into one invoice line by default, but can be split, for example, per cost center or general ledger account, based on settings for the relation. SmartScan always creates one invoice line for a PDF invoice. When an invoice is matched to an order, multiple lines can be created based on the order's coding.
Automatic coding by linking procurement orders
If your organization uses the Procurement and Invoice Processing modules, the accounts payable department can match procurement invoices to procurement orders. A match ensures that a link is created in the Spend Cloud between the invoice and the order. You can apply the coding recorded for the order to the invoice through this link. Additionally, depending on how it's set up with the supplier, an invoice line can be automatically approved if the invoice amount matches the order amount. Matching invoices to orders can save you a lot of time coding because the data from the order is transferred. Want to learn more about the possibilities of matching? Read the following article: Matching orders
Coding from a preset template
When a specific type of invoice regularly recurs, and there is no link with an order, you have the option to code it using a template. With a template, you can 'pre-code' an invoice. In a template, you set several standard values for a specific invoice. When you select this template during coding, all registered fields are automatically filled. This way, you can quickly and easily code recurring invoices.
Want to know more about how to save time during coding by using templates? Read the following article: Templates.
Entering the contract number from a template
When contract management is activated, you can include the contract number in a template. The advantage of this is that the contract is then automatically linked, and the invoice (if it falls within the deviation margins) skips the approval process.
Want to know more about approving invoices based on a contract? Read the following article: Automatically approving an invoice based on a contract.
Tip: You can fill in various standard values for the relation. You can also specify a standard template here. The advice is to set a standard template for the relation when the template is always applied to invoices from that specific relation. This saves even more manual work.
Coding via Default Values
Based on the creditor recognized on the invoice, several coding fields can be filled in automatically. These fields include:
- Payment Condition
- General Ledger Account
- VAT Code
- Description
You configure these standard values in the section Application Management / General / Relations. When the relation is recognized on the invoice, these details are automatically filled in. Some of this information can also be set for the entire administration via the section Application Management / General / Administrations. To learn more about filling in standard values and setting up standard descriptions, read the following articles: Managing Relations & Standard Descriptions for Invoice Headers and Lines.
Note! The standard values for the relation will be overridden by the standard settings of the administration.
AutoSuggest / Smart Suggestions
If coding fields cannot be filled based on the above functionalities and remain empty during the invoice addition, our AI tool will attempt to fill them in for you. We do this using Smart Suggestions technology. When a field is highlighted in yellow, it has been filled in by AI. This is done based on, among other things, historical data and predictive power of Artificial Intelligence. Read here more about Smart Suggestions when encoding an invoice
Conclusion
There are various ways to save time during invoice coding. The best solution for your organization depends on several factors. If you use the Procurement module, you can save a lot of time by linking orders to invoices. Requesting XML invoices from relations and discussing with them about including certain standard data can also save time. If that's not an option, standard values are a good solution since you often receive the same invoices/types of costs from relations. You can save time by letting Spend Cloud automatically fill in standard data when a relation is recognized on the invoice. You can combine multiple solutions to pre-fill invoice data as much as possible.
Explanation of Coding Fields
An invoice is divided into two parts: the invoice header and the invoice line(s). The header processes general information such as administration, creditor, total amount, etc. In the invoice line(s), you can further break down and detail the costs, for example, by distributing costs over multiple cost centers or specifying them per general ledger account. Below, we delve deeper into the coding fields.
Invoice Header
Journal Number
The journal number is a unique number assigned to each invoice. It is automatically generated when an invoice is created, often consisting of the year, administration, and sequence number. You can view the number format via your environment's configuration settings. This number is fixed and cannot be changed.
Type of Invoice
Here you see what type of invoice it concerns, whether PDF or XML. For an XML invoice, you also see which XML invoice field layout has been applied to read the data from the XML.
Administration
This is the administration in which the invoice is processed. If the Spend Cloud environment has multiple administrations (or the possibility), you choose an administration when adding or processing from the Mailbox. The administration cannot be changed afterward. If you need to process the invoice in another administration, download the PDF (and XML, if applicable), definitively disapprove the invoice, and re-add it (XML can only be added via the Mailbox).
Relation
The text recognition fills in the creditor when one or, preferably, all three of these details are recognized:
- IBAN Number
- Chamber of Commerce Number
- VAT Number
To be recognized, the creditor must be registered under Application Management / General / Relations. If the relation entered on the invoice has a different bank account than the one recognized on the invoice, you will see a notification, indicating that the creditor was recognized based on the Chamber of Commerce or VAT number, or that the creditor was changed to another with a different bank account. This helps you quickly ascertain if the bank account on the invoice is incorrect or if there's an issue with the relation data. The system also displays in a dropdown all creditors with a recognized bank account from the invoice, even if multiple are recognized. This allows you to quickly select the right creditor. If no relation is recognized and you cannot select one, verify if it's in your financial package. You can import it using the Import button in the overview. If you can create relations in Spend Cloud, click the plus sign next to the empty field. An existing relation can be edited via Application Management / General / Relations. Keep in mind that if you use a relation import, data might be overwritten from the import file, so you'll need to update the data (also) in the system.
Orders
If you work with the Procurement module and have orders available for this creditor, you can use the button here to match the invoice to an order. If the supplier includes an order number on the invoice, Spend Cloud can recognize it and suggest a match or automatically make a match. Read more about matching in the following article: Matching Orders
Template
If a template is available for this creditor, you can select it here. If a standard template exists for the relation, it will be automatically filled in and applied to the invoice. Read more about processing invoices with templates in the following article: Templates
The template is only applied when you select the hand icon next to the template's name.Invoice Date, Amount, VAT, Your Payment Reference, Our Payment Reference
These details can be read from the invoice. If you have set standard values or if the invoice is matched to an order, these details can be overwritten. Consider a standard VAT code or our payment reference for the relation, or the VAT code applied in a procurement order.
Remark
This is an optional field to add notes to the invoice.
File
Use this button to add an attachment. After coding, this file will be available at the bottom of the invoice and downloadable for anyone with access in Spend Cloud. When processing an invoice from the Mailbox, additional files can already be selected as attachments and will be automatically linked to the invoice.
Link Invoice / Add as Template
Check these options to link the invoice to another invoice or create a template based on the invoice coding, allowing you to reuse this coding for a new invoice. After saving the invoice, you are directed to a new screen to link an invoice and/or create the template.
Invoice Line(s)
Here, you can further code the invoice and split/detail the costs. An invoice has at least one invoice line. There is no limit to invoice lines, but when exporting invoices to a financial package, connection issues may arise if invoices with numerous lines are processed. This limit can vary per package.
Contract
If you work with the Contract Management module, you can select a contract here to link the invoice to the contract. If permitted in the contract and the invoice falls within deviation margins, the invoice line could be automatically approved based on the contract. Want to learn more about approving invoice lines based on a contract? Read the following article: Automatically Approving an Invoice Based on a Contract.
General Ledger Account
Select the general ledger account related to the costs. The chosen general ledger account largely determines the rest of the coding for the invoice line.
Automatically Filled General Ledger Account or Visible Limited List
Based on the general ledger account, standard values may be pre-selected and automatically filled once you enter the general ledger account. A coding matrix can be set up to make an input field mandatory, forbidden, or optional based on the general ledger account. You can also use the coding matrix to compile a limited selection list, for instance by linking specific cost center numbers to a general ledger account. This makes coding easier by automatically filling in data or providing a smaller selection during coding, leading to less searching and hopefully fewer coding errors. For more information, read the following articles: Setting up a Coding Matrix and General Ledger Account - Workflow and Standard Values.
Period / Number of Periods*
Enter the period the costs relate to. By default, this is filled in based on the invoice date. You can also set the relation to always have the period be a month earlier or later, for example when a creditor always invoices in advance or a month in arrears. Depending on your Spend Cloud environment setup, you might be able to choose the number of periods. If you enter more than one, the costs in your financial package will be distributed over multiple periods starting from the chosen period's month. In Spend Cloud, a period is always a calendar month.
Typically, the period is coded on the invoice line because it offers more flexibility to distribute costs. If the field is not available here, the period is coded in the invoice header. The number of periods field is an optional setting within your Spend Cloud configuration and does not work with all financial packages.
Cost Center, Organizational Unit, Employee
These fields are essential for the review process within Spend Cloud. They are interconnected. First, select the cost center to which the costs pertain, followed by the organizational unit. If only one organizational unit is linked to the cost center (or a workflow is set), it will be automatically filled in. If multiple units are linked, a manual selection is required. You can only choose organizational units linked to the cost center. Based on the organizational unit selected, an employee can be chosen.
Note: If the invoice line can be approved based on a linked order or contract, no employee needs to be selected.
The Effect of 'Cost Center', 'Organizational Unit', 'Employee' Fields on the Review Process
The employee with the lowest procurement amount in the employee field is the first to review the invoice. Next to the employee's name is their procurement limit. If the invoice amount exceeds the procurement, it will be forwarded to a reviewer within the same or a higher organizational unit with a higher procuration limit. Spend Cloud goes through available procurement levels until a reviewer with sufficient procurement approves the invoice.
Action (Optional)
Depending on your Spend Cloud environment setup, you can choose multiple actions.
- Review by Employee
This is the default setting in many Spend Cloud environments. You can select an employee in the employee field to conduct the review. - Review by Group
Selecting this option will present the invoice to all reviewers with the same procurement within the chosen organizational unit, starting with the group with the lowest procurement. Once one of these employees has reviewed the invoice, it proceeds in the process until all lines are approved. - To be Coded
If the central administration is uncertain which fields need coding, the invoice can be offered to an employee for coding. This employee completes the coding and then submits it for review.
For more information on these choices, read the following articles: Assess and encode invoice by group, and External Invoice Coding.
Aside from the 'review by employee' option, there is also the 'review by group' option. Choosing this option will present the invoice to all reviewers with procurement in the chosen organizational unit. Once one of these employees has reviewed the invoice, it moves further into the process. There is also an option to offer the invoice 'for coding'. If the central administration is uncertain which fields need coding, the invoice can be offered to an employee for coding. This employee completes the coding and then submits it for review.
Deviating Administration (Optional)
If set up in your environment, you can enter a different administration, for example, to allocate costs across multiple administrations. This is only possible if enabled and supported by your financial package. Read more about it in the following article: Booking in Deviating Administration.
Cost unit and Other (Optional) Extra Fields
Depending on your Spend Cloud environment setup, you may have the option to fill in extra fields such as cost unit or quantity(s). These free fields are usually defined during your Spend Cloud environment implementation or added later. The coding matrix of the general ledger account can determine if these fields must be filled in and if there's a limited selection list.
Sending the coded Invoice
After fully coding the invoice, click at the top of the screen to save and send the invoice coding. If the invoice cannot be automatically approved based on a linked order or contract, it will be sent for review to the selected employee (or group). At this point, the approval scheme for this invoice is set, and the invoice will be offered to successive employees until someone with enough approval level reviews the invoice. The invoice is reviewed per approval level. For example, if you have an invoice of €5,000, and approval levels of €100, €1,000, and €10,000, the invoice will be presented to three reviewers for approval. The organizational unit on which the invoice is recorded is also looked at. If there is no reviewer with enough approval in the chosen organizational unit, the invoice will be offered in a higher organizational unit within the organizational structure. If the invoice is disapproved, it returns to the central administration. After full approval, the invoice can be exported to your financial package.
If you want the costs to be instantly visible in your financial package, the pre-registration functionality might be for you. Read more in the following article: Pre-registration via a Web Service.
Other Functionalities within Coding
Send
Invoices that are coded receive the status 'To be Sent'. You can recognize them in the overview by the paper airplane icon. Sending an invoice forwards it to the employee(s) responsible for reviewing it.
Reapply Recognition
Use this button if the Spend Cloud hasn't been able to extract all data from the invoice. When selecting the button, you'll see an overview of all uncoded invoices. Selecting the invoices will reapply the text recognition in hopes of extracting more data. The button is ideal in two situations:
- When the Creditor is Not Properly Recognized: If many invoices from a new creditor have arrived, you can first create the creditor in Spend Cloud or your financial package. In the latter case, import it into Spend Cloud. Then, you can easily reapply recognition to all (selected) invoices via this overview. You can also use this if a creditor cannot be recognized based on an IBAN by adding a Chamber of Commerce or VAT number to the creditor details and performing the recognition again.
- When the Text of the PDF or XML Invoice is Not Properly Recognized: If a creditor sends many XML invoices and some data isn't read correctly, you can adjust the XML invoice field layout. Then, reapply the XML field layout via the same button in this section.
Note: Reapplying recognition on invoices re-runs the process of adding a new invoice. It may take a few seconds before you see the invoice again in Coding.
Import Relations
From the 'Coding' section, it is also possible to run a (web service) import for relations. This comes in handy if there are invoices to be coded where the relation isn't recognized. After importing (new) relations, it helps to execute 'Reapply Recognition' so the system can fill it in on invoices where no relation was recognized.
Check Journal Numbers
This function provides a quick view of which journal numbers (per administration) are missing. Missing journal numbers can occur if invoices are deleted from the Coding section, for example, if duplicated. This insight is especially useful during audits.
Verification Report
This generates a report of all invoices to be coded with the status 'to be sent'. This report can be used to ensure all sendable invoices are allowed to be forwarded. If this is the case, you can select all these invoices at once by checking the 'Status' box.
CSV / Excel Export
These exports generate an overview of the (selected) invoices in the Coding section. If no selection is made, all invoices are exported.
Generate PDF
This export generates a PDF of the (selected) invoices in the Coding section.
Actions in the Row of the Coding Overview
Show PDF and Coding
This downloads a PDF of the PDF invoice combined with the current coding.
Definitive disapprove
This allows you to definitively disapprove the invoice, requiring an explanation for the disapprovement. Note that definitively disapproved invoices cannot be retrieved. Re-add the invoice if mistakenly disapproved.
Delete
This permanently removes the invoice. Be cautious: it may cause missing journal numbers in the sequence. Missing journal numbers will display in the 'Control journal Numbers' section. We recommend not deleting invoices, as they cannot be retrieved. Definitively disapprove invoices to make them unavailable for processing but findable in your archive, keeping your journal number sequence complete.
Reapply PDF/XML Recognition
If the relation/fields aren't recognized, reapply recognition for each invoice. This is useful when creditor details are added to improve recognition or an XML invoice field layout has been added or updated. Use the 'Reapply Recognition' button at the top of the coding overview for multiple invoices simultaneously.
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Coding invoices is just a small part of the order-to-payment process. Spend Cloud Purchase to Pay seamlessly integrates procurement, invoice processing, and contract management processes. This allows for touchless invoice processing without manual actions! Discover Spend Cloud Purchase to Pay to drastically reduce administrative tasks.
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