Digitizing Invoices: Everything You Need to Know About Digital Accounting

Accounting is an essential part of every business. Digitizing accounting allows you to use your time and resources much more efficiently and save money.

A core element of digital accounting is the digital processing and management of invoices. No more paperwork and overflowing filing cabinets, but clear and legally compliant archiving through automated processing. This brings order and efficiency to your accounting. Practical software tools for digitizing invoices can be flexibly adapted and expanded to suit your needs.

Why Scan and Digitize Documents At All?

Digital processing, management, and archiving of documents saves you time, money, and space. Feeding them into an appropriate system ensures that your documents are stored clearly and can be accessed at any time. Paper documents do not need to be kept thanks to legally compliant processing and archiving, making full filing cabinets a thing of the past. The risk of errors is significantly reduced, as all important data is read and stored by the system. This is a major advantage, especially when processing incoming invoices, as payment deadlines and terms (e.g., discounts) cannot be overlooked or forgotten. Read more about this in our article on “digital invoice approval”.

Paper documents, on the other hand, involve a tremendous amount of work. They have to be laboriously sorted and processed. At the end of the process, they have to be archived, which takes up a lot of space. In Germany, various documents have to be kept for ten years, and in Austria for seven years. The resulting mountain of paper and the storage space required pose a major challenge for many companies, which can be easily overcome with digital document management.

Digitizing Documents: What Needs to be Considered?

Digitizing documents has many advantages. To take full advantage of these, you must always ensure that you comply with the law. This means that at the end of the processing process, the documents must be archived digitally in such a way that the legal retention requirements are met and any paper documents that may exist are rendered obsolete.

In Germany, the retention period for electronic invoices is ten years, as stipulated by the GoBD. In Austria, invoices must be retained for seven years in accordance with the Federal Tax Code (BAO). In order to comply with the requirements of the respective regulations, electronically archived invoices must meet the following criteria: They must be stored in a complete, traceable, and unalterable manner. The data must be available and verifiable, and storage must be proper and secure. Our tool for digitizing documents meets all these criteria.

How The Digitizing of Documents Works

Digital document management involves several steps, from scanning to archiving. These steps are automated as much as possible, which minimizes personnel costs and the likelihood of errors.

Scanning documents: devices, formats, etc.

Paper documents must first be scanned. You can use a scanner or a mobile phone app for this. It doesn’t matter which device you use for scanning. However, make sure that the device has OCR, or optical character recognition. This technology enables full-text searches of scanned documents.

To ensure that the digitization of a document is legally compliant, a format must be chosen that makes subsequent changes impossible. PDF is particularly popular, but TIFF or JPEG files also comply with the regulations. Capturing data using OCR technology is the best way to filter information quickly and easily from this type of file.

Digitize Documents & Capture Them Automatically

Once the document is available in the appropriate format, it can be fed into a corresponding system. All data is extracted automatically and passed on in a structured form.

There are various solutions for capturing receipts. Depending on your personal preferences and the size of your company, you can work with an app, software, or a combination of both. When making your choice, look for intelligent document recognition and processing systems that can be seamlessly integrated into your accounting system. Intelligent programs work efficiently and save time and money. Practical additional functions such as electronic approval processes, availability on different devices, and integrated chat windows ensure smooth and fast workflows.

Our tool for automatic document recognition and digital approval comes with numerous features tailored to your company.

Manage Documents & Integrate Them Into Systems

If you have decided not to simply digitize and store documents, but to have all administration carried out by software, there are different ranges of these systems available. As a rule, all programs include the electronic capture, storage, and organization of various documents. You should take a closer look at the topics of access, approvals, folder structures, and indexing. There are significant differences here, and the optimal solution is based not least on your personal preferences.

It is also worth taking a second look at the topic of security. Secure and legally compliant storage requires encrypted archiving. To ensure that the documents are actually available in digital form for the entire mandatory retention period and cannot be lost, regular backups must also be performed.

Storing and securing documents

Both Germany and Austria have a legal obligation to retain original documents. These documents can be stored in digital form if they meet the following criteria:

• Completeness and legibility: Information must be complete and legible to humans.
• Immutability: Digital documents must be stored in a form that does not allow subsequent changes.
• Availability: Digital documents must be quickly retrievable at any time.
• Procedural documentation: Comprehensible procedural documentation must be stored together with the respective document.

The duration of the retention obligation varies from country to country. In Germany, electronic documents must be retained for ten years according to GoBD, and in Austria for seven years according to BAO. The tax authorities can audit your accounting at any time, but with digital document management, you are prepared for this.

Scan and Digitize Documents with free-com

Our practical solution enables smooth digitization of your document management. The AI-supported solution can read various types of documents and information and save them for further processing. Whether personnel files, order confirmations, delivery notes, timesheets, or invoices, the software recognizes and processes any type of document quickly and efficiently. After being fed into our software, the data is automatically processed so that it can be further processed in the ideal way. The individual steps, from scanning and processing to storage, can be flexibly configured and adapted to the needs and requirements of your company. The user-friendly program can be seamlessly integrated into your accounting system and brings efficiency to your internal processes.

Conclusion: Why You Should Digitize Your Documents

Digital document management helps your business move forward. You save time, money, and effort. You reduce the likelihood of errors and ensure compliance with legal requirements. You also increase the efficiency of your accounting department and ensure greater transparency and flexibility within your company.

For decades, accounting was considered a dusty job involving processing pages upon pages of paper documents. The digitization of document management means modernity and intelligent processes. Don’t waste any more time on tasks that software can handle faster and more clearly.