In a world where time is money, it’s becoming less and less acceptable for AP processes to consume minutes more than they’re worth. In the new age of digital, payment processes must move ahead of the times if they’re to remain competitive.
This viewpoint is shared by Judd Marcello, EVP & CMO at Conexiom. Judd has more than 25 years of B2C and B2B marketing leadership experience throughout the United Kingdom, Americas, Australian and European markets. Judd leads all facets of marketing for Conexiom.
In this guest post for The Fintech Times, Judd analyses the current capabilities of accounts payable processes, and discusses how the use of artificial intelligence could streamline such capabilities.
When it can take companies using minimal automation up to 16.3 days to process just one invoice, “slow and steady” doesn’t win the race. Organisations who choose not to automate accounts payable (AP) risk their relationships with suppliers.
While invoice processing is time-consuming and admin-heavy, many AP departments are stuck in an outdated paradigm that’s costing them money. In fact, the top 25% of 1,485 organisations studied by the American Productivity & Quality Centre spend an average of $2.07 processing each invoice — the lowest 25% spend nearly $10.
There’s a solution to that stagnancy.
Businesses must take advantage of the digital revolution, which includes AI-driven technology designed to automate AP processes. Automating enables companies to increase efficiency, accuracy and:
- Reduce the cost of invoice processing.
- Capture early payment cost savings.
- Optimise payment timing.
- Manage supplier relationships and address rising demands.
- Increase working capital.
- Reduce double- and overpayment errors.
Businesses who opt to find an AP automation solution will come out ahead. The Institute of Finance and Management found companies using a high level of automation spend about $1.77 to process an invoice. And a Goldman Sachs report estimated AP automation drives up to 70 – 80% savings for AP personnel.
Additionally, today’s B2B buyers expect the ease and speed of a B2C experience. Automating workflows and document processing to remove human error and increase data accuracy delivers on that expectation.
Putting AI Into AP
AP automation uses technology to eliminate manual tasks, provide better visibility and offer more control over critical financial information. It uses AI to:
- Extract, translate and deliver complex, unstructured data into structured systems without human intervention and with 100% accuracy.
- Define data validation, logic, lookups, and rules to handle unique commercial terms present in B2B relationships.
- Resolve exceptions quickly with real-time alerts and exception workflows.
- Reduce processing times.
- Help companies balance cash flows according to historical data analysis.
Using machine learning (ML) and AI, AP automation learns how your company runs its accounting processes. It accelerates data entry by assigning general ledger codes. It identifies possible fraud risks by recognising patterns. It flags the correct people to address possible issues by learning who’s involved in the AP approval process. It can bundle invoices with contracts and send credit notes or payment reminders.
With help from ML, IPA and IDP can use business rules to:
- Identify and extract data from or input data into specific documents.
- Link data for exceptions resolution.
- Route documents to the correct people for exception handling or validation.
Future-Proofing AP Automation
In elevating the levels of automation and accuracy, AI has the power to transform AP processes. ML and AI drive data organisation and standardisation, helping finance leaders discover trends and discrepancies within vendor networks, for example. AP departments and finance teams already rely on robust analytics, coupled with AI, to make informed decisions about lending, investments, and cash management.
Automating repetitive, tedious AP processes not only makes employees’ lives easier but also optimises finance processing efficiency. Automating AP workflows provides full visibility into payment timing, providing real-time access to suppliers, vendors, and other stakeholders.
AI Can Do It
Automating AP processes like approvals, duplicate and fraud detection, e-invoicing, invoice capture/extraction, and matching and supplier query management saves companies time and money. AI-driven systems give 360° visibility into spend, drive efficiencies, assist with compliance and risk reduction, and strengthen stakeholder relationships.
Shelve the Classics and Embrace the Future
AP automation costs significantly less than traditional, legacy systems. Outdated AP processes rely on inefficiencies that strain company resources like personnel and budget. Businesses opting for intelligently automated AP processing see great ROI like cost savings, reduced invoice-processing times, improved stakeholder relationships, better risk reduction, and compliance.
