Artificial intelligence for accounts payable: All you need to know
Accounts payable has been impacted by AI in recent times. Over the last decade, there have been significant advancements made across finance and procurement processes. Particularly in accounts payable, there has been a considerable push to automate manual and tactical tasks. The push is resulting in focus and consequent process improvement projects in global enterprises.
Change in strategic outlook for accounts payable
The new competitive landscape is shaping up to put AP at the forefront of driving growth and to become a source of strategic foresight. This contrasts with AP’s old traditional connotations, streamline and automate accounts payable processes, providing better visibility and control over critical financial data.
Through the multiple advancements made with process-level improvement, organizations can eliminate manual aspects of accounts payable instead of automating them. The primary goal here is to move faster, reduce errors, and help the company scale quickly.
However, the next wave of improvement focuses on making AP an autonomous function by leveraging A.I. technologies. To drive additional tangible and strategic value, current operational automation needs to be augmented to cognitive automation.
Evolution of Accounts Payable automation
Technologies like RPA and OCR have long been in use by AP departments across companies. Many of these technologies are deployed to compliment manual AP tasks and are usually branded as “AP Automation.”
However, with the changing nature of global businesses, these technologies have become a passé. The next-generation Artificial Intelligence aims to deploy cognitive automation and reduce manual intervention.
Traditional RPA and OCR based technologies: The focus here is on automating repetitive and labor-intensive tasks. AP organizations aim to save FTE costs and improve compliance through fixed approvals and review work-flows.
A.I. based Automation: Focused on making AP autonomous and achieving continuous output/ process improvement. Artificial Intelligence and Machine Learning models have driven AP processes to reduce manual dependence for task execution and validation- significantly reducing FTE costs. Organizations can genuinely unlock additional savings through self-learning- process improvements, early payment discounts, and spend under management.
Let A.I. do it
Accounts Payable processes that can be improved through A.I are e-invoicing, invoice validation (matching), approvals and work-flow, invoice capture and extraction, supplier query management, fraud, and duplicate detection.
Four reasons why you need to invest in AP automation
1) Cost-cutting and additional Savings:
Identification and streamlining operations to cut costs and unlocking additional savings remain the cornerstone of AP function. Organizations can redeploy FTE and improve cost-saving up-to 60–75% while reducing cost per invoice processed up-to 60%.
2) Saves time and improves accuracy:
The nature of manual AP tasks is such that they are susceptible to errors resulting in occasional breakdowns, additional checks, slower TAT, and scaling problems. However, organizations can double efficiency and productivity per FTE and reduce invoice processing time up to 65%.
All this is using A.I. systems and self-learning engines. We can achieve an exceptional level of accuracy across AP from invoice processing to invoicing validation.
3) Better supplier relations:
Improving supplier relationships is key to reducing cost, supply chain volatility, and better discounts. Therefore, organizations need to ensure prompt grievance redressal and proper correspondence. However, one can streamline and automate augmenting current technologies with A.I. technologies and external stakeholder collaboration
4) Compliance and risk reduction:
AP organizations need robust internal controls and proper programs to ensure each transaction processed is as per rules and policies. A.I. systems can ensure 100% visibility into spend and lay down a structured approval hierarchy, audit trail, and 3-way matching.
A.I. driven systems can also reduce all non-compliance related risks. Hence, it is essential to focus on mitigating potential fraud with a system that flags any inconsistency.
Early adopters have actively deployed the next wave of artificial intelligence and neural networks-based technologies, and it has become a source of competitive edge.
Therefore, accounts payable can come to the forefront and become the primary driver of value through Artificial Intelligence advancements. Also, a utonomous AP helps leverage strategic foresight, actionable insights, and cost reduction to generate bottom-line savings.
To know more about how A.I. based solutions can create autonomous AP functions, enabling smart predictions and generate intelligent insights that drive direct strategic value across organizations- Reach out to us at Product.marketing@zycus.com or visit our page at https://www.zycus.com .
(Source 1 & 2: 2019 Purchase to Pay (P2P) Performance Study Results, The Hackett Group)
