Why are businesses still relying on spreadsheets to manage essential operations and critical data? Especially when you consider that 42 per cent of finance teams report a high ratio of late payments related to a reliance on spreadsheets?
More so, why are businesses still reliant on multiple segregated products — whether it be spreadsheets, email, PDFs, or other disparate systems? Time and money are valuable resources, so modern businesses must remove the dependence on these outdated technologies and work to automate key functions. One area where this can provide a huge boost is Accounts Payable (AP).
In fact, here are four technologies Chief Information Officers can leverage to effectively eliminate tedious manual processes in AP that will decrease the likelihood of mistakes, decrease turnaround times, and boost efficiency along the way.
1. Optical Character Recognition (OCR)
Even the most diligent manual AP processes are subject to human error. But with OCR, the risk of error is greatly reduced because it automatically converts, encodes, and extracts data from incoming invoices to optimize the receipt, processing, and entry of AP data. Paired with an integrated, next-gen approach to data and analytics, an automated AP solution with OCR capabilities can make a meaningful impact on the overall bottom line.
2. Machine Learning (ML)
An efficient automated AP solution should feature this key tool designed to boost effectiveness: ML technology. Interacting with business management software (i.e. enterprise resource planning, customer relationship management, etc.), ML uses advanced algorithms to recognize patterns and discrepancies found within AP documents. Additionally, ML is a second line of defence in safeguarding data accuracy and in ensuring no steps in the AP process are overlooked.
3. Preliminary Data Validation
After gathering and analyzing relevant information via OCR and ML tools, a modern automated AP solution should be able to automatically validate the resulting data using original invoices and/or credit memos to find any discrepancies. Depending on the document type, there are two methods of preliminary data validation:
- If the invoice is PO-based, the solution performs a three-way check, spanning the PO itself, the goods receipt, and the invoice. If it passes validation, it is formally approved without the need for human involvement.
- If the invoice is not PO-based, it undergoes a standard preliminary data check. This includes checking for duplicate scans and missing PO’s, as well as performing a master data check, among other tasks.
4. Conversational AI
Another useful tool is conversational AI. The natural language processing service not only provides an interactive FAQ for users, but also offers answers to project-specific questions. These could include “What step am I currently on in the AP process?” or “Has any document or approval phase been rejected?” With conversational AI, AP departments can easily monitor ongoing activity, which enables more seamless completion of tasks and more streamlined workflows overall.
Unlocking the deeper value of an automated AP solution
These four functions are vital to an effective automated AP solution. They start the conversation around reducing manual impacts on timeliness, complexity and overall productivity. Even more so, it will decrease the reliance on outdated, disparate systems.
Most importantly, AP improvements give more time for IT leaders to focus on strategic initiatives with deeper business value that will enhance the company’s abilities around digital enablement, improve the employee experience, and help manage potential environmental, social and governance innovations. While big ideas like “transformation” are important, many of the best CIO conversations start in a much simpler place — around information technology.