You’ve probably heard talk that Artificial Intelligence (AI) is the way of the future, and this prediction absolutely applies to the Accounts Payable (AP) world today.
Software with AI can understand tasks by producing its own rules that programmers can’t specify for it. It can also continue to learn and improve itself over time. It’s particularly helpful for identifying features in data and applying such features to new data, collecting information for contextual insights, analyzing large quantities of data, and automating time-consuming, repetitive tasks.
Accounts payable has long been an essential component of businesses, and expectations have only increased as the digital age has progressed. In most organizations, invoices come in no short supply. And manual invoice processing can often be very time-consuming, menial, and prone to human error.
If your organization is weighed down by your manual AP processing, you aren’t alone. According to an Ardent Partners survey about AP Departments’ Top Challenges:
- 39% of AP departments cite high invoice processing costs as their top challenge
- 21% identified long invoice approval cycles as their top challenge
- 39% reported that they are most challenged by a high percentage of errors.
Fortunately, this painstaking process can be revolutionized with data capture solutions that use AI, and an increasing number of business leaders are embracing this new technology. As technology has evolved, new solutions using AI can recognize any invoice you may have, regardless of format. This ability alone can empower your employees to focus on more value-added tasks for greater productivity across your AP department. Here are the top 5 ways that data capture solutions using AI can benefit AP departments.
1. Significant labor savings
If your organization is still manually processing invoices, you may already be familiar with all the high labor costs that can come with this method.
This process can involve mail opening and sorting, keying invoice data and general ledger information, and matching invoices and purchase orders and/or proof-of-delivery documents. It may also include physically routing invoices to approvers, responding to supplier inquiries, inputting invoice information into a record system. Additionally, if your organization handles paper, physical storage and retrieval may also be involved.
That’s a long list of tasks, right? Imagine a solution that can slash that list in half and even keep your staffing down. Fortunately, data capture solutions with AI have the power to do precisely that. These solutions accomplish these results by automatically classifying documents, extracting invoice data, matching invoices with purchase orders and/or proof-of-delivery documents, and posting and archiving approved invoices and data.
If the efficiency of AI wasn’t enough for you, the savings can really add up; according to Ardent Partners, best-in-class organizations can reduce their invoice processing costs by 82 percent compared to peers. This is an impressive accomplishment that is mostly thanks to using data capture automation to eliminate manual processes.
2. Increased staff productivity
Your AP department may be full of talent, but time-consuming manual processes can prevent it from fully unlocking that potential. Fortunately, another perk of using AI and data capture technology is that it can free up your employees’ time. This way, they can attend to more critical tasks.
When you automate your invoice processing with a data capture solution using AI, you can reduce menial, repetitive, and time-consuming tasks like manually entering invoice data and invoice matching. This, in turn, allows your AP workers to redirect their attention and talents to other tasks like analyzing data on operational performance, working capital and corporate spending, and to help in budgeting, planning, and forecasting.
This revolutionary benefit isn’t going unnoticed by leadership either. In fact, seventy-three percent of finance leaders believe that automation is improving their function’s efficiency and giving employees greater availability for value-added tasks, per the Oxford Economics study “How Finance Leadership Pays Off,” sponsored by SAP. Additionally, 55% of AP professionals reported that they would focus more time on business analysis and cash flow, and 52% stated that they would focus on reporting and improving the financial close process. Best-in-class finance organizations already spend 20 percent more time on data analysis than their peers, according to PwC.
With all the talent and expertise that is present in your AP department, it would be a shame to not use it to strategically benefit your organization.
3. Faster invoice approval
Data capture solutions that use AI streamline invoice processing, including the steps that would otherwise take the most time to complete manually. Such steps include uploading information on approved invoices to an ERP system, invoice data capture, matching invoices and purchase orders, and/or proof-of-delivery receipts, and invoice validation.
Instead of spending significant time on these manual steps, your staff can attend to more fulfilling and valuable tasks like working capital management, data analysis, and budgeting, forecasting, and planning.
In addition to eliminating time-consuming steps of invoice processing, this technology allows buyers to customize their workflows. By optimizing your workflows, you can leverage them to meet your organization’s unique needs for the best possible results.
Data capture solutions with artificial intelligence also accelerate the invoice approval process by allowing AP departments to manage higher volumes. These higher volumes may come from growth or acquisition and can be managed without the need to hire additional staff.
4. Fewer payment errors
Human error is an inevitable risk of manual invoice processing. It frequently arises in the form of miskeyed data and a lack of data validation. And all too often, the problem compounds even further when these errors aren’t noticed until late in the processing cycle and cause delayed approvals. All of this can be both frustrating and time-consuming. However, it can be mostly avoided through the implementation of data capture solutions that use AI.
But how can these solutions make invoice processing more accurate without human intervention, you may ask? The answer is simple. Early in the process, the solution validates your invoice data against information stored in the systems of record. It also captures invoice header and line-item data automatically. That’s the power of AI.
5. More early payment discount opportunities
Another benefit of using a data capture solution that incorporates AI is that by speeding up invoice processing, organizations can benefit from more early payment discounts. Additionally, it saves organizations money by allowing them to avoid late-payment penalties.
For example, organizations with automation like a data capture solution with AI can process invoices in less than half the time of average companies (3.7 days rather than 8.8 days) and in less than 1/3 of the time of laggards (3.7 days rather than 14.3 days), according to PayStream. And of course, with speed comes rewards in the form of discounts. This is significant because 80% of suppliers have discounts in exchange for faster payments. Additionally, the earlier you pay it, the larger the discount is.
You may be surprised to learn that most organizations capture less than 21% of all early-payment discount offers. Additionally, 12% of them can’t capture any early-payment discounts due to slow cycle times, according to IOFM.
Why Switch Now?
AI may seem like just another contemporary buzzword. But with the competitive advantage it can bring to organizations, it truly packs a punch. And it’s only going to become more important as we step into the future. In fact, 88% of businesses predict that AP processes will become primarily automated within the next 2-3 years.
With data capture solutions using AI, AP departments can save money, enhance productivity, speed up the invoice approval process, and reduce payment errors. It may even improve vendor relations, as organizations can deliver faster, more accurate services. Automate your invoice processing with a data capture solution using AI and see what increased productivity can do for your organization.