In modern business operations efficiency and precision are essential for any accounts payable process. This means invoice processing included.
Companies are replacing days of manual labour and protracted approval cycles by highly efficient automated systems. These systems handle invoice processing with speed and accuracy that is far beyond human capabilities. That’s why these systems are quickly becoming the cornerstone of the AP department.
However, not all systems are equal. A key ingredient that every automated system must have for it to perform at its best is present.
What is Automated AP Invoice Processing?
Automated AP invoice processing is an innovative approach that leverages cutting-edge software to navigate invoice handling.
It can seamlessly scan, understand, and upload your chosen invoice data straight into your Enterprise Resource Planning (ERP) solution. The tool’s core function lies in expediting the approval process for invoices. At the same time, it should be safeguarding against errors and the escalating costs of traditional manual methods.
In contrast, manual invoice methods require a multi-step process. This process starts with your AP department cross-referencing invoices with corresponding purchase orders. Approval managers then take charge of double-checking invoice amounts, line items, and more to ensure accurate payments.
In a small company, this may be a simple process. However, as you start spending more with certain suppliers, it becomes a convoluted process. It may require multiple approvals which can span several hours for a single invoice.
Even with these stringent processes, it’s common for errors to occur. Sometimes, double payments and fraud occur because the human brain is not up to this kind of work.
However, computers and software excel at tasks such as:
- Matching invoices with corresponding purchase orders.
- Quickly resolving discrepancies like mismatched PO numbers and line items.
- Instant approval routing for high-value invoices.
- Providing real-time updates to your company's ERP system.
- Automatic payments to ensure timely payments.
Furthermore, the capabilities of automated invoice processors extend beyond conventional channels. They can accommodate batch invoice uploads or import invoices directly from cloud storage or even email providers. This expedites the process even further.
What Makes AI the Key Ingredient in Every Automated Invoice Processing System
Without AI, the level of AP automation and the accuracy of a solution’s processes suffer.
Firstly, you’d have to create separate rules for every different invoice format to ensure accurate data extractions. Secondly, automated PO and invoice matching will likely do more harm than good because of exceptions. Not to mention the fact that you would have to create entirely new rules.
AI is the key ingredient in automated invoice processors because it enables:
- Vendor Management and Relationship Building: AI can help with evaluating vendor data. It can look into past payment history, responsiveness, and satisfaction levels – to spotlight and prioritise key relationships.
- Invoice Verification and Validation: Deploying AI algorithms for this task allows advanced validation checks. This ensures supplier invoices align seamlessly with purchase orders and contractual commitments.
- Exception Handling and Discrepancy Resolution: With AI, you can fine-tune systems to detect discrepancies or anomalies in invoices. Consequently, it can trigger automated workflows to fix them.
- Integration with ERP Systems and Workflow Automation: Integrating AI with existing ERP systems improves efficiency and data accuracy. An superb AI solution can automatically push this data without human intervention. This allows for analyzing in real-time, tracking cash flow, and simplifying workflows.
The difference between a good and a great automated invoicing system is its AI’s capacity to learn and meet specific business needs.
Benefits of Having a Stellar Invoice Processing System
Leveraging the power of AI for your invoice capture offers many benefits for your accounting system and your company. Better efficiency and accuracy are just some of them.
Some of the main ones include:
Cost Savings and Resource Enhancement
AI-powered automated invoice processing can take care of many of the previously manual AP department tasks. This leaves you with an opportunity to significantly improve your resource efficiency.
Processing automation leads to reduction in labour needs and yields immediate cost savings. It also empowers highly skilled employees to focus on more tasks that require their specific expertise.
The result is a reduction in expenses and errors by up to 85%. This results in heightened productivity and faster growth.
Furthermore, AI enables you to mitigate the risks associated with human errors which may trigger financial inconsistencies, vendor dissatisfaction, or compliance issues. Through the precision of deep learning algorithms, it is easy to find such errors. Automated processes then rectify them or escalate the matter to the relevant manager.
More Accurate and Efficient Payments
Without AI, AP invoice processes are slow and protracted since humans can only read, type, and think at a certain speed.
However, automated AI systems can batch process invoices, significantly reducing unnecessary back-and-forth and improving efficiency. Additionally, AI can validate data extractions much faster and more accurate than a human can. These benefits of automated invoice processing solutions apply to handling paper or electronic invoices alike.
All this results in faster and more accurate payments, improving your cash flow and keeping your vendors happy. It allows you to speed up invoice approval when necessary to capitalise on incentives such as early payment discounts, and more.
Enhanced Decision Making
Besides the direct benefits of accuracy, efficiency, and cost savings, AI automation results in better decision-making.
Since AI is more accurate and efficient, it means you’ll have access to real-time financial insights. Your will be able to make business choices relying on more accurate insights and data.
Furthermore, you can integrate the invoice data into an ERP. That will provide you with everything you need to know about the company’s financial standing. Once there, you can use the data within dashboards or generate reports for easily digestible insights.
Better Document Management
With a paper invoices or manual invoice process, storage and document handling becomes a pain.
You have to create a strong SOP for sorting and categorising documents from day one. Moreover, you have to train each of your staff on the same processes which is time-consuming on its own. Even the best systems still make it challenging and time-consuming to find a particular invoice or purchase order.
In contrast, AI automation solutions will sort and categorise documents in seconds. They will allow you to easily search for invoices by using keywords – just like you do with Google.
Who Should Integrate AI Into Their Invoice Automation Software?
Anyone seeking enhanced efficiency, accuracy, and strategic agility needs automated invoice processing software. This includes start-ups, a mid-sized enterprises, or a large corporations alike.
Start-ups, often constrained by limited resources, can leverage AI to optimise operations from the outset. This saves resources and makes it easier to focus on growth rather than menial tasks.
Mid-sized businesses can enhance their competitive edge. Benefiting from AI's cost-saving potential and its ability to drive effective decision-making can be just the thing.
For large corporations with intricate financial ecosystems, the integration of AI brings heightened control, accuracy, and scalability – essential ingredients for navigating complex operations.
Furthermore, industries spanning from finance and healthcare to retail, manufacturing, and beyond, can benefit from AI-driven invoice processing. AI is a precious ally when there's the need for precision, speed, and flexibility.
Is AI the missing ingredient in your automated invoice processing system? Then Affinda’s AI-powered Invoice Extractor is what you need.
Our AI invoice processing system enables you to cut processing time by as much as 80%. Try Affinda today with a free trial. Discover for yourself why AI is a crucial technology for your AP department.