The accounts payable (AP) process is the backbone of any organization having a direct impact on cash flow optimization, fraud prevention, and vendor relationships. With the advancements in automation technologies, accounts payable has become a major area of focus for process improvement in small to mid-sized organizations. Technologies such as robotic process automation (RPA) and artificial intelligence (AI) are gaining attention for their ability to automate manual, time-intensive tasks that obstruct the overall efficiency of the accounts payable processes.
The manual AP process remains quite tedious, labor-intensive, and time-consuming. Many organizations still rely on high human involvement and paper invoices to process payments.
Today, there are two big challenges that companies face in their efforts to streamline the manual accounts payable process: manual data entry and routing of invoices for approval.
It takes between 4.1 and 16.3 days for companies to process an invoice from receipt through payment approval, according to a research by technology services company Aberdeen Group.
A study by Canon Business Process Services suggests that more than half of all invoice processing requires at least 76% manual input.
Accounts payable teams rely on business units, procurement, and suppliers to capture information and process invoices for payment. Finance leaders have mostly relied on ERPs and reporting tools to carry out their daily activities, but now is the time to improve process efficiency through automation.
Look for labor-intensive activities that require accessing multiple systems, are repetitive, or can be audited for compliance periodically to use RPA-enabled automation.
Invoices that companies receive from their different suppliers vary in formats: paper invoices, word documents, PDF attachments via email, or fax. Moreover, the invoice data is not always in a structured format. Many times, they are semi-structured or unstructured. RPA bots alone cannot handle these different data types, in the same way, each time. This is where artificial intelligence can help in accounts payable. AI-based machine learning models are used to train these bots to effectively interpret and extract data with higher accuracy eliminating human involvement for a variety of invoice formats.
RPA Bots seamlessly interact with a range of applications and systems, including ERP or any accounting system to feed the extracted data. By automating the invoice data entry process, you can not only expedite the AP approval process but can also minimize the risk of human errors and the cost associated with it.
The matching of invoices against purchase orders (POs) is called a two-way match and when matched against POs and goods receipts both, it is called a three-way match. This process involves comparing invoices line-item-by-line-item against these essential documents to reconcile errors such as discrepancies in purchase amount or vendor contact information. The manual PO matching process is a highly time-consuming and burdensome activity for accounts payable staff.
RPA Bots can automate most of this manual matching thus reducing the amount of oversight required, and exception handling. This means that employees can focus on more critical finance responsibilities, such as budgeting and planning.
Automating the invoice/AP approval process along with PO matching significantly eliminates the need for human intervention. Invoices can be automatically routed to the appropriate approver once matched effectively. Automated follow-ups can be triggered to remind them of upcoming deadlines.
Nividous helps businesses streamline their AP processes with a holistic automation approach. The Nividous platform natively includes RPA and AI, allowing you to automate more tasks with enhanced process efficiency. Machine learning models are built-in to process a range of structured and unstructured documents with the ability for humans to annotate feedback on the fly. Check this on-demand webinar on intelligent invoice automation to learn more about the platform’s capabilities and use cases.
The natively embedded business process management (BPM) component included in the platform can help in streamlining end-to-end accounts payable workflow for complete automation. You also get
Consider the success story of CNM LLP using the Nividous platform for accounts payable automation.
Accounts Payable Process Automation Success Story of CNM LLP, A Leading Financial Advisory Firm.
CNM LLP hires resources on hourly rates who work on multiple projects to offer accounting services to their end-customers. Ensuring that the proper rate was used for a given resource, in a given role for the customer required a manual comparison of timesheets to engagement letters prior to the creation of the invoice.
This manual process was automated using Nividous RPA Bots that are scheduled to fetch and compare semi-structured and tabular data from letters against timesheets using intelligent OCR capabilities. The Bots create any missing rates in the invoicing system and flag any discrepancies in a report sent to the stakeholders. The Bots complete the data extraction and entry tasks for hundreds of records in just a couple of hours without any human intervention.
If you are interested to learn more about this use case of accounts payable automation, watch our on-demand webinar jointly organized with CNM LLP.
Automation technologies can radically improve AP processes; driving speed, accuracy, and cost optimization. Today, organizations are willing to invest in proven technologies to drive better outcomes with low implementation risk. If you are looking for a vendor that can offer an effective accounts payable automation solution, get in touch with the Nividous team. Request a demo or write to us at [email protected]