APOC

How AI in Accounts Payable Is Transforming AP Automation to Achieve Best-in-Class Results

Timely payment is not just about ticking boxes and avoiding late fees. It is a strategic investment in business health. Here is why:

1. It builds trust and strengthens relationships with vendors, fostering greater collaboration and responsiveness.
2. It ensures a smooth supply chain, preventing stockouts and delays that can cripple operations.
3. It establishes you as a reliable partner, earning you potential perks like early access to new products, discounts or extended credit terms.
4. It reduces internal inefficiencies and administrative costs.

Therefore, managing financial obligations is crucial. This is where accounts payable (AP) comes in. It is a critical back-office function that manages the procure-to-pay cycle, in particular, the money owed to creditors and suppliers for goods and services received. It shows up under debts on a company's financial report.

Nestled within the finance & accounting (F&A) and supply chain functions, AP greases the wheels of your entire supply chain operation, ensuring harmonious financial flow and happy suppliers.

While paying out vendors might seem effortless, a hidden complexity lies beneath every seemingly smooth payment. It involves a meticulous multi-step process outlined below:

1. Invoice receipt: Details the goods/services you bought.
2. Verification: Verifies details and ensures goods/services received match.
3. Recording in the system: Updates accounting system with the cost.
4. Tracking: Tracks payment terms to keep on top of deadlines.
5. Payment processing: Chooses the payment method (check, EFT, etc.).
6. Payment approval: Ensures vendor details are accurate before finalising.
7. Payment execution: Transfers funds or mails cheques on time.
8. Reconciliation: Confirms payment amount and updates vendor records.
9. Record closure: Marks invoice as paid and updates the system.
10. Reporting: Learns from the process to improve cash flow and reporting.

AI in Accounts Payable

The AP process entails coordinating multiple steps and departments, often burdened by repetitive and time-consuming tasks like data entry, verification and tracking. Manual execution of these tasks is prone to errors and diminishes productivity. However, the silver lining is that these tasks are ideal candidates for automation.

Artificial intelligence (AI), touted as the solution for streamlining mundane and repetitive tasks, offers substantial contributions to AP process automation.  Here's how:

• Improved invoice coding and general ledger (GL) account mapping

GL code assignment sometimes feels like trying to fit square pegs into round holes. A single expense might require multiple codes depending on its intricacies and often involves collaborating with various teams and the CFO. Another layer of complexity is that some situations do not have clear-cut classifications, and the line between, say, a contractor and sales invoice can blur.

AI-powered large language models (LLMs) are a big help here. They not just suggest a GL code, but offer multiple relevant options based on their understanding of the invoice content. This not only saves you time, but also reduces the risk of errors and miscategorisation. The best part? LLM-based invoice coding can be continuously trained and improved.

• Enhanced data capture and extraction

AI can automatically extract invoice data with superior accuracy, even from unstructured formats, like scans or PDFs. This eliminates manual data entry, saves time and minimises errors.

• Intelligent invoice processing

AI in accounts payable can analyse data points like purchase orders, contracts and vendor history to automate invoice validation, identify discrepancies and flag potential fraud. AI can also help you detect duplicate payments caused due to duplicate invoices, or plain human oversight, saving you up to 2% of your spending - as per industry experts. This translates to streamlined approvals, faster payments and peace of mind knowing your finances are protected by an intelligent shield.

• Smarter payment processing

AI algorithms can optimise payment schedules based on factors like early payment discounts, cash flow and vendor relationships. This helps leverage financial resources strategically and maximise savings.

• Improved vendor management

AI can analyse historical data and predict vendor behaviour, optimising communication and payment terms. This fosters stronger relationships and facilitates proactive collaboration.

• Advanced reporting and analytics

AI-powered tools generate insightful reports and identify trends in AP data. This allows for data-driven decision-making, improved cash flow management and enhanced financial compliance.

So, AI-powered AP automation helps companies reduce processing times, slash costs, improve accuracy, minimise human error, streamline AP operations and strengthen vendor relationships. No wonder the market for AI in AP is surging, with experts like Gartner predicting it will reach a staggering $1.9 billion by 2025.




The future of accounts payable

The explosive growth of AI in AP signals a clear shift: businesses are embracing technology to provide best-in-class AP automation services to streamline and optimise their financial processes. This enables them to stay ahead of the curve and unlock new levels of performance.




How can Infosys BPM help?

Look no further to address your invoice processing woes. Infosys BPM's Accounts Payable on Cloud (APOC) SaaS platform leverages AI for Accounts Payable Process Automation and helps you future-proof your AP process.




Optimize Your Accounts Payable with Our Cloud-based Solutions >>