How machine learning is transforming accounts payable
Traditionally, Accounts Payable (AP) processes have involved significant human interaction, such as manual entry of invoices, approvals and payment processing. These lead to higher possibilities of errors, and poor productivity, apart from having a direct impact on the bottom line. A typical AP process involves a minimum of four to five stakeholders who have to work cohesively. Invoice processing involves several challenges in terms of time, cost and accurate extraction of data from several different semi-structured formats. Businesses have realised the importance of automating AP, which has led to significant benefits such as improved cash flow, better visibility into financial processes and reconciliations, as well as efficient resource utilisation. Reducing the manual touchpoints also leads to significant savings in terms of time and cost.
While static automation solutions in AP have led to streamlined workflows and efficient processing, they fall short in the face of surging invoice volumes and multiple channels due to the inability to perform precise invoice-matching, handling exceptions and approvals for multi-tier invoices. Static automation of AP becomes limited for dynamic business environments and processes, and the current economic climate is all about the changing face of business across industries. Dynamic businesses can realise significant benefits by employing intelligent automation in AP. By leveraging emerging technologies such as Machine Learning (ML) and Artificial Intelligence (AI) in AP, businesses can create efficient and scalable self-learning solutions that require minimal human intervention.
The benefits of AI & ML in Accounts Payable
Leveraging emerging technologies such as AI and ML can prove to be a game changer in the Accounts Payable function. Unlike plain-vanilla automation, ML in AP upgrades the solution offering to one that can “learn” about your business, and constantly updates itself to optimise the process. Over time, this can lead to scalable and automated intelligent AP solutions. A great benefit is the reduction of the cost of processing per invoice, which results in significant savings for companies.
AI & ML enable intelligent automation workflow in AP
While Robotic Process Automation(RPA) bots are used to capture structured and semi-structured data for AP, AI and ML solutions for AP can train the bots for accurate data extraction when there are multiple invoice formats. An intelligent automation workflow that can automatically extract information from supplier invoices in varied formats, and match these with purchase orders in the ERP, with almost no manual intervention, would result in efficient cost reduction and a significant saving of time. Similarly, information can be accurately extracted from quotation requests and converted into predefined formats that can be stored in the ERP, and pushed automatically into the workflow. Purchase order processing is another area where intelligent automation can come into play. By scanning physical purchase orders to extract relevant item details, automatic matching can be done against available items in the catalogs, and this information can further feed into sales order processing. Intelligent automation supports a dynamic business environment, where there are multiple invoice formats that change often, and varied purchase order formats. An automated approvals workflow greatly reduces manual intervention and speeds up the response time.
Fraud detection with intelligent AP solutions
The Accounts Payable department is vulnerable to fraud and malicious attacks, where several factors come into play. Employees or fake companies can easily pose as vendors, resulting in fraudulent transactions and billing. Middlemen can work in collusion with employees to cheat the company of payments, and not provide the goods. Vendors can overbill by adding new line items in the invoice. AI and ML-based AP solutions can help with AP fraud mitigation. With automated invoice reviews, reconciliation between invoice line items and purchase orders can be done in minutes, saving hours of intensive manual labour. Intelligent systems can also sound alerts if there is any suspicious behaviour by employees, and match vendors to the database by using fuzzy matching technology.
AI & ML enable audit trailing and accurate forecasting in AP
Automated approvals and digital solutions alert users of the system and also leave digital trails that can be audited later to check for any fraudulent behaviour. ML and AI-powered AP solutions can also check for duplicates easily, flagging off any misspelt data, duplicate data and on. These intelligent solutions can analyse the balance sheet and payment cycles so that the enterprise can make accurate forecasts and plan its finances.
Every business is unique, and intelligent AP solutions need to be chosen and deployed based on business needs. First and foremost, enterprises need to decide on the extent of automation they want. Key considerations include backend integrations with existing systems, the extent of automation that you require, real-time visibility and the support offered by the partner or vendor. Organisations must also have a change management strategy in place and include both technical and cultural training of employees as part of the transformation. The hyper-automation of Accounts Payable processes with AI, ML, RPA and Business Process Management (BPM)* working in tandem will lead to sustained AP success.
*For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.