Impacting Touchless Accounts Payable with APOC
While there are multiple dimensions to the Accounts Payable (AP) process, we are focusing on how companies are responding to the need for improved efficiencies and reduction of manual effort in AP.
“Straight through Pass” (STP) and “Touchless Processing” continue to be the widely accepted operational metrics for automation in the AP world. Both have had a significant influence in realizing the ultimate business outcome of “Payment on Time” (POT). Companies tend to often work with a myriad of platforms, ERPs, and automation aids, such as robotics, in the process of improving the effectiveness of the STP processes, with varying degrees of success.
But still, what prevents companies from achieving the mythical STP?
Based on our experience of working with over 100 customers, the following are the 4 categories of inefficiencies:
- Lack of digitization at the core, leading to manual interventions
- System fragmentation and lack of integration
- Onerous approval processes
- Upstream issues leading to downstream inefficiencies
Ironing the creases with our Next Generation APOC platform
The Infosys APOC (Accounts Payable on the Cloud) is a Cloud-hosted AP platform that allows customers to consume the entire AP process as a service, with flexible “pay-as-you-pay” commercial models. APOC is an enterprise-wide system of transactional engagement for AP. This gives our customers the option of adopting a next-generation platform without having to rip and replace the legacy technology infrastructure.
Digitization at the CoreManual processes abound in a traditional AP process. APOC platform leverages the best of the digital capabilities available to automate the most frequently used manual interventions. We have highlighted some of them below.
Intelligent Document ExtractionTthe intelligent optical character recognition (I_OCR) capability of the platform, combined with an augmented digitalization work desk has been instrumental in digitizing paper invoices with over 95% accuracy at both header and line levels. This data conversion aided by Machine Learning (ML) has replaced effort-intensive data entry and indexing processes, consequently yielding significant efficiencies for our customers and associates.
Smart MatchingOne of the many activities that require a human in the loop is the onerous invoicing and receipt process. The ML-based shadow matching algorithm of the APOC platform is helping our customers ease the burden in this highly effort-intensive juncture with autonomous match and post. Automating this way has reduced up to 90% of the manual effort for customer companies.
Tax Coding and Withholding Tax DeterminationTraditionally, in areas such as Sales and Use Tax or other taxes such as withholding tax, there is a need to rely on human expertise to determine applicability during the AP process, or later. With targeted training of our AI model on top of the APOC platform, we have been able to determine applicability, and also recommend or present a predictive recommendation to people resources, thereby reducing the need for 100% manual review.
Language NeutralizationEffective and accurate translation of language invoices with our APIs and industry-leading translation Clouds have resulted in a better location strategy for customers.
Connected Eco-SystemsOur philosophy, while designing the platform, was to be able to build on the available network-based efficiencies of e-invoicing without the typical onboarding challenges. Our vision for APOC is a network-of-network model with native integrations to leading e-invoicing platforms. This has enabled suppliers on some of these networks to transact with APOC buyers from day one. This helps make transfers from system to system with zero touchpoints in between. Companies are seeing a 30-50% reduction in data entry efforts with this switch.
System Fragmentation and Integration
Onerous Approval Processes
Upstream Programs to Support Smooth downstream AP
Three out of four customers use more than one instance of an ERP. In addition to this, there are complex procurement platforms mounted on it. Eventually, the problem of master data inaccuracies is compounded by the challenges of integrating all parts of the overall systems – traditional and digital. The number of processes multiplies further with various locations and gamut of systems, aggravating the problem of data and process heterogeneity.
The APOC platform is designed precisely with an understanding of this reality. Our native out-of-the-box integrations with leading ERPSs and procurement systems (direct integrations and with leading middleware solutions) help customers use the platform as a single layer of engagement across multiple underlying systems for AP.
Approval systems are a strong safeguard against process slip-ups, especially in a non-PO invoice scenario. While companies leverage several policies to enforce purchase orders, we still see non-POs as a small, but significant, part of the overall AP volumes. A typical non-PO invoice takes about 30% longer to process and requires business context to be able to code the appropriate codes, resulting in a high-touch process.
APOC solves this with an inbuilt model that learns from historical coding patterns and proposes the most relevant codes. This not only brings in higher code accuracy but also reduces approval timelines.
While intelligent automation in the APOC platform reduces human intervention in the loop significantly, upstream, or inter-departmental issues could still play truant. A slew of solutions, both on the platform and through holistic domain improvements, such as Unified Support Desks, price approval councils etc., are helping customers solve this issue.
The “pro-active nudge” function of the APOC platform is helping customers with this obscure problem as well. By automatically reminding users of the need to approve with an information-rich decision report, customers are now equipped to accurately visualize the impact of non-approval. The platform has also effectively helped customers extend their ability to re-validate their open GR- R with analytical reports indicating the probability of invoices received to open GRs.
In short, the APOC platform has demonstrated strong capabilities in reducing traditional human effort in legacy invoice processing by as much as 50%, and even higher in several cases.
Foundational shifts in how technology is adopted across finance, in general, are bound to happen in AP as well. Distributed ledger technology, such as blockchain, will be the next disruptive integration in the supply chain universe. We continue to learn from our AP experience and from constantly emerging tech shifts, to marry both to automate more effectively.
Watch this space for more…...