Finance and Accounting
Leveraging artificial intelligence and automation for enhanced source-to-pay services
According to a study, high-performing businesses are 18x more likely to use AI capabilities in their source-to-pay process compared to their peers. CPOs face uncertain operating environments, inflation, supply chain pressure, complex risk exposure, and the mandate to implement sustainable business practices.
AI within the procurement-to-pay process provides better spend visibility, resource optimisation, and improved compliance. From contract management to compliance, AI plays a crucial role in enhancing the procurement-to-pay process.
This article discusses the use cases and benefits of automation and AI for procurement.
Leveraging AI and automation for future-ready procurement
Procurement professionals are leveraging AI technology to optimise decision-making and drive strategic value. From saving costs to driving compliance, AI and automation are unlocking new avenues and enhancing collaborations in procurement. Let’s discuss a few steps on leveraging AI for future-ready procurement.
Cost savings
Optimise the vendor selection and procurement process to curb rogue spending. Bring all spending avenues under a single window system that the procurement team can easily monitor. This approach will minimise unnecessary expenses and help control the budget. Additionally, use AI to leverage key analytics capabilities to identify and maximise cost-saving opportunities.
Compliance
Growing organisations that work in diverse geographies with different regulations find it challenging to maintain compliance. These include procurement policies, regulations, and ethical standards. AI-automated compliance checks and monitoring ensure that all compliances are met to the maximum degree of transparency, integrity, and accountability.
Data-driven decision-making
AI processes vast data sets in minutes and empowers buyers to make data-driven decisions with speed and accuracy. It simplifies complex procurement data to provide actionable insights and enhance decision-making capabilities and decision quality. AI also ensures that your processes align with organisational goals.
Process streamlining and efficiency
Automate tasks and streamline processes to drive efficiency and agility across the procurement department. Additionally, accelerate request processing times and scale operations with fewer resources. By automating and streamlining workflows, the team can focus on strategic initiatives and value-adding tasks.
How is AI transforming the source-to-pay process?
AI-driven procure-to-pay process has become the cornerstone of innovation, offering unprecedented efficiency, insights, and strategic advantages. Here are some of the essential use cases that are raising the bar –
Invoice management, payment, and reconciliation
By using AI, businesses can perform all tasks associated with invoice processing, including data extraction and validation, matching invoices with purchase orders and receipts, and executing approvals and reconciliations.
This drastically reduces errors on account of manual entry and lowers processing time while generating accurate financial reports. This frees up time for the staff to focus on other strategic tasks associated with procurement management.
Sourcing
Procurement professionals can use AI to ingest and analyse large volumes of supplier data to shortlist the most suitable ones in terms of pricing, quality, and sustainability. Machine learning algorithms can predict supplier’s performance thus helping in supplier selection and mitigating risks. AI reduces the supplier selection and onboarding process from several weeks to a single chat session.
You can also leverage AI for the bidding process, analysing responses, and knowing the best set of suppliers for optimal pricing. Auto-create Request for Anything (RFx) documents to facilitate decision-making. AI harnesses historical data of the supplier and real-time bid information to manage sourcing events and evaluate supplier performance.
Supplier management
AI offers a 360-degree view of suppliers, including the products or services they currently supply, existing contracts and certifications, service performance evaluations, invoice accuracy, and payment timelines. This helps procurement professionals make insightful supplier optimisation recommendations.
Identify strategies to enhance supplier effectiveness and develop contingency plans to handle risks. Know the supplier’s track record, including on-time delivery and trustworthiness. Automate data verification, document processing, and communication to accelerate the onboarding process. Know your second-tier suppliers and vet them for suitability in case of primary supply chain disruptions.
Contract lifecycle management
Manage the entire lifecycle of supplier contracts, from creation and negotiation to execution, monitoring compliance, and initiating renewals. Use AI to automate routine tasks, such as tracking performance metrics, compliance with terms, and quality of service. Automatically alert the contracting teams about upcoming renewal dates and contract breaches.
Leveraging data-driven insights can improve negotiation outcomes and reduce costs. It can also significantly reduce the administrative burden and the risk of oversight or non-compliance.
Predictive analytics and procurement planning
Leverage historic procurement data to predict future demand and assist the internal teams in optimising inventory according to seasonal fluctuations and changing market trends. Mitigate the risk of under or over-stocking, thus improving inventory turnover and reducing the blocked money.
Predictive analytics and procurement planning through AI help in strategic planning and budget allocation by predicting the spend patterns.
How can Infosys BPM help in source-to-pay automation?
The Infosys BPM end-to-end source-to-pay business platform drives value and reduces the operations cost while standardising the accounts payable (AP) process with a high degree of AI-driven automation. Explore our comprehensive list of source-to-pay services.
