The blog will shed light on the urgent need in logistics for Automation in Accounts Payable, goals, & challenges in AP, and what are the benefits of AP Automation especially with Intelligent Document Processing.
Accounts payable plays a vital role in maintaining any company's finances and its relationship with suppliers. The department makes sure that the purchase requests are fulfilled timely, authorized by relevant parties, and a healthy relationship exists with the suppliers by lubricating timely payments.
Initially purchase requests from an organization are carried via credit. Once the company gets its delivery for received goods payments are released to the supplier upon final audit of the items by accounts payable.
This entire cycle takes place in multiple stages such as external confirmation for purchase request, tracing of order, allocation of payment authorization, etc. This, thereby, produces paperwork that needs to be dealt with. This paperwork often becomes a large pile that is manually processed for verification leading to delayed responses, late payments, and human induced errors that end up creating turmoil with supplier relationships and preceding penalties.
This is the reason organizations today have realized the importance of Accounts Payable automation and the benefit it seeks for logistics.
With disruptive platforms such as Intelligent Document Processing, it is possible to turn the entire task of data extraction and verification completely autonomous.
An organization primarily has three different types of accounts i.e. personal accounts, real account, and nominal account. With accounts payable, this mostly pertains to the nominal account of a financial year. This encompasses a multitude of roles and responsibilities levied on accounts payable such as:
Each of these duties subside with multiple microprocesses. This in turn produces more paperwork that requires automation to ease the process and prevent errors during a complete cycle of fulfilling a purchase request.
AP Management maintains a subsequent number of financial transactions for an organization. Over the years, the AP management teams throughout industry verticals have realized the need to achieve certain goals fulfilling the process.
In a report by Aberdeen Group, about 42% of the participants wanted to capture early payment discounts for credits. This was followed by 35% for maintaining healthy supplier relationships, 31% for improving supplier relationships, and 27% to manage large changes in invoice volume during seasonal spikes.
The issue exists with the manual verification adding more time to the entire operation. It delays payments creating a large gap between the realized goal and what is achieved? With AP automation using IDP, it is possible to speed up invoice processing and data validation exponentially utilizing a custom workflow.
With specific goals, the AP departments also face subsequent challenges that need to be dealt with for a smooth purchase cycle. For instance the same study by Aberdeen Group shows the need for real time data availability in the AP Process by 40%. Another 33% face challenges during processing high volumes of data with existing staffing levels and about 29% face difficulty while locating and managing paper-based documents.
AP departments today are transitioning from manual processing to automation. This transition includes a variety of solutions deployed for accounts payable automation including IDP that show significant improvements in the overall efficiency. For instance, organizations which automated their AP processes have been reported to be enjoying 49% cost saving during invoice processing, 63% higher chances of “straight through” processing, and an increase in processing by 4.11x for the total volume of invoices.
A few common hurdles that plague the accounts payable department while going through different manual stages such as document data extraction, verification, and authorization ranges from data re-entry to incorrect data, and from lack of visibility to multiple formats. All these factors in turn lead to another set of problems like loss of data, delayed responses, delayed approvals, zero cash flow visibility, etc.
VisionERA as a platform caters to all these challenges. It is a document centric platform that takes documents in bulk from downstream applications and extracts data & verifies it leveraging automation technologies such as Artificial Intelligence, Machine Learning, Computer Vision, and Natural Language Processing.
Inclusion of these technologies makes it a one stop solution which can pre-process (image quality optimization), process, segregate, sort, and store data. The platform also offers the capability to extract specific entries from thousands of documents in a single go.
With VisionERA, Accounts Payable departments have the capacity to deploy AP automation end-to-end. The platform learns and evolves to improve level of automation and accuracy with each iteration. It only demands feedback for exceptions which it also learns using the AI technology.
Let’s take the example of extracting data from 5000 unstructured invoices for supplier’s names, address, and total. The operator is required to upload the batch of documents and VisionERA will automatically extract data for these fields. It can even extract data for similar entries described differently in a similar type of invoices from different sources. For example, supplier name can be mentioned as name, name of the supplier, supplier, etc. This data can be easily exported in a CSV or Excel format. It can also be fed directly into any data management system using API.
To verify the same invoices for validation, VisionERA can take advantage of the existing database or external documents. The operator is only required to assign a key entry such as supplier’s address, contact, etc to cross-verify the invoice data with, VisionERA will automatically compare the key from the invoice and the database to show verified results. This result can be easily exported, thereby, providing verified data. VisionERA can also take advantage of the QR code for verification, if there is any in the invoice.
Accounts Payable today are dealing with exhaustive work load. With AP automation, the organizations can have the benefit of recuperating with repetitive and redundant tasks. AP automation will not only help Accounts Payable clerks to ease with the overpowering workload but also help provide a trustworthy platform that avoids manual errors and requires intervention when needed. With VisionERA, an increase in overall efficiency and reduction in cost & time can be realized post to its deployment.