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Monday, April 22, 2024

How to Streamline Your Accounts Payable Process with Intelligent Invoice Processing

The never-before-seen growth of modern digital solutions is changing the rules of the business world. Digital technologies have opened up fresh possibilities for businesses to reinvent themselves and bring efficiency and speed to the center of their business model. At the same time, there is an increasing expectation that efficient processing and faster delivery should take center stage. Efficiency and speed are no longer nice to have aspects. In the world of accounts payable processing, especially, these two characteristics can be a competitive advantage.

Why so? Take the example of procurement. From buying small pieces of operational materials to importing multi-functional equipment, procurement is the heart and soul for companies to function non-stop. But how complex the procurement process can get? A typical scene in a procurement process begins with the procurement team listing out the goods to be purchased and initiating purchase requisition. The team then finds a suitable vendor from bidding. The PR is then approved by someone in authority and the purchase order is created. The PO is then sent for approval, and the approver sends the document back to the procurement team. The supplier receives the PO and ships the consignment. The vendor’s payment invoice is processed, validated, and verified before payment approval. Undoubtedly by this time, the entire team is exhausted, individual data is manually entered into the ERP, and errors are made and corrected. In short, the lifecycle of Procure-to-Pay is characterized by a very complicated process to deal with. 

The typical solution proposed for this conundrum is to set up homegrown, ERP-based modules to strategize the processes and synchronize complex manual tasks with those tools. These attempts largely fail as they do not bring a holistic approach or long-term solutions to solve the problem.

To tackle this increasing complexity at all fronts, there is a better alternative: automating the accounts payable through intelligent invoice processing. Automating the intricate, labor-intensive accounts payable workflow, when combined with AI, ML, and Deep Learning technologies, hold the key to improvements in procurement processes.

Why Intelligent Invoice Processing?

One Solution To Handle The Entire Workflow: There are tools and capabilities that are usually used to manage invoice processing. There are hundreds of tools in the market that succeed to some extent in simplifying a given task in the procurement-to-pay cycle. These tools are capable of helping companies with, say, purchase order approval. The problem is, these solutions are not equipped with creating purchase orders. For that, the company needs to find, buy, and implement another plug-in or app.

The company is then required to integrate yet another solution for vendor payment and so on. In the end, the company ends up spending millions of Dollars to automate each step or workflow in the invoice processing cycle. Some companies even go to such a length as setting up special ERP systems just to pull the vendor details. It is obvious this disjointed invoice processing is unwise and does not yield even the minimum ROI.

Now if we look at the automated invoice processing, it is completely based on the strategy of ‘spend less to achieve more.’ It may seem an unrealistic goal at first. But one key difference is, intelligent invoice processing creates a holistic, coherent approach that can ramp up efficiency and effectiveness. Intelligent invoice processing applies automation solutions holistically, bringing together the best of intelligent technologies. The results are spectacular: organizations can see tangibly the better speed and performance of their procure-to-pay processes. Companies can also clearly have increased visibility into every transaction at every step of invoice processing.

You Need More Than Just RPA: There are companies that aim a little higher and go to RPA to automate their invoice processing. Though RPA is an incredibly useful solution, it also has its limitations. RPA is good at performing always-the-same tasks; extracting all the information in an invoice document is one example. But the problem arises when RPA is not designed to read information from invoices and such documents. So humans end up segregating and validating the useful data from the heap of information extracted by RPA. It adds no value as it is only a partly automated process that is not going to make lives easier at all.

Now intelligent invoice processing can process incoming documents faster and more accurately. It can extract business-relevant information and simplify the task by minimizing the time and effort it takes to process business documents. Intelligent Document Processing captures the information from the documents and creates customizable workflows to manage the approval processes. This smarter move can unlock important information and insights from these documents. It not just digitizes the documents but also helps in making sense of the data.

Avoid Manual Errors Completely: Invoice processing is the centerpiece of accounts payable. But manual data entry can be a real problem as manual efforts lead to inaccurate invoicing. Businesses cannot rely on inconsistent and data of questionable quality. Worse still, when errors sneak in, addressing them manually is an impossible task.

Intelligent invoice processing systems easily and with cognitive power extracts information with zero error. The solution is incredibly scalable and easy to manage. Thanks to its AI-powered data extraction, companies can be assured that the data is completely accurate. In this way, intelligent invoice processing eliminates manual mistakes usually made by the finance department when entering invoice data.

A Central Repository To Track All Invoices: When the administrative officer in a company draws a purchase requisition document, and when the document is passed on to the procurement department, the whole process is apparently manual in a typical procurement setting. But the process becomes disjointed when multiple purchase requests are involved, and it is impossible to track each and every PR. 

This risky problem can be overcome through intelligent invoice processing, which creates a customized workflow and a paper trail to hold everyone accountable. When the digital PR is moved to the centralized system, it is easy to track it throughout its lifecycle – from its creation, and review, to the approval. 

Automatic Document Classification: When intelligent invoice processing is involved, two of the most cognitive technologies come into play: Machine Learning (ML) and Natural Language Processing (NLP). When the invoice is received, Automatic Document Classification (ADC) systematically categorizes the invoices based on vendor types. Invoices from multiple different vendors can be sorted based on the vendor names, types of goods, and contractual terms. This level of accurate automation resolves hours of manual classification. 

Intelligent invoice processing solves another complicated problem: invoices do not come with coherent text lines but often contain text blocks and tables. Even worse, the document template varies from one another, making data extraction even more difficult. But NLP interprets the free-form text and locates necessary information that needs to be extracted from the document. 

Intelligent Invoice Reconciliation: During the invoice validation process, it is rarely the case that the purchase order, packing slips, and supplier invoice match. Exception handling and data reconciliation are expertly done at this stage with intelligent text analytics. AI-powered automation system intelligently facilitates three-way matching to highlight discrepancies and reconcile disputes in real time. Identifying overpayments and other payment irregularities save hundreds of thousands of dollars for organizations. Since pricing errors, errors in the master vendor file, and manual errors are filtered and resolved, fraudulent or duplicate invoices can be spotted with advanced visibility. The invoice will then automatically be routed to the appropriate approver for quick verification and to begin the payment process. 

Team Techfily
Team Techfilyhttps://techfily.com
Techfily is an online webpage that provides business news, tech, telecom, digital marketing, auto news, website reviews in World.

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