Managing the accounts payable department can be a challenging task. Companies are often tripped up by manual data entry errors, lost paper invoices, missing information and delayed approvals. Beyond wasting time and eroding efficiency, these stumbling blocks can also lead to financial loss – especially when gaps in poorly managed processes result in overpayments or facilitate fraud.
These are not new problems, yet they continue to cause headaches for businesses that have not yet found a holistic and intelligent solution for managing accounts payable (AP) processes. Of course, technology has a valuable role to play in addressing these pain points, but there does not seem to be one technology that can solve for everything on its own.
In this article, we look at how companies can use a combination of complementary technologies – including robotic process automation, digital process automation, optical character recognition and artificial intelligence capabilities – to tackle AP challenges from every angle.
Move on from manual work and spreadsheets
Many companies rely on manual data entry to pay invoices, create purchase orders and so forth. Unfortunately, a manual working environment tends to slow down AP processes. Overworked AP teams struggle to pay invoices on time when they are bogged down by low-value manual tasks, such as opening mail and retrieving email attachments, manually capturing data into spreadsheets, copying and pasting information between documents and systems, routing tasks to the next person, chasing down missing details, and so forth.
Manual data entry is one of the most common causes of accounts payable problems. It’s so easy to make mistakes, especially when AP employees are under pressure to work as quickly as possible, so that people can be paid on time. Typos are almost inevitable – and can be extremely costly.
Additionally, when Excel spreadsheets are used to manage information, this often results in data becoming decentralised. This makes it difficult to access the information required to approve payments, or quickly and accurately report on cash flow.
All in all, there are many highly repetitive tasks that need to be carried out by AP employees. With a solution like robotic process automation (RPA) in place, you can automate repetitive, mundane tasks to reduce the risk of error, boost accuracy and increase processing speed. RPA software bots, which can be created in a tool like UiPath, are able to execute a wide variety of tasks that humans would otherwise have to perform, such as looking up purchase orders, posting invoices to an ERP, making invoice payments, and more. This gives your employees more time to focus on higher-value work, such as supervising the software bots and handling the more complex cases.
Manage invoice data smarter
While RPA has a key role to play in data processing, software bots can only process information from invoices that arrive in a consistent, standard format. Documents also need to be easy to ‘read’. Poor quality or strangely angled scans will confuse a bot and make it difficult for this resource to find the relevant information needed for processing.
The right AI-enabled technology can help to address this challenge. Just as the human visual system can, an AI-enabled optical character recognition (OCR) solution like ABBYY is able to automatically determine the location of critical information that needs to be extracted from the invoice, purchase order or receipt, regardless of its format. This software can scan invoices, extract data and then past this onto a human user for verification. The human can then review the data and fill in missing information (by comparing extracted data and invoice data).
Streamlining slow or inconsistent processes
AP processes are often plagued by inconsistencies and a lack of accountability for key tasks. Before introducing automation and AI, it may be necessary to update process designs first. Well-defined, streamlined workflows remove guesswork and delays.
One way to build customised AP workflows quickly is to pull in a low-code digital process automation (DPA) technology. This type of platform provides user-friendly tools for mapping out and optimising processes; and then building tailored process management applications, digital forms and workflows, with minimal need for coding. It also allows you to drag-and-drop AI tools and RPA software bots directly into your AP workflows, as needed.
This lays the foundation for an intelligent AP process automation environment that brings humans into the loop only where necessary, letting technology take care of the rest. Human-led tasks could range from reviewing and updating extracted invoice data to handling exceptions.
Ideally, you want a DPA platform like K2 that integrates well with multiple technologies, including third-party applications and line-of-business systems (your accounting package, for example). This helps to create a process management solution that extracts and shares data between various systems with ease, eliminating the need for manual data entry.
Another reason to move to an intelligent automation AP platform is to gain greater visibility into AP process status and data. When AP tasks rely on paper records, siloed spreadsheets and manual work, there’s no insight into what the team is currently doing or spending; and limited visibility for forecasting purposes. Without easy access to accurate and up-to-date AP information, it’s very difficult to prioritise payments and control cash flow.
An automated AP workflow provides an overview of the status of all invoices and the ability to track related actions. It’s easy to pull queries and reports, as well as monitor money owed and going out. With all process actions logged by the system, you also have an electronic data trail should you need it during an audit, or to prove compliance with regulations.
Reducing losses through intelligent 3-way matching
When controls on invoice approvals and payments are not well defined or enforced, this can create the risk of financial losses due to fraud or human error. Sometimes, AP staff mistakenly pay invoices before confirming that the product or service has indeed been received. Other times, the AP team accidently processes the same invoice payment twice, often due to vendors sending a second invoice if their first invoice wasn’t processed immediately
Intelligent three-way matching is an ideal tool for solving these issues, by automatically comparing three types of documents – 1) purchase orders, 2) order receipts or packing slips, and 3) invoices – in order to flag any discrepancies.
With an intelligent three-way matching process built into your purchase control system, which includes both automated and manual safety checks, you can prevent overspending or paying for an item you haven’t received. This type of system should ideally be able to intelligently scan and extract information from invoices (in any format) and compare this to the purchase order and receipts data captured in internal systems. With these capabilities in place, all routine matching work can be automated and then presented to experienced staff members to review and – if accurate and complete – approve for payment.
This way, human employees take on a more supervisory and specialised role, letting intelligent technology take care of the grunt work. In addition to boosting employee satisfaction and reducing payment cycle times, this approach helps you to control expenses and reduce the risk of fraud.
A new solution that combines all these capabilities
If your business is looking for an intelligent accounts payable solution that combines all these technology capabilities, rapidMATION’s intelligent accounts payable automation solution could be the answer for you.
Our solution weaves together market-leading technologies from ABBYY’s document capture and optical character recognition solution, K2’s low-code application development platform and UiPath’s robotic process automation software, to provide an intelligent answer to your AP problems. You can use this the solution out-of-the-box or customise it to your environment and needs.
We will be showcasing this solution on 10th October via a live demo and you can register to attend here. FOr a quick overview of what AP solutions we are delivering to our customers today you can see one of our demo’s here: https://www.rapidmation.com/showcase-k2-uipath-for-invoice-processing