Are you someone from the accounts payable department? If yes, then, you wouldn’t want to miss this article as we will be helping you offload a lot of your tasks. We often equate business success with scale, yet the true measure lies in the delicate balance between what flows in (revenue) and what flows out (expenditure). Regardless of a company’s size, the margin between these two cycles dictates its financial health and long-term viability.
When we delve into the expenditure side, particularly the critical area of purchasing, the efficiency of the Accounts Payable (AP) process emerges as a cornerstone of financial stewardship. Traditionally seen as just a department adding up to operational costs, today its more than that and is proving to be contributing to reducing organizational expenditure. Infact, invoice automation can significantly reduce up to 30% of accounts payable costs.
Did we strike a chord with you?
Then, how about cutting down all the tedious accounts payable process with the power of advanced AI?
Keep reading to decode more!
Taking a Closer Look at the Accounts Payable Process
A whopping 86% of small to mid-size businesses processes accounts payable manually. The entire accounts payable is a tedious manual intensive process which is filled with intense manual labor and contains a lot of data management perils that takes up a lot of time for the accounts payable team.
Here are the end-to-end processes for accounts payable:
Invoice Capture
The first step in the accounts payable process is invoice capture. This happens when a company receives an invoice from a third-party service provider or vendor. This invoice can come through various channels like email, fax or a website portal. The process of entering the invoice details into the company’s accounting system is called invoice capture. This primarily involves collecting data from the invoice and inputting it into an ERP (Enterprise Resource Planning) system.
The invoice will then be matched with the purchase order (PO) and if the criterion is met, then the payment will be approved. For the invoices without a PO, the accounts payable department will be creating a record when they receive the invoice. This entire process of invoice collection is a manual intensive process and is extremely prone to manual errors in data entry and hence can slow down the entire accounts payable process.
Invoice Approval
After receiving an invoice, it needs to match with the purchase order. If the criterion is matched and it matches with the purchase order, then, the invoice is approved for payment. If not, then it goes through a process for fixing any issues. The non-PO invoices are sent to the person who received the product or service for approval. Manual routing via email can cause delays if the accounts payable department does not know who should be approving it. This confusion can lead to further delays in invoice approval along with the operational delays.
Payment Authorization
After invoice approval, the next step is payment authorization. Invoices are prioritized and sent to the financial team for approval. Traditionally, this is a manual intensive process and causes delays as documents are passed around. The process of payment authorization can also lead to fraud when and there is a good chance for significant data leaks as the manually handling payment authorization can mean that an email or physical documentation gets passed around for a while before finding its way to the CFO or the controller for review and authorization.
Payment Execution
When it comes to payment execution process, manually handling them can be quite challenging. Manual handling can lead to slow processing and increase the chances of errors. Paper checks, in particular, can get lost or delayed in the mail. Additionally, manual processes require a significant amount of time and effort to ensure that each of the invoices is correctly matched, approved and authorized. This often involves multiple people and departments, leading to bottlenecks and inefficiencies.
The consequences of these delays are quite significant. Vendors may become dissatisfied due to late payments which can lead to damaged business relationships and can also lead to service interruptions. The accounts payable department might also face increased workload as they will be handling inquiries and complaints from vendors.
Analytics and Optimization
This is the step which takes a closer look at the internal processes for understanding what is working and what is not. The goal of this process is to streamline the entire accounts payable process, reduce costs and strengthen the supplier relationships and improve cash flow management. However, manually handling the accounts payable process will increase the risk of errors, slow down operations and limit visibility and control. This accelerates serious issues such as errors, delays and lack of control.
Turning Around the Operational Process with Automation
Enter AI Quest’s Invoice Automation
AI Quest by iNube leverages advanced GenAI to splash down the manual intensiveness of accounts payable process by the finance team. The advanced GenAI solution will be streamlining the complex task of comparing thousands of monthly bills of the service providers against the MSA (Master Service Agreement). The solution analyses multiple number of monthly bills and then segregates them based on different financial factors like originality, vendor reconciliation, payment terms and more and then verifies the authenticity of the bills and generates an approved or rejected status of that monthly bills for furthering its processing.
The invoice automation by iNube’s AI Quest saves up a humongous amount of time and effort in manually comparing, segregating and verifying volumes of monthly bills against MSAs and conserves the bandwidth of the finance team allowing them to focus on other important tasks. Additionally, it can fit into the ERP system and pull in the data from the invoices categorized as per the ERP categorization options in the form of APIs.
Our AI Quest efficiently maps various factors in the invoices which significantly helps in reducing the time for the accounts payable team. Here’s a quick look at the variables that AI Quest’s invoice automation maps:
Vendor name and details: efficiently and accurately checks for vendor names and details in volumes of invoices
Invoice Date: checks for the date when the invoice is issued
Invoice Number: checks for the unique identifier for each invoice
Line items: accurately scrutinize for description, quantity, unit price and total price for each item or service provided
Amount Payable: checks for the final amount to be paid after the tax deduction and discounts.
All these and other variables that would otherwise be costing the accounts payable team a significant amount of time.
Tapping into Limitless Possibilities with AI Quest by iNube
Increased Efficiency
AI Quest’s invoice automation will eliminate a lot of routine tasks such as manual data entry, routing for approvals, and matching documents for their authenticity. This will free up a lot of time for the Accounts Payable department, while giving the time to strategically handle volumes of invoices.
Improved Productivity
With the advanced GenAI technology, the Accounts Payable department will be able to process the invoices much faster and also more accurately. This will lead to a significant increase in the number of invoices that will be handled per employee and will significantly boost productivity.
Accelerated Processes
With advanced AI automation, AI Quest speeds up the entire invoice lifecycle, right from receipt and data capture to approvals and payments. With electronic workflows, there will be a significant elimination of the delays associated which are associated with manual handling, routing and physical document transfer. This results in expedited invoice processing and payment cycles.
Enhanced Operational Accuracy
Manual data entry leads to human errors which causes payment mistakes, discrepancies, and also opens up the opportunity for potential fraud.
Harness the robust capability of GenAI with AI Quest by iNube and explore the limitless possibilities.
Contact our Insurance Technology Expert today!
