An agile accounts payable department is an essential element of a successful back office, but achieving speed at scale is nothing short of a major challenge. Even for established businesses, the lingering presence of heavily manual workflows for processing invoices can be a significant factor in slow payments. Errors, lost paperwork and frequent bottlenecks translate into unhappy suppliers and missed deadlines.
It shouldn't be a surprise to learn that automation is one of the hottest topics today among AP teams at all levels of business. From machine learning software that adapts to the complexities of AP document handling to invoice processing using automation, there are many opportunities to consider. Each of them holds potential for improving your bottom line while proving themselves through a robust ROI.
Automation is one of the best cutting-edge technologies for your business to consider when seeking to reduce the manual process elements of AP. Where are the best places to automate in accounts payable, and how can your business avoid costly automation failures?
In this discussion, we'll explore the following topics:
- What Processes Are Most Suitable for Automation?
- AP Automation That Eliminates Errors
- The benefits of automation in invoice processing
What Processes Are Most Suitable for Automation?
Not every business immediately succeeds when implementing automation tools such as software robots. Automation failures can be costly setbacks for companies that would otherwise benefit immensely from a successful setup. To ensure your AP department smartly invests in automation for billing and invoicing, it's critical to identify the processes most appropriate for automation. There are three crucial types of workflows that artificial intelligence can most capably handle.
Accounts payable actions that are easy to define by clear-cut rules are ripe for automation. Unfortunately, these tasks are often rote and repetitive, and the same rules apply to every decision every time. For example, AP Automation software passed validated invoices to the correct individuals for approval automatically. Any invoice over $1,000, for example, might need to always go to the same individual for authorization.
So identifying the aspects of your accounts payable operations that follow clear rules will open the door to automation that makes sense for daily operations.
Digital Data Inputs
When paired with machine learning tools capable of processes such as "cognitive capture," which intelligently classifies the data on a document page, software robots can capture a large amount of information. Unfortunately, extracting line items, purchase order and invoice numbers and other data on invoices can largely be left to automation today.
There's little need to worry about automation passing along incorrectly captured information. With the ability to gauge its confidence in the output of data capture, potentially problematic items can automatically route to a human AP clerk for manual processing. Once the exception has been handled, it can re-enter the automated workflow instead of requiring handling entirely by hand. However, do note that some software can struggle with data that never arrives in the same format.
Structured or Highly Repetitive and Stable Data
With the above in mind, the other parts of AP most ripe for automation are those whose data conforms to a highly rigid and stable structure. Invoices that always arrive in the same format and with the same image clarity, for example, are good candidates. Similarly, tasks requiring data entry into templates or forms that never change are also ideal for robots.
Therefore, you could use a software to automate much of the tedious data entry in back-office roles. These manual entry methods are more than timewasters; they are highly prone to error. When the information stays consistent from step to step because cognitive capture will never transpose a digit, you can increase the speed and confidence of your workflows.
Factors to Consider When Evaluating RPA
Let's drill down further on how to identify which elements of accounts payable to hand over to software tools. Remember, you aren't entirely removing the human element—there will always be people there to double-check the work of your tools and to handle edge cases. As you take a broad view of your team's activities, keep the following in mind as you evaluate each task.
- The potential for automation. How much of a workflow can you automate? In other words, considering the strengths and limitations outlined above, which tasks can gain the most from automation? For example, a workflow that can only be automated to 10% is less valuable to your organization than a task you can automate half or even all the time.
- The complexity of the task. How many opportunities are there for something to go wrong in a task? What kinds of exceptions might there be? Would it be difficult to automate a task because the data needs to pass through so many different systems? Evaluating the real-world challenges of automating complex tasks ahead of time is a crucial step.
- The benefits of automating. Perform a cost-benefit analysis comparing the potential price tag of an automation project to the benefits you'll see in daily operations. Are the opportunities for early payment discounts and an uninhibited cash flow easy enough to realize without overspending? Assess the real benefits of automating any given task instead of deploying software tools "just because."
Selecting software built to help you succeed in these efforts is your next move. With cutting-edge solutions such as Kofax AP Automation at your disposal, implementing a successful automation program is within easy reach. Learn more about how to automate invoice processing today.
AP Automation That Eliminates Errors
Once you've chosen how to modify your procedures for invoice processing with automation and acquired the appropriate software to do so, it's time to consider deployment. Where and how do you need to focus your attention to create workflows that achieve the stated goals of your automation efforts?
There are four specific areas to focus on: invoice monitoring, data capture, and notifications inside and outside the organization. When your goal is to remove as much human error from the equation as possible, here's what to consider.
Monitor Invoices Closely
When a new invoice arrives for your business, how long does it take before processing begins? If you're still receiving paper invoices, it could take some time before someone opens the envelope and begins keying the information into the system. However, with automation, processing can begin instantly.
Paper invoices scanned with OCR or cognitive capture that are automatically ingested into an AP Automation solution which inputs the correct data into appropriate systems. AP Automation can also monitor emails associated with AP when you choose to transition to accepting invoices in a primarily digital format. When automation get the ball rolling for you, you can shave down cycle times and start processing more invoices daily.
Capture and Evaluate Invoices Easily
Equipped with machine learning-powered AI, AP Automation can do more than merely extract the information on a given invoice. Advanced tools, such as those present in Kofax AP Automation solutions, can automate several critical invoice validation steps. This process often includes matching the invoice to the noted purchase order in the system and checking the invoice against predefined rules. If the invoice passes, it can be automatically processed. Otherwise, the invoice is flagged for review.
Automatic exception flagging is only useful when your staff knows some items need attention. W. As your teams devote their time to other efforts, automation software alerts when an invoice triggers an exception. This further reduces cycle time by making it easier to resolve concerns quickly and ensures that critical invoices don't proceed through the system with errors.
On Time Payments
Vendors love to know when they've been paid—and it can be critical for ensuring you receive those important payment discounts, too. There's no reason clerks should need to devote time out of the day to send payment emails or make notifications manually. E-invoicing portals allow suppliers to have access to view the status of their payments without the need for manual inquiries.
The Benefits of Invoice Automation
What can you anticipate at the end of the road towards accounts payable automation? In other words, what are the tangible benefits for your teams and the business at large? With a well-configured invoice automation, there are clear advantages to unlock across the board. Let's consider each of them in turn.
AP audits can be painful and messy because of poor record-keeping and a "paper trail" that is difficult or impossible to follow at times. Manual processes and individual employee preferences often create these problems, but automation can solve them.
With less time spent processing invoices daily, your business realizes cost savings in many areas. Payroll could be reduced due to the potential need for fewer clerks handling invoices. In addition, the individual cost of processing each invoice can drop due to the number of steps that occur entirely behind the scenes. Overall, automation solutions can yield substantial savings for a business and make AP a value-creator rather than a money pit.
With well-defined rules, advanced software, and the proper oversight, it's possible for AP to all but eliminate most of the headache-inducing errors that keep department directors up at night. For example, mistakes that lead to double payments, such as mismatched invoices and POs, can vanish. In addition, fine-incurring late payments could be avoided on a more routine basis because of automatic notifications and reminders. That's not to mention the time you'll save by avoiding basic data entry errors introduced by tired and stressed employees.
Now is the time to leave manual process work in the past. With mature technologies capable of providing the support companies need to handle automating invoices at even the multi-national scale, why leave potential savings on the table? Accounts payable teams working in tandem with automation software are more productive and capable of producing valuable business insights and far less prone to costly errors.
By adopting advanced solutions such as those built and maintained by Kofax, your business can enjoy early payment discounts and forge stronger supplier relationships. When combined with an electronic approvals process and digital payment solutions, processes that once took days or even weeks can now take minutes and hours.
Discover the difference you can achieve with AP Automation