The Future of Automated Accounts Payable: More Efficient Invoice Processing

Automated accounts payable: The future is now

Have you ever found that some process or procedure that you thought was once just perfect is suddenly no longer fit for purpose?! The fluid and dynamic nature of the operating environment means that enterprises cannot afford to be complacent.

The term ‘uncertainty’ has become synonymous with the turbulent economic times we’ve experienced, almost continually, since 2008. However, more recent times may be better characterized through the word ‘disruptive’.

In this respect, technology has been the key agent of change. For corporate finance departments, the traditional functional area of accounts payable (AP) is undergoing a significant transformation.

At the heart of this change is applying automation to invoice processing, a shift that is revolutionizing how businesses manage their financial operations. In this blog, we’ll explore the compelling advantages of automated accounts payable processing, the key features that drive its success, upcoming trends, and practical steps for a smooth transition that helps to drive continued success for enterprises.

The visionary benefits of automation

Just suppose that an accounts payable department could operate with unparalleled efficiency, accuracy, and speed. This vision becomes a reality through automated invoice processing.

Recently, speculation about the rapidly evolving field of artificial intelligence (AI) has dominated the tech as well as the non-tech news. For some, the future of AP is to be found in AI.

However, before AP leaders begin to look towards next-gen AI-powered invoice processing technologies, they need to consider whether they have exploited the full advantages of software automation. The key advantages of automated accounts payable software are:

Boosted efficiency – Automation significantly accelerates invoice processing times. Manual data entry is time-consuming and error-prone. Automation captures invoice data from digital and hard copy formats. This virtually eliminates errors, allowing for seamless data capture with a 100% accuracy rate. This level of accuracy all but eliminates the time that is wasted on unravelling mistakes in AP processes to correct problems, such as over payment.

Streamlined approvals – An automated accounts payable workflow ensures invoices move swiftly through the approval process. First and foremost, this expedites payment cycles, supporting more timely invoice settlement. This, in turn, leads to cost savings and improved relationships with vendors, and prevents the disruption to operations that may occur, when delivery of goods and services is delayed or withheld.

Key features of automation

Automated invoice processing relies on several key features that drive its success:

• Global einvoicing – einvoicing is already mandatory in many countries and adoption will only increase over time as governments seek to gain better control of tax revenues. Enterprise customers need a global solution in place that meets mandates now as more come on stream.
• IDP technology – Intelligent Document Processing is the next-gen technology replacing traditional OCR. IDP automatically converts PDF and paper invoices into einvoices, making it possible for further automated processing to be performed. This eliminates the need for time-consuming OCR and manual data entry. Paper invoices are all but dead in most enterprise AP departments.
• Automated PO Matching – In an ideal world, business users raise their PO’/GRN’s correctly and vendors issue their invoices correctly, which makes it easy to match invoice lines to PO lines. However, anyone in Accounts Payable appreciates the process is never that straightforward, so you need intelligent matching capabilities to ensure high automation rates.
• Automated Issue Resolution – Even the most intelligent matching technology will never be 100%. However, if you can categorise the exceptions then you can also automate the resolution based on business rules. Automating issue resolution provides more efficiencies in Accounts Payable as most of the problems are actually owned by the business, so the quicker you can get the exceptions to the right person the more likely it is that you will resolve the issue on a timely basis.
• Insights and analytics – A key output of automation is the metadata that is generated throughout as the process runs. Analysis provides valuable insight and analytics, enabling enterprises to make better decisions driven by data, optimise their processes, and enhance the overall performance of financial management.

Future automated invoice processing trends

For enterprise AP departments, automated accounts payable is just the beginning of a journey. Future trends that we can expect to see in AP automated invoice processing include:

• AI and Machine Learning (ML) – We referenced next-gen AI powered invoice processing in general above. However, specifically, more advanced AI and ML technologies are likely to enable smarter invoice analysis. This allows enterprises to better forecast payment patterns, make more accurate predictions of cash flow and working capital requirements, and optimise their higher level financial strategies.
• Blockchain security – Blockchain technology is already well-established as a means of assuring the accuracy of transactional data. It is likely to be adopted by automated accounts payable solutions to provide transparent, secure, and tamper-proof transaction records, reducing the risk of fraud and ensuring trust in financial transactions.

Steps for transition towards automated accounts payable

Using broad brush strokes we can readily define the process of transitioning to automating invoice processing. Below, this is outlined as a series of strategic steps that take you from where you are now to where you want to be:

• Assess and identify – Evaluate your current AP processes and identify pain points that could be alleviated through automation. The checklist in this blog may be useful for helping to assess your needs.
• Choose the right solution – Select an automation solution that aligns with your enterprise’s specific needs and objectives. Find out how to identify ‘the best from the rest’ in this companion APMatching blog.
• Test and evaluate – Wherever possible, take up opportunities to test drive shortlisted invoice processing solutions with free trials, or more detailed and meaningful PoC testing, that lets you securely use your own real-world data.
• Test and implement – Perhaps consider beginning with a gradual adoption process, and take your team with you as you all get comfortable with the new system. Vendor assistance in managing change and providing training is an important factor for assuring a smooth transition.
• Continuous improvement – Regularly monitor system performance and gather feedback from your team. Use this data to optimise and refine the process as needed to support the goal of quality management.

Automated accounts payable with APMatching

The effective use of technology is a differentiator that provides competitive advantage. Consequently, it is a key determinant of continuing success.

APMatching automated accounts payable software provides enterprises with a sharper, more strategic edge to AP, maximising efficiency and optimising operations.

Take a personalised demo with one of our representatives, and we’ll show you how the software eliminates tedious, time-consuming manual invoice processing and automates duplicate invoice detection.

If you like what you see, we’ll give you full support so that you can more fully evaluate APMatching with a Proof of Concept (PoC), demonstrating how effective it is by using your own data.