Procurement and payments processing are essential business functions that determine the overall success of a company. Done right, companies could yield higher revenues. Done wrong, they could be paying in terms of process inefficiencies, operating costs, lost business, and missed revenues. Traditional management of these mission critical operations usually entail a lot of labor and time. Added to these are the lack of visibility and transparency in how products are being procured and paid for, including the vendor transactions and payment status. These factors can not just delay business but also lead to increasingly siloed operations where the left hand does not know what the right is upto. Siloed business functions can cost companies monetarily and also in terms of return customers. When individual departments are unable to coordinate functions effectively to complete customer service and orders, the impact is directly felt on the business and revenues.
It is important that companies make timely payments for the raw materials and goods they procure in order to offset the growing debt and also ensure deeper trust with vendors. Good vendor management helps accelerate procurement and in turn the delivery of services to the end-customer. In essence, procurement, payments, and customer order fulfillment are all interconnected, with the success of one business function depending on the other.
Manual processes lead to siloed functions and a disconnected business environment. A good way to lower the occurrence of siloed operations, especially along the critical chain from procurement and payments to order delivery, is to remove the dependence on manual effort. Technology helps companies achieve this. Technology mobilizes operations that typically get stuck or mismanaged due to human input, and it is true for procurements and payments as well.
In the case of procurement and payments, there is a lot of paperwork that has been traditionally handled with manpower. Manual paperwork is error-prone and inefficient. Instances like wrong data entry, missing files, duplicate documents, etc. add to the confusion, delays, and costs of document processing work. A simple task of processing an invoice, for example, could involve a lot of data entry and data validation steps including checking for vendor details, performing 2-way and 3-way matching to ensure the invoice details match the corresponding purchase order and receipt, checking for duplicity and missing transaction details, confirming if any late fees need to be paid, and also re-entering transaction and payment details in the company’s business application or ERP system for record keeping.
The involvement of personnel at every step of invoice processing can cause a lot of human errors and delay final payments to the vendors. Procurement also suffers from the same manually induced errors and inefficiencies.
In order to ensure better business outcomes, companies must invest in a solution that streamlines and connects procurement and payments processing. The best way to do this is by having a solution that replicates human actions to get work done, but without the accompanying errors and inefficiencies. Intelligent process automation is the answer.
What intelligent automation does is it creates a single platform for procurements and payments processing, leaving no instances of gaps between the two functions. Digitization of transaction documents and paperwork enables companies to capture procurement and payments data right at the source, removing instances of missing or duplicate paperwork. Intelligent automation employs digital transformation technologies like AI and machine learning, along with robotic process automation, intelligent data capture, OCR/ICR/OMR, and business process automation. These technologies help intelligent automation bots perform human-like actions to capture, extract, classify, validate, and verify procurement and payments data from supporting documents including purchase orders, invoices, credit memos, receipts, statements, etc. The bots can acquire transaction information by capturing data from any number of diverse incoming channels including emails, FTPs, post, fax, scan, MFPs, etc. This aspect of intelligent automation, where the bots are able to capture critical business data right at the source, is very helpful as it lowers instances of missing or fraudulent paperwork entering the processing chain.
Intelligent automation creates a platform for end-to-end processing of procurement and payments data and documents. The removal of manual involvement to sort out the most mundane, repetitive, and time-consuming steps like data entry, document sorting, and validation helps remove delays and errors, and accelerate procurement and payments. A single transformative platform solution such as this also connects the purchasing and accounts payable departments for better collaboration, transparency, visibility, and task completion.