How are you handling AP? It’s tax season, which means you are, like most of us, in a mad scramble to get your books in order! For growing businesses, the difficulty is making sure all transactions are on record and up-to-date. A missing invoice here and an unfiled order transaction there, and it’s the beginning of a series of erroneous bookkeeping undertakings that could screw up your taxes. And if you’re practicing double-entry bookkeeping, you will find it difficult balancing your credits against your debits if you fail to get your AP/AR transactions in order.
Of course, if it seems like all this is leading you down a dark hole, it’s not! It means you have a chance to change the way you handle accounts payable. Now is always a good time to do that. And intelligent process automation solutions, designed to take care of document-intensive tasks like accounts payable and medical claims processing, can be set up and running in no time. The time and effort it takes to deploy these solutions, having modular architecture and designed to be REST-based, is minimal, making it convenient to customize and integrate with existing applications. Companies usually witness bottomline growth within months of deploying these solutions.
We’ll discuss what exactly AP automation does and how it brings about cost savings you never imagined were possible with accounts payable.
Paper is a major impediment to getting all your bills sorted and reconciled on time. Paper makes accounts payable and accounts receivable operations inefficient. The first, immediate impact AP automation makes is it turns the process paperless. This is a big change that really sets the ball rolling for companies used to being buried in paperwork. Beyond this, accounts payable workflow automation transforms basic back-office functions into efficient, cost-saving processes that literally accelerate business for companies. Here’s how it all works:
Seizing Business Data at Point of First Contact: as a first step, AP automation software imports documents from various channels including through email, scan, FTPs, fax, etc. into its intelligent process automation workflow. Multichannel document upload ensures all business data and transaction documents from the edges of an organization such as a site office or inventory unit are automatically entered, digitized, and routed into the workflows. This aspect of AP automation greatly reduces any chances of business data going missing or left unrecorded.
Going Paperless: intelligent data capture is a game-changing digital transformation technology employed in IPA solutions that is really helping companies transition from manual-fed, manual-led working to unattended process implementations. If supplier data comes in through email or other electronic means, the documents are directly routed into the Intelligent Process Automation workflows.
But when it comes to paper, companies have traditionally resorted to manual data entry work. And this is where the accounts payable process starts to decelerate and impact the overall functioning of the accounting department.
Manual data entry work is time consuming and costly. Intelligent Data Capture technology, which is embedded in an IPA bot, essentially replaces manual effort but also hastens the capture process. IPA bots employ Machine Learning and OCR/ICR technology to recognize and capture data fields from typical transaction documents like vendor invoices and sales orders.
OCR/ICR is best suited for capturing documents having standard templates. The technology relies on context to pick up important line-item and header-footer details like vendor name, TOTAL, etc. When an IPA bot encounters a new type of invoice with a new template, for which it does not have in-built capture logic, OCR/ICR technology is rendered useless.
This is where Machine Learning becomes useful. IPA bots use Machine Learning to learn the user actions performed to input new invoice details the first time. This learning is retrieved from memory and put to use by IPA bots to process subsequent invoices having a similar template. Intelligent data capture with Machine Learning technology is a game-changer for organizations as it lowers the dependency on human effort to perform data entry tasks significantly.
Intelligent Indexing: Scanning and digitizing paper documents gets you a foot in the door in terms of accelerating AP, but the real headache is when you fail to locate or retrieve digital files, just as you would fail to pick out a document from a truckload of paper.
Even when you use a scanner to turn paper documents into digital files, you will need to manually tag each document to be able to search and retrieve it. What's the point of going digital if you have one more task that needs manual intervention?
Intelligent Process Automation extracts valuable metadata from invoices like vendor ID and date of purchase, and uses it to automatically index documents. You are not only saved the effort of manually naming every document but also the time to retrieve important files as and when needed.
Auto-Validation: cross-checking incoming invoices for the right PO match and vendor details is a necessary step that again takes up valuable time. Also, when dealing with invoices and sales orders in the hundreds and thousands every month, it is near to impossible to tally every invoice with every purchase order without getting lost in paperwork. Intelligent Process Automation performs automatic data validation through automatic 2-way/3-way matching and cascading vendor lookups.
Exception Handling & Approvals: how would you know if you’re dealing with a duplicate invoice? The fact is, you won’t, until it causes a dent in your cash reserves. The biggest visible advantage with accounts payable workflow automation is you have a credible audit trail of incoming invoices, paid invoices, invoices pending verification and reconciliations, etc. IPA automatically tallies invoices against database records to check for duplicity. Again, any similar exceptions during validation like missing invoice data or duplicate invoices are automatically flagged and re-routed through the workflows to verification managers or users for review and approval. Workflows can also be customized to route invoices to verification managers for approvals, even if there are no exceptions, before exporting them to an ERP system.
Accounts payable workflow automation really takes the drudgery out of vendor reconciliations and payments. It’s what you need to get your books in order and file your taxes on time.
Want to know how to get started with AP Automation? Talk to Artsyl.