Why do we need to automate accounts payable? To answer this, we must understand what accounts payable entails. Companies regularly receive invoices from vendors for the purchases they make. The AP department spends a lot of time and resources sorting and filing invoices. The AP personnel also need to communicate with vendors regularly to answer why there is a delay in the payment of invoices or get clarification on any discrepancies in the invoices. A lot of time also goes into preparing invoices for data entry; asking for duplicate copies from vendors if needed; and solving incidences, if any. As one can see, this is a heavily manually-driven process that involves a lot of employees for performing data entry, validation, verification, and accounting work.
The back-and-forth communications with vendors and internal departments plus the heavy-duty manual paperwork makes manual accounts payable a highly error-prone function. Typical manual errors like entering the wrong data from an invoice into a company spreadsheet, processing duplicate invoices, matching invoices to the wrong purchase order, missing paperwork, or having a few purchases go unaccounted for, etc. all lead to the wrong AP results. The time, costs, and labor involved in correcting and reprocessing invoices is also huge.
Accounts payable automation software resolves a lot of the challenges that come with manual paperwork. The software is embedded with intelligent invoice workflow automation and advanced capture technology for automatic acquisition, validation, verification, and export of invoices to an end business application like an ERP system or document management system. Accounts payable automation software is really an intelligent automation platform that employs digital transformation technologies like AI, machine learning, intelligent data capture, OCR recognition software, robotic process automation, and business process automation to perform hands-free invoice processing. The intelligent automation platform accepts incoming invoices in any format: scan, fax, emails, file transfers, MFPs, etc.
The invoices may arrive in electronic formats like .pdf and .xml files, or in paper form. Data capture and extraction from an invoice is done using machine learning and OCR technologies. Each captured document is assigned a workflow based on business requirements and rules. On receiving an invoice into its workflows, the intelligent automation platform applies built-in workflow logic to carry out mathematical verifications like checking the taxes and invoice ‘TOTAL’; checking for duplicates; verifying vendor details like name, contact information; and matching it to the Purchase Order (PO), and checking all header, footer, and line-item details based on business conditions. The system may apply workflow automation to cross-check invoice details against database records in a connected back-end like an ERP or document management system to guarantee the total validity of the invoice. During the validation phase, the accounts payable automation platform has built-in logic to differentiate between document types like a PO and non-PO based invoice, between an invoice and credit memo, etc. On separating PO based invoices from non-PO ones, the workflow automation logic then proceeds to perform 2-way or 3-way matching of PO-based invoices.
An invoice is automatically assigned by logic depending on whether it is with or without a purchase order. 2-way match verifies that purchase order and invoice details including the quantity and price match and are correct. The 3-way match involves tallying details on an invoice received from a vendor against the purchase order as well as the receipt of the goods received. Once the prices and units of products have been checked for 2-way match or 3-way match, the invoices with purchase orders are exported to an accounting system or ERP system. The intelligent automation platform automatically routes any exceptions during the validation process like duplicate invoices or missing invoice data to a verification manager for dispute resolution and approval. In the case of invoices that do not have an accompanying purchase order such as invoices for workmanship, a professional service, utility bills, etc. the intelligent automation platform automatically performs GL coding from the metadata extracted and assigns a workflow automation logic to each invoice based on defined business rules. Once the invoice is inputted into the system as per the business rules, it is automatically routed to a verification manager for approval. All approved invoices are exported to the accounting system or ERP system for further business use and archival. Again, any exceptions during invoice processing automation such as a mismatch of the invoice and purchase order details due to non-delivery of the complete order of goods, or a mistake in the invoice TOTAL, the intelligent automation platform automatically sends the invoice to the concerned verification manager in say, the purchasing department or even a warehouse to resolve the issue and approve the invoices. A single platform solution for intelligent document processing helps connect with vendors on a common chain where users can quickly verify with a vendor the state of an invoice.
Accounts payable automation software enables intelligent document processing of vendor invoices with little to no human intervention, making the process efficient. Arstyl’s intelligent process automation platform for AP invoice processing achieves an 80-85% first-time match for all incoming invoices, regardless of the document format they come in. Data entry is cut-down to almost 90% with human intervention mostly needed during exception resolution. Artsyl’s intelligent process automation platform employs machine learning as the primary technology for data extraction. Built-in capture logic enables Artsyl bots to capture all relevant data from invoices. In instances when the intelligent automation bots miss extracting some data, as is typically the case with invoices that have a new template format, Artsyl bots’ self-learning capabilities help. The bots learn human actions performed to keyin missed data from a new invoice the first time and apply that learning for the next time when they encounter an invoice document with a similar template. This way Artsyl bots add to the capture logic developed from new invoices, increasing their capacity to capture a wide range of document formats without human effort. Better control, visibility, and transparency is achieved along the invoice processing chain with accounts payable automation software.