Although accounts payable automation has traditionally been the domain of larger enterprises with significant financial and technological resources, this is no longer the case today. Companies of all sizes are realizing the crucial role that AP departments can play in the organisation’s financial success, turning to technology to increase efficiency and drive revenue throughout the organization.
In addressing today’s business challenges — and with an increasingly wide variety of AP management software options available — it’s no longer a question of whether or not you should automate AP processes; it’s a question of how.
First, let’s take a look at the core components of AP automation. These features might vary across different solutions, but the building blocks of AP management software are as follows:
- Invoice receipt
- Invoice management and workflow automation
- Electronic payments
- Reporting and analytics
- Supplier management
Emerging technologies in AP
Increasingly, emerging technologies — including artificial intelligence, machine learning, blockchain, and big data — are strengthening these components, according to the 2020 Levvel Research Payables Insight Report. Their application to AP is also becoming less abstract, with usage becoming so common that leading vendors have incorporated them in the core of their software, and basic providers at least have a plan for how they will use them in the future.
Here are the top three emerging technologies shaping the future of accounts payable and how they can help your organization turn AP into a profit centre.
1. Artificial Intelligence and Machine Learning
Developers design artificial intelligence (AI) to mimic a human’s ability to think and utilize logic. A subset of AI, machine learning (ML) improves on this process by “learning” patterns and habits, which allows the software to carry out and improve processes without explicit human instruction.
AI and ML are integral parts of AP automation and organizations use them in many different ways including detecting errors and discrepancies, intelligently matching items across purchase documents, and learning invoice and supplier habits to improve invoice capture and decrease human intervention.
In an advanced AP automation solution, for example, the invoice receipt component uses optical character recognition (OCR) paired with AI to intelligently fill in missing information into applicable invoice fields. It accomplishes this by using information from similar vendors and invoice formats to build an invoice pattern for an organization and invoice type. This ensures invoicing becomes increasingly accurate and requires less human intervention as time goes on.
2. Big data
Big data refers to datasets that are too large and complex for humans to extract significant conclusions from. Big data analytics is the application of AI and ML algorithms to these datasets to analyze and detect trends.
With AP’s unique insight into an organization’s working capital, the use of big data gives organizations unprecedented visibility — not only into its past performance, but also to predict future outcomes. In other words, big data makes predictive reporting and analytics possible, which gives business leaders actionable insights into their organizations. By integrating traditional statistical modelling with deep analysis of past information and trends, you can also make predictions to support future business decisions.
With advanced analytics tools, AP automation software offers internal benchmarking capabilities, drag-and-drop report building, and drill-down capabilities, allowing your organization to view a single set of data from multiple perspectives. These reports are invaluable in providing a holistic overview of your organization’s cash flow, helping AP leaders to identify spending trends, optimize spend policies, and improve efficiency.
In the context of AP, blockchain’s best application is to enable ePayments. Using decentralized, distributed ledger technology that lets users control and update information, blockchain is an effective way to securely and accurately keep track of information.
The “block” aspect refers to the singular action and the related information, while the “chain” is the public record system that links the actions together. Blockchain is appealing because you cannot alter or modify the blockchain after the event takes place, making it a secure, reliable source of truth.
While blockchain is still in the early adoption phase, many organizations are using it to increase the security of data and money transfers, facilitate connections among groups and individuals, and decrease latency in transfers between parties.
The state of AP automation today
While the true impact of these emerging technologies will only be felt in the years ahead, organizations that do prioritize technology usage say it helps create a competitive edge, with AP automation credited as having a direct and positive impact to their financial health.
With AP automation, organiSations surveyed in the Levvel report said they were able to accelerate approval cycles, increase employee productivity, reduce late-payment penalties, and lower overall invoice processing costs. Automating AP processes also provides residual and strategic benefits such as improving supplier relationships, simplifying audits, and reducing fraud and duplicate payments.
This article originally appeared on Hyland.com. Inpute are proud to be a partner of Hyland.
If you’d like to discuss how AP Automation can improve your organisation efficiencies get in touch today by emailing firstname.lastname@example.org.