Technology serves a variety of purposes and means different things to different people and industries. In today’s world, technology can be found at every corner. The use of AI in organizations, governments, security frameworks, energy, and natural resource management, etc., is drastically on the rise. Although AI advancement levels and use may differ substantially from one geographical region to the other, clear indicators are pointing to the fact that more people are acknowledging the solutions that the technology brings. Still, there are some sectors where technology hasn't touched. One such is invoice processing. We still perform works manually. Our organizations receive paper invoices, PDF, or other electronic data. The invoice must either be scanned or manually entered into the ERP system. Performing those stuffs manually consumes more time and employees. It may consume the profit of the organization. In today’s modern business its a surprising fact that suppliers are still sending paper invoices. In some regions of the world, paper mail is still the most common invoicing method. They don't even search for or not even tried for a better option. Even though some inventions or technologies can process invoices with more accuracy and less time, it is not yet used or experienced by big firms. But this does not mean the team needs are stuck with paper stacks on their desks and late-night shifts of manual data entry. If we are evaluating the overall application of technology in an organization then these invoices can be a drawback. We move forward with technology so making use of efficiency is important in every industry. Best-in-class AP teams leverage modern technology to remove these manual steps from their AP process so that they never need to see a paper invoice again.
To get rid of the papers, there are technology applications introduced in the market for invoice scanning and data capture. This will help us to transform paper invoices or any other invoice format such as pdf and e-invoices into data in a unified digital format. The important invoice information is captured using intelligent technology and pre-configured business logic.
Time and cost are two concerning factors of an organization. Handling paper invoices in a manual process that is time-consuming and full of risks for errors that may hurt our business in multiple ways. There can be errors while entering data in financial books or reports while it can affect the whole financial flow. Lost or misplaced invoices can also happen since they are done manually.
Every company needs invoices to function correctly, and any update to the workflow in this area can have a significant impact. Artificial Intelligence has the potential to create new experiences and revolutionize billing automation and finance management. But one of the challenges is to keep those digital data more automated and efficient. Most of the time, the invoice is prepared and processed manually or semi-automatically by the receiving company. Of course, AI has its solution. AI can impact this process in three ways - digitizing the underlying documents and producing the invoice, extracting data, and filling in data.
process is, When an invoice is received it can be of two ways either it will be in a piece of paper or it will be digitalized. If it’s on paper, it must be scanned and introduced into the system. If it was already digital, it is passed on to the analyzer. Without considering the document's format whether it is PDF or image, the first step is optical character recognition by finding patterns, AI can run it more efficiently. In the case of intelligent invoice processing, the OCR should be fine-tuned to identify not only the letters and numbers but the structure of the invoice, like the header, usually including the sender’s identification data, and the footer, where safety elements are present. Since not all are created equally, the software must be able to show back the human skills of recognizing mandatory fields correctly. AI requires sufficient historical data to learn from. This translates to the need of having past invoices to use as examples so that the algorithm learns about the fields. If all the invoices are of the same format it is easy to perform these applications more easily.
Once the invoice is in a legible form, the algorithm extracts and validates the data fields. Depending on the accuracy of the OCR, this step might need further validation from a person or an embedded cross-checking tool. Processing received invoices can optimize a lot in the accounting process, but in the best-case scenario, the entire activity is automated, including invoice generation. Right now, most companies use a semi-automated solution for electronic invoicing based on XML schemas or Excel macros.
AI can take this a step further and complete at least some of the fields in the invoice, starting with general information such as the company’s details, cost center, tax codes, amounts and more. If the vendor and the buyer have integrated systems, this can be done easier. One dilemma that people have is that when these technologies arise accountants, executives will lose their job. But its a fact that manpower will be less and machine power will be high. However, the best system doesn’t put the accountant out of their job, since they need to validate the invoices before sending or registering them. The final validation should be done by human power.
1) Goodbye to Late Fees When you’re processing paper invoices manually, it’s very easy to fall behind or misplace an invoice. We will have invoices coming in on paper, by fax, through email, and a whole bunch of different electronic formats. A system like that doesn’t make it easy to process invoices quickly. We accept the information and do it manually. Keeping all those different invoices straight and making sure we get all the data entered correctly takes up huge amounts of time. Before knowing it, we’ve fallen behind on payments and have to pay a late fee on top of the amount of the invoice. One benefit of an invoice payment automation system is that AP software helps you save money by making our payments on time. This is a two-fold process. First, the automation system keeps track of the invoices that are due first so they’ll get paid first. Next, the system speeds up automation so there’s no danger of things getting so bogged-down that we miss the payment due date. Now, we will get our invoices paid on time every time.
2) Quick payment results in discounts Keeping better track of payment deadlines and speeding up invoice processing doesn’t just help you avoid late fees. It also means you can take advantage of early payment discounts. Businesses are always looking for more ways to save money and this is one that often gets overlooked. Getting gain is the goal of every business. Making use of technologies will increase those features. Our suppliers benefit from getting the money for their goods promptly. If you ask, some vendors will offer discounts if you can provide payment earlier than their other customers. These discounts can save your company quite a bit of money in the long run. In companies with a manual accounts payable process, it’s rarely realistic to commit to making early payments. You don’t want to risk falling behind and damaging your relationship with suppliers. But accounts payable automation puts those discounts within easy reach.
3) Keep valuable relationship with Vendors and Suppliers Keeping a happy relationship with vendors, suppliers, contractors, and other people is not so easy. If it is going smoothly it is a good business sense. Faster invoice processing means they get paid sooner, which is always good for improving relationships. If the paper works are assuming our time then we can't pay or beats the needs and contracts of dealers. Depending on which industry you're in, whether or not you have reliable suppliers filling your orders can make or break your business. It’s best to keep them happy. Invoice auto-processing software can also improve your customer service. With the help of some software, we can set up a vendors’ portal to let the suppliers check on their own invoices’ status. They won’t have to take the time to pick up the phone and call your accounts payable department hoping someone will be available to answer their questions on time. When you automate your accounts payable and speed up invoice processing, you’re making things easier for the people your company does business with as well as your employees. In this system, they get more convenient answers and faster payments and you’ll have fewer calls to deal with.
4) Enhance cash flow Faster invoice processing gives you up-to-date information about where your money is. With automation, you’ll have access to more accurate reports and more complete information than is possible with a paper-based system. Automation gives you access to real-time reports from the accounts payable department. The difference that an automated invoice processing system makes in this area is hugely significant. The data you’re getting about your cash flow is more accurate, more complete, and much easier to access. And accounts payable automation’s benefits go beyond making data easier to see and use. Automation also improves accounting accuracy and reduces or eliminates money lost to errors like duplicate invoices. Plus, it includes customization controls so you can automatically enforce company policy regarding cash flow. And all those savings are in addition to the fact that automation reduces the processing cost per invoice and lets you save money by taking advantage of early payment discounts and avoiding late fees.
5) Limited workload with employees Automated invoice processing means your employees in the accounts payable department have time for things other than routine paperwork. No more manual filing, data entry, and invoice payments. They’ll still have to process exceptions invoices, but not many. Typically, you can get up to 90% of invoices processing on their own with automation software. Now accounts payable employees will have plenty of time to process exceptions invoices quickly. Plus, the tools that make auto-processing work so well are available to your employees when they handle the exceptions invoices. And having the right tools for that job makes a huge difference. Automation also helps with customer service. The AP automation systems that include a vendor self-service portal are just as good for your employees as they are for your vendors. Reducing the number of customer service requests that come into the accounts payable department makes a big difference in how AP employees can spend their time. With fewer tedious tasks to deal with, your employees will have a chance to focus on more important projects. And that has the added benefit of keeping them more engaged.
It is the responsibility of the industries to propose the invoice processing in their firms. We can expect that as AI for invoice processing advances to have more features, including fraud detection possibilities, predictive spending patterns, and auditing expenditure. As previously described, the opportunities to use AI for invoices are practically endless: from clearing invoice payments and prioritizing them based on a set of internal rules to assessing financial and bankruptcy risks by looking at the balance.