Accounts Payable is one of the most vital processes across industries. The amount of time organizations take to manage the workflow due to multiple data points, sources of information, multiple invoice formats, and touchpoints can be massive. Automating the entire process can help streamline the process by leveraging business intelligence. Further, it reduces the time for receiving, processing and paying invoices by identifying the critical information and eliminating manual tasks.
An average business has 24% of its monthly revenue held up in terms of trade credit in the US. Consequently, it offers a huge opportunity to utilize smarter processing solutions to keep accounts payable updated. Automating the AP processes with an IDP solution can be beneficial here.
This article will give an overview of how automation in AP works and how it can improve your accounting process. So without waiting further, let’s delve into it.
Accounts Payable cycle – The lifeline of business operations
In simple terms, Accounts Payable are the records of financial transactions that contain detailed information regarding a company’s purchases. This department deals with orders, invoices, and other checks regularly to record the financial liabilities of a company.
Usually, a standard AP process has some basic workflow — identifying all the vendors and determining their payment terms aligning with the purchase orders. After fulfilling the purchase orders and receipt of invoices, the accounts department then makes the payments according to the agreed timeline. However, the entire process is often manual, making it prone to errors. Further, it may need more critical information and consistency in document formats or sources, making the process inadequate for auditing.
Automating your AP process might be the key to all these issues. It offers better management of invoices, purchase orders, and other financial documents and makes the entire process smoother.
Why do Finance and Accounts need intelligent automation?
The digital-first ecosystem has made several redundant tasks easier for executives. A business can have data on purchase orders, payment records, accounts payable reconciliations, and vendor information readily available on its system. However, managing the invoices received, usually in unstructured formats, might be a challenge to become efficient. Automating the process can seamlessly increase efficiency, reduce errors, and allow an audit trail with a few clicks. Further, it helps in having holistic insights into the company’s financial transactions without requiring additional manual efforts.
An automated accounts payable is set up by identifying the vendors and tracking accounts that have regular transactions with the company. Next, it needs to index and extract the relevant information from the documents and manage the payments. Companies having a manual system can find the effort tedious and prone to human errors due to multiple stakeholders, layers or permissions, and chances of incorrect inputs. Automating the process makes all of these almost nonexistent and improves the process’s efficiency and accuracy.
How intelligent automation in Accounts Payable works
An automated AP processing solutions uses AI and ML as the core of its system. It leverages several technologies, such as OCR, computer vision, and intelligent document processing, to cut down redundant and manual tasks to make the process seamless.
These technologies can help detect information from multiple documents, digitize them, and extract relevant information according to the companies’ requirements or the preset business rules. Further, it can capture the required data from templateless formats and present it in a coherent way, allowing automation of the entire process without requiring human intervention.
DocVu.AI, a leading enterprise-grade intelligent document processing, helps you simplify your accounts payable process in a few steps. These are:
- Pre-processing of documents – Selection and classification of documents according to multiple attributes.
- Data extraction – Extraction of relevant information into electronic form according to the data fields and importing them into the processing system using automation to reduce human errors.
- Data validation and Quality Checks – Reviewing and rechecking the extracted data for accuracy and validating them for recapturing missing data fields or further processing.
Ideal AP automation system requirements
Automating your accounts payable system helps businesses manage the entire process without any human intervention, resulting in more accurate and efficient settlements of accounts. It considers multiple document formats across vendors and leverages an intelligent machine-learning model to understand the data points better to extract relevant information. Further, it makes the entire process extremely fast as multiple to and fro between stakeholders becomes less and requires no manual cross-checks for errors.
DocVu.AI helps companies leverage their document processing system to become flexible and scale their invoice processing as needed. It offers straight-through processing of accounts payable with customized business rules engines to offer bulk processing of documents with greater efficiency.
In a world that is fast adopting tech-based solutions, it is prudent to explore certain advancements and realign business processes according to your requirements. Realizing the need for automation in processing your accounts payable can be one such necessary transformation. Automating AP using an IDP solution helps you save time, improve efficiency, and offer more accurate processing without multiple approvals due to the embedded machine learning models.
If you are looking to consider IDP implementation to streamline your accounts payable process. Contact us today to learn more and schedule a demo. https://www.docvu.ai/industry/finance-accounting/