Automation is the need of the hour for all types of enterprises. Whether you are in the finance industry or the manufacturing space, some level of automation is a must for your enterprise. With advancements in technologies and business processes, AI in accounts payable is an emerging trend of automation that enables your enterprises’ finance and accounts departments to streamline their processes.
Automation in accounts payable by leveraging artificial intelligence is a solution that makes the enterprise less reliant on manual labour, reduces errors such as duplicate invoices, fraud, and payment discounts and also helps to build rapport with vendors as payments are made on time. Employees and suppliers benefit from AP Invoice automation as processes are faster and employees can pay more attention to core business activities.
AI in accounts payable is not just about data extraction but end-to-end document processing. This means that from identification and classification to getting the data stored on the backend, artificial intelligence, along with machine learning and other technologies, can execute this highly effectively. We will now take a look at applications of AI in accounts payable.
AI in Accounts Payable: Applications
Automating Repetitive Tasks
The accounts payable team has to handle many manual tasks on daily basis. Some of them barely require human judgement as it has a rule-based structure to follow. Examples of repetitive tasks are invoice routing, invoice filling, matching invoices to supplemental documents and data entry-related tasks. The above-mentioned tasks can be automated by using artificial intelligence in accounts payable systems.
Algorithms enabled with machine learning systems can support business rules like:
- Identification and extraction of data from documents,
- Inputted data in the required documents,
- Linking data for exceptions resolutions
- Sending documents to the required personnel for exception handling and validation purposes.
Sorting of documents that are sent with invoices
Invoices are bundled up with different documents like contracts, recipients’ invoices, credit notes or payment reminders. Combining Optical Character Recognition (OCR), Natural Language Processing (NLP), and machine learning, enables the extraction of relevant data, contextual understanding of the text and categorising these documents. Automation of such a process enables businesses to convert physical documents to digital systems and ease search functionality in the system.
Forecasts with balance-sheet
Forecasting upcoming revenue and expenses are critical for an enterprise’s financial planning. Accounts payable balance sheet entries are connected to data from operations and cash cycles. AI-powered analytics helps enterprises to balance their firm’s cash flow based on previous historical data.
Fraud actions are a threat to any and all types of organizations. Accounts payable fraud is arguably the most attempted form of fraud that takes place. Fake invoices are submitted as proof of payments which at times has no association with any real vendor. There are various types of fraud that can take place. Some of them are:
Invoice Fraud: This involves someone who sends an invoice pretending to be one of your vendors or suppliers. This invoice has the bank account details of the fraudster.
Billing Scheme: This fraud type leads to the generation of fake payments that are paid to themselves.
Cheque Fraud: Cheque fraud means that a person or an entity is attempting to make a transaction with a cheque that is either altered, invalid, stolen or has been manipulated.
Reimbursements of Expenses: This is a fraud payment scheme wherein an employee fakes or exaggerates a business expense. It can occur as an overstated expense, fictitious expense, mischaracterized expense or even double claims.
Automated Clearing House Fraud: This type of fraud involves the unauthorized transfer of funds that happens in a bank account
Kickback Schemes: This is a type of bribery where a commission is paid to the person taking the bribe for the services that are being rendered.
Artificial intelligence has the ability to analyse patterns in invoices and similar document types. This is to understand the non-standard behaviour that might indicate fraudulent documents. Once the artificial intelligence detects such fraud, it will flag these transactions and notify the key decision-makers. Best practices are followed by the system to ensure that changes in payment details can alert the companies at the right time and save them from fraud taking place.
Identification of errors
Errors made by humans are one of the most common issues faced with accounts payable. Human-made errors can cause huge sums of losses that can be easily preventable if they are checked and rectified on time. Misplaced invoices, duplication of data, and poor data entry are some of the many types of errors that occur. AI in accounts payable helps to tackle these issues and to ensure that such invoice errors and duplicate payments do not take place.
AI in accounts payable is required to save your company from making unexpected losses and ensure the processes are streamlined. They are barely any downsides to adopting an AI-enabled document processing solution. KlearStack AI leverages state-of-the-art AI technologies to extract data with high accuracy and process documents from end to end. Click here if you wish to learn more about KlearStack AI.