Is your business treating invoice processing as an unavoidable cost of doing business (pun intended!)? You don’t have to when you use accounting process automation!
When seemingly mundane activities are not optimized using intelligent invoice processing automation, you could be leaking significant dollars without even realizing it. Interestingly, it is such tasks that can be transformed to be not only effortless but also provide deep insights into your fund management.
Any opportunity to improve business processes and create bandwidth for other critical activities – especially during the current economic conditions – is valuable and worth pursuing. Manual effort spent on repetitive administrative tasks like managing invoices results in a significant waste of time, effort and money. Studies show that Accounts Payable automation software can reduce invoice processing costs by 90 percent. 1
It is common for large enterprises to interact with thousands of vendors and pay thousands of invoices per year. Most organizations still require a great deal of manual intervention to manage various aspects of invoice processing even after implementing RPA to automate the process.
How Do Businesses Currently Capture Invoice Data?
Large enterprises receive thousands of invoices every month from numerous vendors, each in a different format. Many suppliers still present their invoices via paper or as a PDF attachment in an email. These delivery methods require a great deal of manual processing, including scanning, data verification, and exception management. The goal of every organization is to get to a point where their Accounts Payable teams can perform end-to-end touchless invoice processing.
An invoice goes through several stages of scrutiny before it gets paid by the account payables department. The dedicated teams that handle invoice processing manually feed the data into enterprise workflow tools like SAP and similar ERP applications to ease the orchestration of invoice processing, including routing the data for multiple scrutiny checks, approval and validation for payment.
Potential Invoice Processing Concerns in Today’s Scenario
A majority of the invoices today are electronically processed where a vendor uploads the invoice on a supplier portal of the organization. Internal systems like SAP have integrated automated invoice processing solutions to manage the invoice data electronically. However, many vendors don’t adhere to the submission process through a supplier portal and end up sending the invoices directly via email. Even invoices submitted electronically are not standard and the same vendor may regularly change formats and fields.
Larger enterprises have teams to manually sort all the invoices, create the invoices in the system, validate the details across the ERP and GRN (Goods Receipt Number) systems and transfer the entries into the SAP system for further processing and approval.
The to-and-fro communication between the business and the finance team for validation and the overhead efforts to perform a match between a number of invoices and associated business units included in the delivery of goods makes it difficult in many cases to validate a one-one match between the purchase order to a goods receipt.
For delivery of services, there is no concept of a GRN. In such cases, the invoice process goes through additional approval. It requires human intervention to route the invoices for the required approval, which further increases manual input.
Manual processing can result in high processing costs, increased risk, process and accounting errors, duplicate and late payments. According to AQPCs 2018 survey2 of 1,480 organizations reporting data on the cost to process an invoice, the bottom 25% are spending $10 or more per invoice processed. The median cost to process an invoice was $5.83.
The Challenges of using RPA for Invoice Processing in Accounts Payable Automation
- With the advent of RPA, automation of invoice processing was done based on fixed invoice templates or rules. With the number of vendors increasing, it was difficult to train the automation tasks to handle frequent changes in invoice templates.
- As organizations added new vendors and invoice formats, the RPA system failed to handle the process due to a lack of cognitive ability or flexibility to understand different formats, and an inability to adapt to new features.
- RPA solutions were also weak in ensuring the accuracy of data validation owing to the inability to perform 3-way match in the invoice validation and business rule enforcement throughout the invoice process.
- RPA solutions were not able to handle exception cues or provide many analytic insights of invoice status, improving cashflow or reducing processing costs.
Every touch to an invoice increases costs associated with processing the invoice and accuracy in handling and payments.
Accounting Process Automation for Touchless Invoice Processing
Our Automated Invoice Processing HyperApp with integrated Artificial Intelligence and Machine Learning capabilities can exercise full control over Supplier Portal customizations to ease supplier onboarding and invoice management. It has the built-in cognitive ability to handle complex invoice formats and create templates for new invoices.
Equipped with a powerful validation engine, the validation process is dealt with ahead of ERP processes to avoid downstream updates in the ERP system minimizing errors. The accounting process automation platform allows faster implementation of configurable workflows for new suppliers, product lines or invoices. The potential to provide powerful data analytic features gives the competitive edge for Accounts Payable automation.
JIFFY.ai’s Automated Invoice Processing HyperApp is truly touchless in every sense. Our customers reported significant improvement in straight-through invoice processing, 90% improvement in invoice processing turnaround times and more than 85% efficiency improvement after implementation.
Accelerate your automation journey with JIFFY.ai’s low-code platform.
Achieve end-to-end business process automation. Accurately. Easily. Quickly.
Email us at marketing@jiffy.ai
References
1https://www.industryweek.com/finance/article/22010161/the-cost-of-paperbased-invoicing