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Document AI for invoice processing: Key benefits to consider

September 6, 2022 - Team EdgeVerve

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Today, technologies like Automation and Artificial Intelligence are no longer a figment of imagination. Companies are finding ways to onboard similar intelligent solutions to expand operational efficiencies and employee productivity. Document AI is one example where machines are trained to simulate human review of documents using various AI capabilities like Machine Learning and Natural Language Processing.

These tech-based solutions are gradually infiltrating nearly every industry, every sector, every niche, and every operation with their wider applications, invoice processing being one of them. AI invoice processing can be a game-changer if incorporated on time. But the question remains – where are we with AI and Automation?

Document AI for invoice processing: A reality or a concept in the making?

Enterprises are turning to smart digital solutions to go paperless to meet ongoing preferences. Such moves are incredibly beneficial for accounts payable teams as they have to handle bulk paperwork and intricate approval procedures while processing company invoices. Moreover, most of the tasks are repetitive in nature, which can be automated with advanced technologies such as Document AI. It can be the ideal bet to eliminate inefficiencies or errors usually connected with manual work, while increasing accuracy and avoiding payment delays.

However, the reality is far from the truth.

Typically, the accounts payable department processes over 1000 invoices per month, most of which are received via fax. So much for the paperless office concept, which remains a myth for many enterprises even today. And one minor error while adding specifics on the invoice can easily cost them their jobs and their company’s reputation. The chances of human errors are always high with any manual method, exclusively for invoice processing, not to mention the loss of untapped opportunities for the company.

And there are greater risks to consider.

The proportions of financial fraud remain high – concentrated in four departments

According to reports, nearly half of reported thefts and embezzlement happen within four departments that handle invoices, payroll, financial statements, and sales forecasts. In most cases, employees conceal theft, with a staggering 32% attempting to alter physical documents while 39% create fraudulent physical documents.1

The accounts payable department is the most vulnerable department in an organization, often targeted by scams. Embezzlement of cash, fraudulent payments, and financial statement manipulation are just a handful of examples. With paper-based invoices, the chances of such fraudulent activities remain high always.  They can vary from false billing to over billing and overpayments.

Contrarily, an automated invoice processing software solution offers preventive measures to mitigate accounts payable fraud.

How does Document AI prevent fraudulent invoice processing?

Automated invoice review: The function of matching key documents generated across the procurement stages has a fair chance of preventing employee fraud. It covers comparing invoice line-item information with purchase order details and reviewing receipts to ensure goods and services have been delivered. This approach, however, can take days when executed manually. With Document AI, the entire cycle completes in just minutes.

Vendor match capability: At times, invoices are generated by fake vendors, which are difficult to track when human hands are involved. But detecting them at the initial stages can curb any possible damage to the company. AI invoice processing allows systems to scan multiple repositories, existing vendor databases, and various documents to detect fakes.

Monitor and track employee actions: Usually, employees responsible for accounts payable frauds operate as individuals or small groups. But Document AI offers ML-based anomaly detection capability to track and monitor employee engagements in the Accounts Payable process in real-time and thwart malicious behavior.

Automated approval workflow: Automated approval workflows address the time-intensive factor inherent in manual approval processes. It ensures compliance and leaves a digital trail of the actions performed across each stage. This can certainly help mitigate the risk of malicious intent.

Enforced compliance: Digitally improving the entire invoice processing workflow can curb Accounts Payable fraud. It calibrates actions with time stamps and personas, later used for system audits. Systems similar to Document AI auto-generate reports, where employee activities are traced, and areas of improvement are identified. Further, real-time alerts provide empirical insights into process operations.

Other benefits of Document AI for invoice processing:

Key takeaways

Fraudulent acts surrounding accounts payable will continue to evolve; so will the solutions. However, most organizations are trying to embrace digital solutions and simplify the intricate system of invoice processing. Paper invoices still retain their premier positions, but they are gradually stepping aside for definite reasons, environmental, fraud, or otherwise.

And Document AI is filling the gap as the intelligent alternative to automate invoice generation and effectively deal with error, time, and labor-intensive factors. AI invoice processing is the best bet to prevent chances of strained relationships between partners from missed, delayed, or double payments.

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