One of the biggest challenges of any organization’s Accounts Payable (AP) process is capturing, extracting, and processing data from the invoices, especially when the format varies from document to document. Against this backdrop, businesses create customized solutions to resolve this issue. Yet, the companies struggle to keep the momentum and pull off the anticipated invoice-linked business value.
However, there is a way out of everything, which is the case with this challenge. With the technologies evolving every few years, new tools can harness the dynamics of Artificial Intelligence (AI) to identify not just one kind of invoice but all types of invoices in every format. Fascinated by the benefits of AI, many organizations have realized the urgent requirement of AI invoice processing to address the challenges of traditional AP processing.
Invoice processing is the process of receiving, logging, and transmitting supplier invoices and making payments. This complete procedure is overseen through subsequent steps that the AP unit is liable for, from data capture to payment.
Irrespective of the format of the invoice, the data it comprises must be recorded in the general ledger of the organization’s ERP or accounting system. Therefore, invoice processing is a significant element of the procure-to-pay procedure as the final step of any business procurement activity. Once AI technology is applied in invoice processing, it is known as AI invoice processing or automated invoice processing.
There are various challenges of traditional invoice processing out of which two significant ones are highlighted below:
Compound invoice data prone to errors
Many companies get the invoices from various suppliers through diverse channels such as image files via emails, PDFs, and XML documents from Electronic Data Interchange (EDI). Processing all these invoices within a unified system requires a lot of time and manual effort. However, this time-consuming effort can lead to errors and further possible lapses like processing wrong amounts, clearing payments of the same invoice twice, and duplicating invoices.
Expense per invoice processing
Even now, the current invoice processing practice is mainly done manually with all the costs, such as postage, paper, manual hours, and fixing the accurate price of manual invoice processing. Besides this, other hidden costs include late fees, missed early payment discounts, and accounting inaccuracies.
Some other challenges are:
AI-based invoice processing can automate the data capture and the processing via the below steps:
Quicker invoice clearing: With the solutions getting smarter day by day, invoices from the supplier need lesser time to process the automated invoice processing system identifies the processes quickly without any human intervention. So, the turnaround time for invoice clearance is less than the earlier processing methods.
Accurate data: Artificial Intelligence and Machine Learning recognize and capture the data by executing neural networks to enhance its understanding and capabilities with each business process document. In contrast to the human data work, invoice processing using ai nullifies the threats of committing errors in repetitive tasks due to the exhaustion factor of the employees.
Enhanced productivity: AI and ML have become the essential touch-point solutions for every organization. As a result, every industry has commenced implementing automated invoice processing software to cut down task completion time. Consequently, the accounts payable staff can move towards the more value-added activities mentioned below.
Increased profit margins: Early or on-time invoice clearance leads to initial payment rebates from the suppliers, thus increasing the companies’ profit margins.
Although AI-enabled invoice processing has transformed the payment dynamics across industries, enterprises are still globally in the nascent stages of leveraging AI for invoice processing.
Subsequently, the implementation of AI invoice processing will increase enterprises realizing the advantages of automated invoices, including minimized costs and errors, quicker payments, and streamlined processes. Hence, this will not only lead to B2B efficiency but also leap forward toward cross-border payments and heightened market competitiveness.
Therefore, explore XtractEdge solutions and harness the power of automating your processes and extracting intelligence from your unstructured invoice documents.