What’s the next level of accounts payable (AP)? At Basware, we feel it’s a totally touchless invoice process. In two recent webinars, industry specialists discussed the current difficulties in AP and how they can reach a level of touchless invoice processing. This blog will recap the key takeaways from each session.
Challenges in AP and Procurement
There's an idea that all businesses are swimming in data. But the reality is that there is still a tremendous number of manual processes making data hard to decipher and organize. Invoice ingestion and reconciliation are places where there are still many manual processes. These areas slow down the invoice management process.
When you have a slow invoice management process, you lose the opportunity for discounts and start incurring penalties and late fees. These are all issues that stem from having a long, manual invoicing process.
Firms are also in different places within their ultimate automation journey. If we look at the accounts payable function, they tend to still have too much paper. Many AP departments have outsourced these paper processes to low-cost countries to try and forget about this issue, but this causes a lot of problems, particularly during the pandemic when inefficient operations were disrupted by lockdowns.
Typically, AP tends to lack deeper insights into the root causes behind some of these challenges. But at Basware, we think a little differently about AP - we believe in the goal of full automation. Meaning, if somebody has to touch or do any manual work related to an invoice, then the process is broken.
The Future is Digital
So, what does the future look like? The future is digital, moving away from paper checks and other paper versions of digital tools.
The future of AP is converged. It's the idea that categories like expense, procurement, payroll, corporate payments, reimbursements, and even benefits, can funnel to one location so that treasury can be brought into one viewpoint and allow your business leaders to get a complete 360-degree view of the company's expenditures and payments.
At Basware, think that the future is fully automated and totally touchless. Invoice ingestion, verification, approvals, and payment, all without human intervention. A lot of companies aren't there yet, but that is the future state.
Tackle Full Automation
There's a huge opportunity to eliminate some of the manual AP tasks using artificial intelligence (AI) and machine learning (ML). Here are just a few ways Basware tackles full automation:
- Business insights provide you with actionable insights into the root issues and causes within your processes. Examples include:
- It may tell you that a particular supplier is driving a high number of exceptions and by adjusting these things with the supplier, you can remove those exceptions from the process.
- It may tell you that by moving your invoice tolerances from $5 to $6 with a particular category or supplier, you can produce an 80% reduction of your exceptions.
- It may provide proactive information like spotting an invoice when it comes into the system and notifying you that based on historical data this invoice is likely to be paid late. This indicates that you can take steps at the beginning of the process to prevent this from happening, saving a lot of work downstream.
- Touchless technology, like Smart PDF, intelligently ingests all the data from PDF invoices (avoiding the use of OCR or manual processing) using AI and ML so that you can seamlessly validate invoices with accuracy up to the 90% - 95% range. This enables quicker and better data quality into the system – the foundation of automation. Other touchless technology includes:
- Auto-matching, which drives the best fit or line-level matching of POs and invoices.
- SmartCoding, which is a ML-based solution generating very accurate invoice coding proposals for your non-PO invoices. Through learned behaviors, SmartCoding intelligently proposes individual dimensions based on the invoice content and the extensive history of processes invoices making up the full coding proposal for the invoice with the correct cost center, the correct tax code, and the correct approval flows.
- Basware Services supports you and your teams to utilize technology to drive your business outcomes and realize the value of your solutions.
All of this is underpinned by artificial intelligence and machine learning technology with the main objective to drive the best possible business outcomes from your automation project.
Main Drivers of Modern AP
AP Automation is more than just creating faster processes. It’s also about making them easier to complete regardless of location. Due to events such as the pandemic, people began working from home overnight, driving the need to automate tasks and remove human interaction.
Another big driver is compliance. Mandates like the French invoice mandate coming in 2024, are forcing the adoption of invoicing and requiring quite complex and different compliance requirements across the world.
Governments, in general, are also putting in a lot of mandates. They're bringing in new initiatives, mandating the use of electronic invoice (e-invoice) practices. Additionally, everybody is carrying a “green mindset” when it comes to ESG initiatives, adding another dimension to government initiatives, government rules, and compliance.
Lastly, executive teams are turning to their organization to ask, “How can we automate in a way that has relatively quick time to value?” Instead of starting with a multi-year, complex project across several departments, consider AP automation as an early option to get a quick return on investment and quick gains.
Watch our webinars on-demand
We’ve only scratched the surface on the next level of AP discussion. If you want to listen in on what industry specialists had to say about touchless processing and related topics, watch theses on-demand webinars: The Future of Accounts Payable is Touchless and Totally Touchless – the Next Level AP.