How to leverage AI for efficient AP invoice processing

Businesses, of all shapes and sizes, are consistently searching for new and innovative ways to create efficiency in their processes and workflows. The finance team (including both the Accounts Receivable, AR, and the Accounts Payable, AP, functions), can become a key focus area.

Particularly in terms of AP invoice processing, this function is a known cost centre for any business. Therefore, if there are ways an organisation can reduce the impact of these costs, then they should implement them. This is where AP automation solutions have played a vital role.

Whilst there are plenty of AP automation solutions to choose from, not all are equal. The technology of any given Accounts Payable automation solution could be different from another. AP automation vendors could provide Accounts Payable solutions that use OCR technology, AI and machine learning, or a combination of both.

To ensure that a business sees the level of efficiency and ROI that they desire, their digital transformation and finance teams will need to work together to find the most suitable AP solution.

This blog has been created to offer guidance on what technology to look for (and what to avoid) in automated Accounts Payable solutions.

Legacy Accounts Payable solutions rely heavily on OCR, as opposed to more sophisticated technologies that optimise automated AP processing.

OCR stands for Optical Character Recognition. OCR works by extracting and converting data from scanned documents into machine-readable text.

In theory, OCR technology should eliminate the need for manual data entry by a clerk, from invoice documents into business systems. This is because OCR technology creates an electronic version of an invoice, which is digitally editable and searchable. This digital invoice data can then be automatically transferred and populate specific fields within a database, spreadsheet, or AP system.

Whilst OCR AP automation does sound beneficial, it is based on outdated technology. The main downfall with OCR technology in AP processing is that it is unable to determine incorrect data. For example, OCR would still capture and automate the processing of an invoice with incorrect pricing on it. In many cases, the use of pure OCR AP automation solutions still means a high likelihood of manual intervention.

Despite its benefits for AP processing, OCR alone will not cut it in terms of efficiency and ROI. Therefore, in order to future-proof the AP process flow, businesses need to consider a combination of more sophisticated technologies that will enable complete AP invoice automation. This is where AI and ML come in!

AI stands for Artificial Intelligence. Under the AI umbrella, there are two main categories, known as; General AI and Narrow AI.

General AI is the strongest type of AI and is aptly also known as Strong AI. This highly sophisticated artificial intelligence is closest to human intelligence. Therefore, strong AI capability can determine, learn, and complete actions without any human intervention.

Narrow AI describes the artificial intelligence that handles a specific or limited task. This type of AI lends itself very well to the automation of invoice processing.

Machine Learning (ML) can also be considered as a subset of AI. ML uses data and algorithms to identify patterns, learn and make decisions with minimal human intervention.

Transalis recognises that there can be a lot of confusion when searching for the right automated accounts payable solution for a business. Especially as more advanced technologies become accessible, it is important to implement a future-proof digital transformation strategy. This includes implementing an AP automation solution that is able to grow and adapt as your business grows. Transalis AP Automation helps achieve exactly this…

Transalis AP Automation harnesses machine learning technology to accurately capture, separate, extract, map and validate invoice data to transform any document format into a fully digital invoice compatible with the chosen business system. Manual rekeying of invoice data is no more with a fully automated process facilitated by an AP automation workflow. This system even automatically flags up any format and validation rejections that need to be reviewed and corrected, these changes are then learned by the system for future reference.

Top AP automation benefits include;

Our automated AP solution is scalable as it is based on a volume model. This means that as your business grows and the number of invoices you need to process on a monthly basis increases, Transalis AP Automation can continue to provide you with the process automation you need. Discover your savings with our helpful AP Automation calculator.