AI in Accounts Payable: How AI is Changing The Accounts Payable Game

In the ever-evolving landscape of finance, the only constant that remains is the pursuit of efficiency and accuracy. For CFOs and finance leaders, this has often led to a never-ending quest to streamline processes, reduce costs, and enhance the bottom line. Enter Artificial Intelligence (AI), the transformative force that is reshaping the very foundation of the finance world.

In today's digital age, the Accounts Payable (AP) function stands at the forefront of this digital revolution. Gone are the days of manual data entry, paper invoices, and the seemingly endless cycle of chasing approvals and reconciling discrepancies. Instead, AI is ushering in an era of unparalleled automation, insights, and control over financial operations, and in particular, the accounts payable process.

Let’s delve into how AI is rewriting the future of accounts payable. 

Extract invoice-level details with precision

OCR is optical character recognition, a technology that converts the image of a text into a machine-readable format. In the AP process, this can be simply put as the digitisation of invoices. This lies at the heart of the process since it all begins with capturing the invoice details accurately.

Contrary to conventional OCR that uses rule-based algorithms for recognising characters, AI-powered OCR leverages machine learning technology and ensures that the data is auto-populated into the required fields. And that’s not all. Inconsistencies in OCR get taken care of with an AI-enrichment engine. Further, machine-learning capabilities provide an understanding of how to assign suitable general ledger codes, drawing insights from previous, similar invoices.

A tool that could instantly extract essential information from invoices, such as vendor details, invoice amounts, and due dates, with much more speed and precision, would definitely be worth the “wait” in gold! Isn’t it?

Speedily reconcile invoice data against POs and GRNs, input tax credit

Once the invoice details are captured, the data is then reconciled using AI-based matching with the corresponding Purchase Order (PO) and Goods Receipt Note (GRN), all with the click of a button. AI-based reconciliations are also a game-changer when it comes to matching vendor invoices with the input tax credit available on the GST portal for accurate GST return filing. This is the biggest need of the hour in the wake of the government's newest initiative - automated return scrutiny. 

Never miss a payment deadline

AI can align invoices with the contract terms, and send a prompt once an invoice is nearing the due date for payment, ensuring timely payment processing to qualify for early-payment benefits. Paying invoices on time also helps businesses stay clear of late fees and helps maintain good vendor relationships, which only contribute to improved terms in the future. 

Risk of fake invoices? AI has got you covered

When you’re dealing with multiple vendors and loads of invoices, there is always a risk of fraud. And if your system isn’t competent enough to tell a genuine invoice from a fake, you’re obviously prone to monetary losses. An AI-backed AP process can easily detect patterns indicative of fraudulent activity and flag them, thus preventing financial losses.

In-depth insights for critical financial decisions

AI can analyse historical invoice payment data and predict future cash flow trends. This enables organisations to optimise their cash management, plan for upcoming expenses, and make informed financial decisions. It can even track the time it takes to process invoices, identify bottlenecks, and suggest improvements. This helps streamline the AP workflow, reduce processing times, and improve efficiency.

There is no dearth of what all AI can help with, such as on-time delivery, accuracy of invoices, and quality of goods or services. It can also provide data-driven insights on vendor pricing. This data can further form the basis of vendor selection and negotiation strategies.

As businesses leverage these capabilities, AP is now increasingly being seen as a strategic function rather than solely a cost centre. Though AP may not have traditionally been associated with cutting-edge technology, the integration of automation and artificial intelligence heralds a remarkable opportunity to transform AP into a central repository of vital information. This transformation is driven by the pursuit of elevated business efficiency and profitability. The wealth of intelligence within AP's grasp is pivotal in realising an organisation's core goals, encompassing heightened profitability, streamlined operational efficiency, and fortified agility.

From procurement to invoice processing, fraud detection, vendor payments, and everything in between, AI is not just changing the accounts payable game—it's revolutionising it. So, fasten your seatbelts as we steer ahead, because the future of AP has arrived, and it's AI-powered!

If you would like to explore how AI-driven technology can streamline your enterprise's accounts payable process, enhance working capital visibility, and improve process quality by 10x, then please click on the link below. Our experts would love to walk you through Clear AP - India’s first AI-powered AP engine.

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