Accounts Payable Automation an easy win for many companies
All accounting procedures, especially remittance and AR/AP processing, are critical to any organisation’s financial well-being. Manual data entry of invoices is an inefficient, expensive, labour-intensive and often error-prone process. Slow and mistake-laden document processing lengthens payment cycles, reduces staff productivity, adds late payment penalties and causes missed early payment discounts. Additionally, it can also be difficult to track the status of these documents in real-time when they are not automated. These challenges can put your company’s rating and regulatory compliance at risk, increase missed opportunities and create unnecessary penalties.
Identifying documents or forms is not a new technology, rather it is a well-known and best practice approach in DMS projects. Most relate forms recognition to questionnaires or application forms. These are fine for structured forms, where the document structure is predictable. There are of course projects that demand free form recognition. These documents cannot be identified via appearance influenced layout. The only way to find the business-critical data is to search for key-value entries.
One of the most common use cases is invoice recognition and automation. Every company receives invoices and needs to book these into an accounts payable solution. This process is very time-consuming on the data entry side, especially if you add in the need to match line items. The need for automating processes is the natural progression in one of the areas of a digital transformation journey for many organisations.
Although every company receives invoices, volume and/or complexity is needed to justify an investment. A good base is 100 incoming pages (of invoices) per day which need to be processed by an accounts clerk. Other use cases can be, depending on the industry, just a few invoices, but very long/complex ones, due to the fact that these invoices have hundreds of line items – e.g. telecom bills, shipping manifests, etc.
“The average cost of processing an invoice in an environment with a low level of automation can be up to 20 times greater than the cost of processing in an environment with a high level of automation.”
Paystream Advisors – Invoice and Workflow automation report
What is recognised by the solution and what are the benefits of implementing an AP/AR automation solution
- Header information: Sender, date, number, order number, …
• Footer information: Invoice total, tax, Sub-Total, Tax-ID, …
• Line items: Quantity, Description, Unit Price, Sub-Total, …
- Line item matching, price matching
- GL Coding
- Vendor Coding
- Validating all necessary data (Tax-ID, Company-ID, ABN numbers, Supplier Numbers)
- Multiple currency processing
There’s no doubt, that an AP automation solution will improve business workflow and become an integral part of a company’s digital transformation journey, it is an area to realise quick easy wins. The return on investment is generally 6 to 9 months and with the right technology and implementation partner, the whole experience will be enhanced and scalability can be extended to many areas of a business. Moreover, digital transformation has become a requirement in order to remain competitive in the marketplace. Companies with strong policies towards technology uptake become leaders in their industry area compared to their slower peers and competitors. When it comes to AP automation and digital transformation, you want to be proactive.
If you have any questions on how to begin such a transformation, our team is only a phone call away.