Artificial intelligence has hugely impacted accounts payable over recent years. There have been substantial breakthroughs achieved across the finance and procurement processes over the past decade, thanks to AI. There has also been a significant push toward automating manual and tactical processes, particularly in the accounts payable department. The push results in global firms focusing their attention and, as a result, undertaking process improvement projects.
What role does AI play in the process of accounts payable?
Before we can understand how AI impacts the accounting and finance industry, let’s first grasp what AI is and how it may be applied inside the accounts payable department.
Artificial intelligence [AI] is a subfield of computer science. It entails the creation of machines that are capable of thinking and behaving like humans. Therefore, we are talking about software or a program that demonstrates human intelligence.
They can gather information, analyze it, and complete the duties given to them. Examples include speech recognition, the ability to make decisions, the ability to compare facts, and much more. Examples include chatbots such as Siri and other intelligent home appliances that can be controlled by speech.
Here are some of the roles that AI plays in accounts payable processes:
- Invoice capturing
There are a variety of formats in which invoices can be received. It is possible to employ AI-powered systems to retrieve data from hard copies, emails, or electronic invoice generators. The data taken is then matched automatically with the appropriate supplier, and a bill is created in the end.
If this is not the case, accountants will be required to manually search for invoices in a number of different locations before uploading them for payment. The OCR [Optical character recognition) serves as the mechanism that makes this possible.
- Matching invoices
The particulars of the invoice have to be checked for accuracy before it can be processed for payment. Two-way or three-way matching strategies are utilized to ascertain the correctness of the comparison with the purchase order. Whenever there is a discrepancy between two pieces of information, the AI will promptly detect and transmit it.
- Detecting fraud
Fake bills and invoices almost always appear like their authentic counterparts, but their primary purpose is to steal your money. It is possible to apply AI to detect irregularities in bills and forward them for further investigation. During the identification process, it looks for patterns and compares invoices that have already been processed.
- Helps with the analysis of data and forecasting
It is able to perform analysis on a massive amount of data and come to meaningful insights. The financial staff may find it easier to create budgets for months to come with this information. Based on your expenditures, it may also make recommendations for cost-effective procedures and strategies that save money.
Ways in which AI in accounts payable systems help reduce manual intervention
- It eliminates labor-intensive tasks.
- It automates the extraction of data and auto-populating codes
- It automates reminders for approval and payments
- It enhances the accuracy of processing batch invoices
- It promotes timely payments
How AI-supported solutions can help your business
- Improved business efficiency
Efficiency is crucial in any business, regardless of size. In accounts payable, efficiency translates to how faster an invoice is cleared out of the company’s system. You can achieve that through automation. The required level of efficiency can be reached through invoice matching and processing automation.
- Increased transparency
Transparency is also another vital aspect of running a successful business. A confidential accounting system is impossible to maintain. Departmental managers and finance teams can monitor payments in real time with the help of inputs provided by a dashboard that is both open and transparent. Due to this, everyone will better understand the company’s regular payments. Tracking improper practices and creating monthly budgets are made easier due to this.
- A decrease in fraud risk
While it is possible to detect fraud, real-time fraud detection is needed to rectify it and seal its source. Thankfully, that can be achieved by AI-based accounting systems. They make you aware of any discrepancies, mismatches, and anomalies they find to ensure that nothing is hidden from you.
They use a variety of checkpoints to ensure that no false or duplicate invoices are allowed to pass through. The AI also remembers trends and patterns and detects anything that differs greatly from what is typical.
- More informed financial decisions
The information that the financial team requires is provided to them, and it is also in a presentable format. They don’t need to maintain as close of a relationship with the accounting department as they once did because this data is also up to date.
Additionally, AI can draw insights regarding spending and share them with the relevant departments. This is based on the patterns of spending you’ve done in the past. The use of artificial intelligence in accounts payable helps you compare values by comparing large chunks of data that are much older than months.
This kind of calculation can’t be done by hand because it’s too complicated. They can be utilized as inputs in the process of cost projections for the future. The higher the amount of data it has access to, the more accurate the insights it generates.
The future of accounts payable for businesses
The introduction of new technologies has affected nearly all of today’s business sectors. Applications created with cutting-edge technology may be found just about anywhere. There is more than just accounts payable. The accounts payable process has already been automated and improved thanks to the application of AI technology.
In many AI applications, AI principles such as machine learning and robotic process automation (RPA) are already used to acquire and analyze real-time data. It possesses the limitless potential to upend the current state of the financial environment.
Data analytics, risk assessment and flagging, compliance management, chatbot support, and many more activities are just some of the responsibilities that are likely to be taken over by AI in the future. AP teams can identify efficient solutions at a lower cost and make auto-classifications when they utilize AI.