Accounts Payable Automation-Surmounting the Supplier Hurdle

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High-level accounts payable automation has become well-established across enterprise businesses and is advancing rapidly. However, as with other technologies, even though positive changes are occurring rapidly, they are not necessarily being rapidly accepted.

Defining the Problem

The most efficient accounts payable process is one that is fully automated, eliminating errors inherent in human intervention. Ideally, this requires the participation of both the supplier and the customer- from the development of purchase order to payment of invoice.

A recurring problem for many businesses is that, even though they may become automated, and may have even set up a supplier portal as part of their accounts payable automation system, some of their suppliers may elect not to use the portal. These suppliers may insist on submitting invoices by older, less efficient methods, such as mail, fax, or emailed PDF.

The result is that invoice payment is significantly slowed down. Invoices from multiple suppliers arriving in several different formats must be manually reviewed for errors and omissions, and then converted to the buyer’s automated system for processing. This defeats the purpose of automation in the first place, which is to eliminate error and streamline accounts payable functions.

Closing the Loophole

A free and easy-to-use supplier portal remains the most effective method of e-invoicing—however, the reality is that not all suppliers are ready to make this jump. To keep pace with such problems, enterprise-level automation has developed a two-fold solution to supplement those suppliers unable (or unwilling) to use a portal. This solution includes utilizing the digitization of invoices and artificial intelligence with machine learning technology.

Digitization of Invoices

With the digitization of invoices, suppliers don’t have to hop on a portal. While enterprise-level solutions will typically offer full supplier onboarding so that AP doesn’t have to worry about getting suppliers onto the portal in the first place, digitization makes it so that AP doesn’t have to manually handle the remaining emailed and paper invoices. With digitization, the supplier sends the PDF or paper invoice directly to the automation solution—where the invoice is then “digitized” and converted into an electronic invoice.

Artificial Intelligence and Machine Learning

The second part of the two-part solution is artificial intelligence and machine learning. Artificial intelligence with OCR capabilities recognizes information that it derives from an electronic invoice, and enters that information to the user portal. Over time, machine learning technology makes it so that the system develops a confidence level of the information that it reads from the invoice. Once the paper or emailed invoices are digitized, they are read exactly as if the supplier submitted a file upload directly to the portal—and the digitized invoice becomes instantly available to the customer and ready for payment.

Gracefully Overcoming the Hurdle

When it comes to AP and suppliers, invoice errors can lead to inevitable tensions between the two parties. When invoices are managed efficiently and the rate of error is exponentially lower, relations between supplier and customer are eased, and tensions are diffused. Plus, by allowing suppliers to submit invoices in a way that is most convenient, while still giving AP complete online access, accounts payable automation simplifies communications with suppliers. This simplified communication, along with better invoice management, leads to a smoother invoicing process from start to finish.

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