By Dan Drees, President of AvidXchange
Automation has revolutionized the accounts payable (AP) department, eliminating time-consuming, mundane tasks needed to process and pay scores of invoices and freeing people to become more strategic players in their organization. The integration of artificial intelligence into AP automation takes modernization a step further, transforming the entire purchase-to-pay process, increasing efficiency, accuracy and security, and enabling finance teams to leverage the enormous amount of data available to them to make more informed decisions. With newfound insights and analytics, they can help more accurately manage cash flow, predict future outcomes, and ensure a more profitable future for their organization.
While artificial intelligence (AI) technologies are in their infancy and rapidly evolving, 72% of finance executives surveyed last fall said their department is already using AI technology, such as natural language processing to automatically extract financial data from documents like balance sheets and enter them into financial systems, and computer vision that allows for more efficient, accurate data entry. Integrating AI into AP work will become increasingly pivotal as finance departments face continued pressure to modernize to increase efficiency, protect against growing security threats associated with manual, paper-based processes, and manage persistent challenges, including a turbulent economy and staffing shortages. The use of AI-enhanced automation will also help protect and strengthen vendor and supplier relationships businesses rely upon for future growth.
Here we examine specifically how AI-driven automation can help streamline AP processes, how it’s impacting jobs in the AP department, and what the future may hold as organizations continue to embrace advancing technologies to transform their invoice and payment processes.
Artificial Intelligence Streamlines the End-to-End AP Process, Increasing Efficiency, Speed and Accuracy
While AI can play many roles in the finance department, more than half of finance executives surveyed are relying on technology for automation. However, AI can automate repetitive AP tasks such as bookkeeping, data recording, reporting, invoicing and reconciliations, and guide decision making to transform the entire AP process.
AI-driven AP solutions leverage computer vision and natural language processing to extract relevant invoice data and eliminate the need for time-intensive manual input. The technology matches invoices against purchase orders and sales receipts, speeding the process by routing invoices for approval based on both machine learning and predefined rules. By analyzing historical data, AI can identify patterns to detect fraudulent invoices or irregular payments, helping to ward off financial losses due to fraud or error and ensuring ongoing security and regulatory compliance.
AI can also enhance AP processes by analyzing contract terms and offering suggestions for payment timing to capture supplier discounts and empower teams to manage the financial health of their organization by providing a clear view of financial performance through insightful reports and dashboards. The increased visibility enables staff to make data-driven decisions and their organization to redirect when necessary to reach better outcomes and meet specific company objectives.
AI-Enhanced AP Automation Creates More Rewarding, Strategic Jobs
There’s a misconception that using AI in accounting and finance will replace humans. In fact, a recent Forbes Advisor survey found that more than 75% of consumers are concerned that AI will cause job losses in the near future. It’s important to recognize that AI cannot replicate human intelligence or replace innate human characteristics, including creativity and the ability to exercise judgment and understand nuances, that are critical to financial work. Rather than replacing humans in the AP department, AI serves as a valuable tool to empower AP staff to do more strategic work while evolving their roles and opening new opportunities.
By automating time-consuming, repetitive processes using AI algorithms, AP professionals are freed for more strategic and rewarding work. They are also armed with valuable data insights that can be used to identify and rectify bottlenecks in their processes, strengthen supplier relationships, spot new opportunities, and guide important decision making, making them more valuable to their organization.
Opportunities to work in tandem with cutting-edge technology leads to greater job satisfaction, ultimately boosting retention and serving as a powerful hiring tool, benefits that are especially helpful during an industry-wide labor crunch. Organizations can ensure their current staff and new hires have the skills and confidence they need to excel at their jobs and maximize technology investments by providing upskilling and ongoing training and development.
What’s Ahead for the AP Market?
Undoubtedly, AI is top of mind for finance leaders and playing a prominent role in 2024 budgets: 90% of CFOs surveyed by Gartner are projecting higher AI budgets in 2024 and none are planning a reduction.
What does a growing adoption of AI mean for the AP market? Investment in AP automation will increase as AI and other advanced technologies continue to evolve.
Small and medium-sized enterprises (SMEs) are expected to witness the fastest adoption due to the ability to reduce manual errors, increase efficiency and accuracy, and allow companies to have better control over financials by providing real-time insight into performance.
What company doesn’t stand to benefit from these game-changing promises? Perhaps a better question is: Can any company afford not to embrace AI as it continues to revolutionize the way we work, reveal powerful insights, and offer unparalleled competitive advantage?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.