Despite some positive signs, such as the 2.9% growth of the U.S. economy in Q4 of 2022 and the lowest unemployment rate in a half-century, experts continue to warn that a recession may soon be upon us. Because of this many organizations are looking for tools that can strengthen their financial performance and security.
In the world of accounts payable, organizations are increasingly turning to automation solutions that utilize machine learning and artificial intelligence to maximize efficiency, reduce costs, and help create long-term financial stability.
Before diving into the ways AI can improve your AP process, let’s talk about what the technology won’t do. Terms like artificial intelligence and machine learning can conjure up images of a dystopian science fiction-like future where machines have completely erased the need for human talent. Clickbait articles are quick to capitalize on those fears, but the truth is that successful companies will still need a human AP team to operate at peak efficiency.
Need proof? Take the case of ScaleFactor, which boasted an AI technology that eliminated the need for a human team. The only problem? The tool was prone to glitches and didn’t reliably sort transactions. So, the company had to hire a human team to do most of the work.
Accounts payable, and finance in general, are nuanced tasks that require the human element to be run successfully. And that isn’t changing anytime soon. What artificial intelligence and machine learning can do is give your AP staff the time and freedom they need to handle the more strategic responsibilities of finance.
Put Technology to Work for You
In a recent survey, it was found that accounting teams spend as much of a quarter of their workweek handling data entry. Not only is that an inefficient use of time, but it’s prone to errors.
As many as 20% of invoices regularly contain incorrect or incomplete information.
Regular errors or missing information can add up. As your team spends hours or days trying to identify and correct the mistake, payment deadlines can be missed, which has a direct impact on your financial security. Late payments can threaten supply chain relationships, result in late fees and penalties, and the loss of potential discounts. When every penny counts, that’s simply not a risk you can afford.
Quadient AP’s automation software uses AI-powered technology that extracts invoice information. That means no more time spent coding line-item details. The software performs the task with 99% accuracy and reduces data entry time by over 80%.
“It’s cut our AP administrator’s workload in half. We love it! It automatically picks up data and uploads it to Quadient AP.”
- Connie Robertson, Controller at DisperSol
With less time spent on these manual tasks, AP employees are freed up to engage in activities that can help generate money, such as finding discounts and rewards for early payment. They are also provided the freedom to dig into vendor relationships to ensure all terms are being complied with and the organization is not paying any more than necessary. In addition, it leaves AP representatives with the ability to strategically plan payments, so they are not paid earlier than necessary, allowing your organization to hang onto its cash as long as possible.
Eliminate the threat of fraud
Even when the economy is stable or thriving, fraud is a regular issue for organizations. In fact, the average company loses 5% of its revenue to fraud each year, with the median loss per case being $125,000. The potential economic impact of those losses is catastrophic.
It’s an unfortunate truth that attempted fraud is more common during times of economic uncertainty. It’s easy to see why when looking at the “Fraud Triangle” framework created by the service firm MNP. It lists the three primary reasons that people or organizations commit fraud:
Opportunity, such as gaps in the control system
Motivation, caused by issues like financial hardship
Rationalization, due to issues like economic uncertainty
Using AP software with artificial intelligence capabilities decreases the risk of fraud by identifying things like duplicate invoices, suspicious activity, and extra charges.
Begin planning for tomorrow
With the assistance provided by AI and machine learning, you can move confidently through periods of financial uncertainty and begin planning for what comes next. By reducing overhead and giving your AP team more time to approach their job strategically, you can even transform the department into a money generator, giving you the security you need to stop being reactive and begin planning beyond an economic downturn.
To learn more, register for our upcoming webinar, Preparing Your Business to Weather a Recession.