Technology has taken accounts payable departments a long way since the days of the paper-driven office. In the past, processing invoices was a labor-intensive job, demanding hands-on attention from accountants who had to match purchase orders with payment requests, manually validate information, and send approval requests up the chain of command for further review.
Now, the majority of AP professionals have discovered the benefits of invoice automation. In fact, a survey by the AP & P2P Network found that 70% of accounts payable departments have automated their invoice processing. Of the respondents, 25% have gone as far as to completely eliminate paper and other non-digital touchpoints.
Achieving Next Level Efficiency With IDP
Automation programs have removed a lot of the busy work that goes into invoice processing. For environments where paper invoices are still in circulation, programs can automate image capture to create digital copies, queue invoices for faster review, and automatically route documents to appropriate decision makers. These systems often merge purchase orders and invoice records together so there’s no need to do any matching or verification.
What if there was a way to eliminate busy work?
Intelligent document processing (IDP) is a technology that can replicate (or come close to imitating) the way humans understand information — and further add to the benefits of invoice automation, drastically improving labor efficiency. This frees AP professionals to focus on more important tasks, such as responding to vendor inquiries or further improving processes.
The biggest benefits are:
Optical Character Recognition
OCR can transform any words and images from printed documents, PDFs, and other digital formats into machine-encoded text or data. Some more advanced systems can even read and convert handwriting. This virtually eliminates manual document processing because systems that use rules-based logic can automatically sort or label the captured data.
Reduced Human Error
The fewer human touch points there are in a process, the fewer opportunities for human error. Workers are most likely to make data entry errors when they’re busy — especially if they’re engaged in boring and repetitive work. IDP takes over a lot of the menial mental labor that AP professionals used to engage in, freeing them to spend their time more productively. Even better, IDP completes data capture tasks faster than a human ever could.
Greater Scalability
When AP departments manually process invoices, more invoices automatically translates to greater need for labor. With IDP implemented, these systems can process a few hundred invoices almost as fast as they can a few dozen, with virtually no increased demand on workers. This allows companies to maintain productivity even during busy times for AP departments, without any disruptions or need for extra help.
IDP Leaves Room for Improvement
For all the ways IDP improves productivity, it can be a struggle for AP departments to completely end manual processing. Much of this is due to legacy IDP systems’ dependency on templates to correctly label or contextualize the data it extracts from an invoice. If every invoice is formatted exactly the same, it will be easy for the program to understand who the payee is and how much they’re requesting. However, when formats vary, the IDP can misunderstand information and completely cancel out its benefits.
Editing current templates or creating more can require a lot of skilled labor and be quite expensive to set up. On the other hand, changing organizational processes to ensure every incoming invoice is formatted exactly the same can eat up even more resources. Plus, there will always be exceptions that require hands-on processing.
The Next Generation of IDP
A new generation of IDP solutions are equipped with unprecedented machine learning capabilities to recognize and act on more data faster and with greater accuracy. Automation Hero is powered by a deep learning AI and serves as a complete end-to-end solution. With a form-agnostic approach, the system can recognize any type of document and automatically contextualize data without the need to manually build a template, making it ideally suited for complex invoice management. With its self-serve and pay-as-you-go model, you can even scale the platform to handle other AP processes as needed.
Read here to know more about our Accounting Automation solution!
Originally published on Automation Hero's official website.
