Michael Benn, Accounts Payable Consultant, SAP Concur
The past twelve months have been difficult for Accounts Payable (AP) teams. From driving back and forth to various offices to collect invoices, to chasing employees who are working from multiple locations, not to mention having less time to process even more invoices – their work has become even more difficult.
This added pressure has led to many problems including a heightened risk of fraud, but it also means that many AP teams are unable to do the strategic work that they should be doing. To overcome these problems, AP teams need to adopt automation and AI technology to create an AP process that is fit-for-purpose.
Artificial intelligence (AI) in particular has the potential to revolutionise the AP process, with advancements that eliminate tedious tasks and free up time for financial staff to prioritise higher impact responsibilities. Yet a majority of businesses (80 percent) still haven’t employed AI in their workforces due to uncertainties around the business case or return on investment. This needs to change.
Increased fraud during the pandemic
A world where communication is difficult and time is tight, is a world that’s perfect for fraudsters – and that is exactly what is happening. Research shows that nearly 40% of firms experienced a year-on-year increase in fraud during 2020 with an average loss totalling £245,000. During an economic downturn, this is simply unsustainable. A lot of this is actually accidental, with employees often mistakenly duplicating expense claims or invoices, as well as the fact that businesses are only able to audit around 10% of expense reports manually, so much potential fraud goes undetected. AI provides a solution to this problem, enabling the auditing of every single spend report and predicting patterns and detect any anomalies that appear in financial data.
COVID-19 has made it more important than ever that businesses are identifying any fraudulent activity and preventing it. Invoice fraud is one example that has seen an increase during the pandemic. Unfortunately, there are nefarious actors submitting fake invoice requests to organisations all over the UK in the hope that they won’t be checked. This can be an even bigger problem for small businesses, with smaller finance teams that are increasingly stretched. Technology can ensure these scam invoices are always caught and can save organisations money in the long run.
Unleashing AP teams
This time last year, we talked of things going back to the way they used to be. Now, we know we are living in a world where remote and hybrid working is a fact of life and will be for some time to come. It means we can’t continue to brush the problems with a paper-based AP process under the carpet. We have to fix it, so it works in our new world of work.
Data entry is one area that AP staff grumble about and it is a mundane task that they do not enjoy. One AP person I have spoken to has to replace their keyboard every three months because they do so much data entry! This doesn’t need to be the case and by combining the best of optical character recognition (OCR), machine learning and human expertise, organisations can eliminate tedious data entry, improve accuracy, and accelerate invoice turnaround times. On top of this, there is the cost-saving element and the Institute of Finance Management (IOFM) puts the cost of manually processing a single vendor invoice at $10 to $23 per invoice; automating vendor invoice management can reduce the cost of processing one invoice by up to 80%.
This also means that AP teams can spend their time doing more strategic work that actually helps their organisation differentiate from competition. By unleashing the AP team, organisations can move from survive to thrive and enable the finance team to work on tasks such as managing relationships and conducting cost benefit analysis.
The benefits of automating the AP process are great and relevant to organisations of all sizes. To create a finance department fit for the modern world, organisations must adopt this technology now.
