Ensure ROI from your AI Investments with Cognitive IQ Bot for Procure-to-Pay Automation

Written by Semyon Sergunin in Software robots in the workplace on February 4, 2019
ROI

In previous posts, we have described HOW procure-to-pay processes could be automated end-to-end by adding RPA and cognitive automation to bridge gaps between email, ERP, and payment solutions. We also talked about the easiest way to implement such projects by leveraging pre-built bots from the Bot Store.

Now I want to focus on WHY AP automation is important and the difference between semi vs. full automation of procure-to-pay process. When we focus on the top concerns of the AP department heads, we can see how automation addresses them.

1. Procure-to-pay process efficiency. AP departments rarely have enough resources and are pressed to do more with less. This is especially challenging since the flow of incoming invoices decreases processing efficiency, measured by the number of invoices per FTE (full-time equivalent), which is equivalent to an AP clerk working 8-hours a day. The chart below shows the average number of invoices processed by a single professional per year, depending on the level of P2P automation.

level of automation

In organizations that have adopted accounts payable automation—where at least 70% of invoices are received electronically and then processed via automated workflow—a single AP clerk can process over 22,500 invoices per year. In similar organization that still processes invoices manually, the performance of a single AP clerk could be reduced by 10 times.

2. Invoice processing cost. The Institute of Finance and Management data shows the average cost of invoice processing depending on level of automaton. This number does not include some expenses, such as overhead and initial automation expenses, but does compare AP functions across different organizations. Highly automated AP departments can reduce their costs up to 80%.

level of automation
Source: Institute of Finance and Management AP Benchmark Report, 2017

3. Vendor relationships. More efficient invoice processing leads to more on-time payments. Approximately 29% of IOFM respondents with significant automation report paying their non-PO invoices on time at least 96% of the time–compared to only 13% of those with moderate automation. This means that your vendors are happier, while your employees are less stressed out, and more satisfied with their jobs. Earlier payments may even lead to additional discounts and more cost-savings.

Overall, automation improves AP process performance and reduces costs by eliminating the invoice data entry, manual invoice handling, and routing required in a manual or semi-automated environment. The technology automatically extracts, validates invoice data, matches invoices with POs, along with proof-of-delivery receipts, and posts approved invoices directly into an ERP platform. Any invoices that require review, approval or exceptions resolution are electronically routed to specific individuals based on pre-configured rules.

Additionally, dashboards automatically alert managers to bottlenecks and users to invoices approaching their due-date. The technology tracks key productivity metrics, such that accounts payable no longer needs to pay fees on multiple bank systems to pay suppliers.

To learn more about WHY end-to-end Procure-to-Pay automation is so critical and HOW the combination of RPA technology and cognitive IQ Bot allow achieving the maximum level of automation, watch this on-demand webinar.