Ensure ROI from AI with Cognitive IQ Bot for Procure-to-Pay Automation
In a previous post, we described how procure-to-pay processes could be automated end to end by adding Robotic Process Automation (RPA) and cognitive automation to bridge gaps between email, enterprise resource planning (ERP), and payment solutions. We also talked about the easiest way to implement such projects by leveraging prebuilt bots from Bot Store.
Now we'll focus on why accounts payable (AP) automation is important and the difference between semi and full automation of procure-to-pay processes. When we focus on the top concerns of 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 full-time equivalent (FTE), which is equivalent to an AP clerk working eight hours a day.
The chart below shows the average number of invoices processed by a single professional per year, depending on the level of peer-to-peer 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 more than 22,500 invoices per year.
In similar organization that still process 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 (IOFM) 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 by up to 80%.
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.
That means your vendors are happier when your employees are less stressed out and more satisfied with their jobs. Earlier payments may even lead to additional discounts and more cost savings.
Saving you time and money
Overall, automation improves AP process performance and reduces costs by eliminating invoice data entry, manual invoice handling, and routing required in a manual or semi-automated environment. Artificial intelligence (AI)-powered RPA technology automatically extracts and validates invoice data, matches invoices with purchase orders and proof-of-delivery receipts, and posts approved invoices directly into an ERP platform.
Any invoices that require review, approval, or exception resolution are electronically routed to specific individuals based on preconfigured 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.