AI and Machine Learning Power Technology to Make AP Processes More Accurate and Efficient
There’s a broad misconception that today’s workforce is against artificial intelligence (AI), fearing that it will take over their jobs. A recent Microsoft study revealed that nine out of 10 people actually want to incorporate AI into their work, automating mundane daily tasks so they can focus on more strategic projects.
AvidXchange wondered if the same was true for accounts payable (AP) staff, so we surveyed more than 450 finance professionals in partnership with the Institute of Finance and Management (IOFM). Our results (detailed in the AP Professional Career Satisfaction Survey) mirrored those of the Microsoft study, with 94% of respondents stating they would use a tool to automate the most repetitive parts of their job.
The good news for AP teams is that tools exist today that leverage AI and machine learning to help them get more done. These tools alleviate some of the repetitive tasks they have to do so they can do more of what they want to do.
A Brief History of AP Technology
AP work hasn’t changed much over the decades. For more than a century, processes have relied heavily on manual systems. Vendors would mail paper invoices and businesses would mail paper checks as payment. Along the way, there were many opportunities for errors and delays, and even fraud.
When computers became more commonplace in the 1980s, tech-savvy businesses began to transfer files and payments electronically. As internet adoption grew through the 1990s and early 2000s, e-payments gained traction. Any business could bypass the postal service, emailing invoices and speeding up the process.
The rise of cloud computing and software-as-a-service (SaaS) platforms in the 2010s brought significant advancements in AP technology. Cloud-based systems offered enhanced accessibility and scalability. These platforms integrated with other financial systems, such as enterprise resource planning (ERP) software, to provide a comprehensive solution for managing AP.
In more recent years, the development of AI and machine learning has further advanced AP technology. AI-powered systems can now extract key information from invoices automatically and leverage data to detect patterns and business opportunities. These advancements have significantly improved accuracy, reduced processing time and related costs, and enhanced analytical capabilities to allow for smarter business decisions.
Survey Says: AP Teams Have Positive Perceptions of Technology
Though some organizations have been slow to adopt new systems, our AP Professional Career Satisfaction Survey found that AP staff are knowledgeable about the latest technologies and eager to apply them within their department. We learned that 31% of respondents said they know about AP automation, with 40% claiming to know “a lot” about it. Less than 1% of those we surveyed said they’d never heard of AP automation.
Seventy-eight percent of respondents said they “welcome modern technology that allows my team to work more efficiently,” while only 3% said it “makes me anxious because it handles portions of my job and lessens my contributions.”
More than 70% of the AP pros we surveyed believe automation technology would have an immediate positive impact on their current role, and 75% believe automation technology will have a positive impact on their career long-term.
When asked why they want to use automation technologies, survey respondents said to save time (85%), reduce errors (79%) and focus on more fulfilling work (65%).
It’s clear that AP professionals realize the potential benefits of technology and are ready to use it to their advantage at work.
AI Heightens AP Accuracy
Accuracy is an element of AP that’s been enhanced significantly thanks to digital developments. Today’s technology employs multiple controls to ensure the figures recorded for invoices, payments and balances are error-free. This reduces discrepancies in financial reporting.
Improvements in accuracy are a result of AI and machine learning. Machine learning is a type of AI that uses data and algorithms to mirror the way that humans learn, gradually improving precision.
For example, AI helps AP teams index invoices more accurately. There’s a greater chance for human error when a person manually enters an invoice. But when a person works in tandem with a tool powered by AI, there’s an extra level of verification that improves the quality of the data. The model gets smarter over time as it expands its understanding of the patterns detected within your organization’s invoices. Plus, the task is completed faster, allowing the team to scale volume without adding headcount and freeing up time for more strategic work.
According to a survey by IOFM, 47% of companies noted that invoice receipt/data capture is a hurdle to achieving more AP efficiency. Index automation speeds the process and ensures invoices seamlessly enter your organization’s workflow.
In addition to improving efficiency and accuracy, machine learning technology can help AP departments in a number of ways:
✅ Improved vendor relationships: Accurate and timely payment builds trust and credibility with suppliers.
✅ Better cashflow management: Errors in debt records may cause late/missed payments that lead to financial penalties.
✅ Adherence to compliance and audit requirements: Automated record-keeping ensures all transactions are digitally captured, which simplifies research related to compliance and audit projects.
✅ Enhanced cost controls: Machine learning discovers invoicing patterns and can flag teams when there’s an anomaly. This can prevent issues like overpayment and duplicate payments.
✅ Informed decision-making: Business intelligence (BI) dashboards with accurate accounts payable data let teams analyze spending patterns, identify cost-saving opportunities and assess financial performance.
Technology tools that utilize machine learning have an overall positive impact on AP processes and team efficiencies.
To learn more about leveraging technology to improve your company’s AP efficiency, click below to connect with one of our automation experts.