Invoice automation and big data are hot trends in today’s world of accounts payable. But while automating the capture of data from an invoice can streamline the payments and reconciliation process, it can also be a catalyst for disaster when the data that is collected is incorrect.
Automated data aggregation can lead to tiny errors – mistaking an ‘I’ for a ‘1,’ for example – that, in turn, yield massive headaches for accounting teams. But the Conexiom data capture technology from ecmarket guarantees 100 percent accuracy. Brent Halverson, the CEO of ecmarket, tells PYMNTS how that’s possible, and what pinpoint accuracy means for easing B2B payments – even within his own company.
From POs To Invoices
The Conexiom solution, Halverson explained, first began with automating data capture for a purchase order, a tool to help distributors and manufacturers assure accuracy of the goods they ship to their corporate clients.
A few years ago, clients began asking about what other documents Conexiom’s technology can be applied to. With invoice automation serving as an on-demand solution in today’s B2B accounting world, Halverson said it was a fairly clear choice to apply their patent-pending data capture technology for B2B bills. Halverson said ecmarket has been using the technology to automate invoice processing for its clients for some time, but the official Conexiom Invoice Automation tool saw its official rollout just a couple weeks ago.
With the ability to ensure 100 percent data accuracy through reading the underlying data of a digital document, like a PDF or emailed form, Conexiom cuts out some of the errors that can occur from older, legacy data capture processes, like Optical Character Recognition, or OCR, in which technology estimates what a character is.
OCR, Halverson explained, can lead to tiny errors. “These OCR technologies can have a hard time distinguishing the difference between a ‘1’ and an ‘I’ or an ‘L,’” he said. Conexiom, however, will always be able to recognize those differences.
While the solution initially applied to the PO to assure the correct volume and type of product sent by vendors and manufacturers, Halverson told PYMNTS that by applying data capture technologies, companies can assure that the correct payment amount is issued.
After all — a seemingly minute error can lead to companies paying their suppliers too much or too little. And that, Halverson said, can lead to some big problems.
[bctt tweet=”Mistaking an “I” for a “1” most often leads to companies paying their suppliers too much or too little.”]
Supplier Payment Friction
Among the most apparent conflicts that stem from incorrect payment amounts is that it leads corporate employees to spend time reconciling that error.
“The manufacturing and distribution sectors are starting to really look at their staff and what they spend their time on,” Halverson said, “and rectifying these situations is not a value-added task – for either the vendor or the vendor’s customer.”
This put a serious strain on the buyer-supplier relationship, he said. Plus, payment errors can mean companies miss out on cash savings through early discount programs. “Maybe your terms allow you to have a discount or earlier payments,” explained Halverson. “Now, all of a sudden, you may not earn that discount for early payment because you’ve not paid enough.”
While ecmarket’s business model is to help other B2B companies reduce errors in their operations, Halverson said that its services help his own business nix some of this friction, too.
“In our own business, we’ve been overpaid by somebody. We’ll tell our vendor that we’ve been over- or under-paid, and you can spend a lot of time on the phone or on email trying to rectify that,” Halverson said.
Where AP Is Headed
Halverson said that ecmarket, like other B2B firms, is experiencing payments friction due to still receiving paper checks in the mail from some of its corporate clients, too. The space is trending away from that, however, and the executive said that B2B payments will turn towards even more sophisticated forms of automation.
For example, Halverson said companies are segmenting their vendors and suppliers in the accounting automation process. “Manufacturing and distribution companies know that automation brings great benefits, but instead of getting all vendors into a single EDI [Electronic Data Interchange] and forcing them all to go onto one e-invoicing website, we’re starting to see companies segment and create different approaches to their automation with each vendor,” he explained. Easing friction on B2B payments when a single payment has crossed multiple purchase orders is also on ecmarket’s radar, he added.
According to Halverson, at the heart of all of this is data – and, more specifically, accurate data – is the ability for companies to automate their payments processes.