The drive to eliminate paper in the accounts payable process, to cut the steps that lead to inefficiencies, continues to get a boost from technology.
In an interview with PYMNTS, Noel Flynn, CEO of ancora Software, pointed to a number of driving forces behind accounts payable automation, including the desire by executives to reduce operating costs.
But, as he noted, procure-to-pay processes involve manual labor across several steps. As he told PYMNTS, those steps include manual sorting of invoices, sales orders and supporting documents – and, more importantly, the manual entry of data from these documents.
AP automation has been available in one form or another for more than 20 years, said Flynn. But due to the complexity surrounding some of those solutions, small and medium-sized businesses have been unable to justify the cost of their deployment.
Against that backdrop, paper invoices still play a big role in the P2P process, Flynn noted, stating that “granted, we are seeing a higher percentage of invoices coming in via email. But they still need to be processed as a paper invoice.” He added that many of ancora’s largest customers are receiving more than 60 percent of their invoices via email.
While AP automation solutions help to minimize and sometimes eliminate these manual steps, historically these solutions have been complex, expensive and difficult to configure, install, use and maintain.
Flynn said that deploying such solutions would make it cost-prohibitive for small and medium-sized business to adapt, particularly companies that are not processing more than 3,000 or 4,000 invoices per month.
But that’s changing. “Through the use of artificial intelligence and machine learning, the high cost of purchasing and the implementation of data capture technology have gone away,” Flynn told PYMNTS. For its part, ancora late last month launched its sales automation solution.
There are, of course, different levels of automation that can be achieved depending on the company. As Flynn noted, among the simplest forms of automation are those that capture invoices after the procure-to-pay process is complete.
“This will eliminate lost documents and storage,” he said. At the same time, adding the intelligent classification and advanced capture when the invoices enter the process, regardless of source, will help to reduce – and in some cases eliminate – many of the manual steps in the process, such as sorting.
With an automated workflow process, the manual approval of invoices is eliminated and strict business rules can be applied to the process for compliance reasons.
Finally, Flynn said, a “tight integration with the client’s financial system” will allow users to work with invoices, sales orders and supporting documents directly from their financial system screens.
In capturing data and streamlining at least some processes, data can be found across several formats – and documents can be structured, unstructured or even semi-structured.
To the naked eye, Flynn said, orders and invoices may “look to be structured and have the same data elements, but across many vendors, the data elements are in different locations. I like to refer to these as ‘common data elements in uncommon locations.’”
Today, most advanced data capture solutions require that a template is created for each vendor to identify where data elements are located. With AI and machine learning (and through offerings such as ancoraDocs), these templates are eliminated.
The Compliance Factor
The changing regulatory environment has also proven to be a tailwind for AP automation.
“Legislation like the Sarbanes-Oxley Act and others have put pressure on companies to be able to show an auditable and measurable process in all their financial systems,” Flynn said. Though technically SOX only pertains to public corporations, many private corporations follow the same rules as part of their overall management. AP automation solutions help firms manage their financial systems in accordance with the law.
Deployments are occurring across verticals including financial, healthcare, education, retail and others, Flynn noted. “We are seeing more adoption of the technology in smaller companies because of the reduction in complexity and cost.”