The pandemic has upended supply chains, and upended accounts payable (AP) processes – requiring companies of all sizes and types to move toward digital (and high-tech-powered) means to transform back-office functions.
Generally speaking, the procure-to-pay cycle, marked by paper-based processes – particularly at the point where AP issues payments – and time-consuming workflows must be streamlined.
Against that backdrop, Aavenir recently announced an update to the Invoiceflow application that is geared toward making automatic invoicing even speedier through artificial intelligence (AI)-based invoice extraction. The updates, the company said, will speed invoice processing by 10 times and cut processing costs by 80 percent.
In an interview with PYMNTS, Jesal Mehta, founder and CEO, said that AI-based invoice data extraction has reduced manual tasks considerably.
But Aavenir’s conversations with corporates found that these firms were looking for more of an “enhanced workflow” for invoice processing.
“The majority of the organizations have their approval rules and approval matrix for the invoices. They can certainly benefit from combining the power of AI and the power of digital workflow to make invoice processing frictionless,” he told PYMNTS.
Making invoice-related tasks seamless and frictionless has taken on some urgency, as the shift to working from home makes it a challenge for organizations to get invoices approved. Nowadays, Mehta noted, “all approvals take place over emails – and the emails have a notorious tendency to get lost.” And emails, he said, also do not serve as the best way to audit approval cycles.
Drilling Down Into the Pain Points
Drilling down into other pain points tied to invoice management, Mehta noted that friction exists when teams look to manually match vendor data, receipts and other information tied to transactions.
The pain of manual processes is felt by large organizations that have a higher number of non-PO invoices and medium-sized companies that are struggling to automate the procurement process end-to-end.
The pandemic has spurred organizations of all sizes to focus on supply chain dynamics. Supply chain disruptions, said Mehta, have “disrupted business even more than the pandemic itself. The organizations have learned that suppliers have to be treated as partners. And for that, the AP process has to be smooth. The friction between the organization and the supplier should be reduced significantly."
Those continuing pain points open the door to the digitization of those workflows, maintained Mehta, which automatically sends reminders, escalations and other notifications. "That allows the organizations to reduce the late payment penalty and keeps the suppliers (partners) happy in the transaction process.”
He added that the recently announced product updates will “digitally transform the accounts payable department, with the help of AI and digital workflows."
Aavenir will reduce the friction for both of these types of organizations by automatically providing matches with PO data, contract data, GRN (goods receipt note) data and other vendor data. The firm also anticipates that blockchain technologies will help further automate AP and build trust between suppliers and buyers.
As back-end processes are automated, AP itself becomes a value-added process within the organization rather than just a source of necessary overhead, said Mehta.
“Efficient and automated AP processes can be an asset for organizations in terms of cash flow management and supplier relationship,” he noted, predicting that the trend will far outlast the pandemic.