- October 11, 2021
- Posted by: Editorial Team
- Category: Blogs
Key Points: Accounts Payable (AP) is a prime case for deploying RPA. The primary issue around AP is the manual processing leading to delays and errors, and the high cost of processing invoices that are not standardized or need exceptions. AP processes do not need intelligence and can easily be handled by BOTs. Sometimes there may be a need to add OCR or NLP capabilities in the BOTs. Perhaps, pair these up with a Chatbots to handle supplier queries to make the AP process management less stressful and more streamlined.
Managing the Accounts Payable (AP) function can be a nightmare. Among the long list of contributing factors to this state – the significant number of invoices that still come in paper format, errors in manual processing and fears of duplicate invoices slipping through and getting paid. Multiple surveys around the world have thrown up startling statistics on AP. Errors of up to 3.6% are likely to creep in during manual entry of invoices. Exceptions handling in the AP processes seem to be the rule, with 8 out of 10 invoices needing it, contributing to over a third of incoming calls from suppliers. Delays in payment processing are likely to result in penalties and you may end up with some suppliers refusing to work anymore. Let’s not forget another important aspect – the costs of processing. A typical invoice is likely to cost you between $ 5 – $ 12 for processing, with exceptional cases being as high as $ 20.
For all these reasons, AP is a prime case for automation. While much has been done for integrating with ERPs, AP is also ripe for RPA. Even if you are a small organization processing just a few hundred invoices in a month. As the case with a Temp Staffing customer of ours. Our customer, based out of the Bay Area, with staff deployed across the US receive hundreds of weekly invoices from individuals and smaller manpower supplying agencies. Invoices come in all shapes and sizes, multiple varieties including scanned copies, with incomplete information and often wrong information. Thankfully, they were all mailed into a single e-mail box, which we trained a BOT to handle.
We charted the manual processes that were being executed by 3 persons every Tuesday for the previous week’s services rendered. We helped them re-engineer the processes including templatizing the inward invoices down to 5 from the hundreds of non-standardized invoices. The BOT would then open each invoice, extract all relevant information, validate this against the contract information, do some basic mathematical calculations, feed the data into the AP system, trigger acknowledgement / error messages to the originator of the invoice and inform the person responsible for the AP task of the work that has been executed. The result: No more fretful Tuesdays, far fewer escalations for payments, zero errors, quicker invoice raising on the customers and better cash cycle.
Organizations are increasingly going in for RPA of many of the AP processes. BOTs that integrate OCR, or Optical Character Recognition, can read scanned images of invoices. Others with NLP, or Natural Language Processing capabilities, are even able to make sense out of text typed on the invoice. Significant time and cost savings have been reported even by BPO units that process invoices on behalf of their customers.
There is a clear case for deploying RPA in the Accounts Payable processes of any organization. If you would like to know more about how you could do this, please reach out to: email@example.com