Artificial Intelligence (AI) is now driving finance operations at a faster pace, but most businesses are still hesitantly considering if the technology would really make a difference for them. This white paper will tell you how AI can deliver the best results for the P2P process, and how to better prepare for the future.
AI and Machine Learning
AI enables machines to perform tasks that would normally require human skills and intelligence. Apple’s Siri and Amazon’s Alexa are some examples of technology that are able to process voice commands. Machine learning is a subset of AI that allows machines to learn and adapt to evolving business conditions. When machine learning tools are leveraged, computers learn by understanding different invoice formats, languages, and processing future invoices more efficiently.
AI In Procure-to-Pay
Let us explore three key areas where we see AI adoption in P2P: Intelligence, Business spend management and AP automation.
Turning Data into Intelligence
Organizations have to organize and manage data with respect to invoices, purchase orders and other documentations. Solution providers use AI to study huge volumes of structured and unstructured data to deliver meaningful information and insight. This allows a business to leverage data from thousands of other businesses in order to make the most informed decisions.
In the P2P cycle, software solutions can help data go through the system in real-time and then provide real-time insights to customers. With AI, you can easily find information that is relevant, such as helping to identify the optimal suppliers or drill-down into industry specific details. Artificial Intelligence helps companies improve results, reduce their supply chain risk, and make faster decisions.
AI Boost Spend Management
Managing business spending effectively is one of the most powerful ways to drive performance. AI helps businesses make better decisions about how to manage their supply chain, especially in the following three areas:
Identifying Sourcing Opportunities
AI can help identify buying patterns in user behavior to better analyze your purchasing needs. AI can also suggest routine purchases, examine all transactions, and see if employees are buying goods and services. If a pattern is identified, the solution will issue an RFP or run an auction to purchase the certain service from other vendors at a better price. Also, AI can help map items purchased from the same supplier to help negotiate better contracts.
Understanding how every penny is spent is critical for an effective operation. AI can help organize spending data, improve readability, and quality of the data. Gathering the data from various sources and putting it all together can be too costly and time-consuming. AI tools can extract, organize, and present data quickly.
Understanding The Supplier Base
Analysis with AI tools can be used to check risk level, in order to can help you identify opportunities for minimizing risk and increasing savings. With large volumes of data being analyzed, spend management is one key area where you can gather the biggest insights. An AI-powered procurement solution helps businesses better understand their supplier base, allowing them to make better purchasing decisions, control risks and capture discounts.
While many businesses try to automate the AP process by implementing the solution they think is right, you need to specifically emphasize the largest-volume suppliers. AI plays a key role in driving touchless processing in the following three areas:
- Invoice Entry
AI tools can learn a variety of invoice formats, as they continuously get invoices from various suppliers and extract data from the invoices. The solution can auto-code invoices and add tax codes.
- Tolerance Checks
If you have rules and thresholds for what kinds of invoices should be auto-approved, AI can spot recurring invoices and approved invoices can be posted without the need for human intervention.
- Guided flow
With pre-defined rules, AI tools can guide an invoice through the workflow as necessary, bypassing the need for a team member to get involved.
AI-powered software can help improve processing times by reducing the manual work your AP department has to do. When AP tools are powered with intelligence and machine learning, they benefit from the ability to receive various invoice formats and improve the process overtime.
It is important to understand how AI should be leveraged and how it can benefit your business. To help build a roadmap, you have to understand how AI can improve the performance of your business.
Kevin Peterson is a content marketing enthusiast, freelance writer at SutiSoft, specializing in Business, ERP, Technology and Cloud/SaaS trends.