The AP team is usually viewed as a cost center, but what if replacing mundane tasks could turn them into a value center?
Invoice processing and PO matching are some of the most time-consuming tasks for the AP team. But both tasks have undergone a remarkable transformation through automation and technology. Advanced systems now extract relevant data from invoices, validate and match them against predefined criteria, and automatically update financial records. Through machine learning and AI, autonomous invoice processing and PO matching can accurately categorize and route invoices, reducing manual effort, minimizing errors, and enhancing efficiency in financial operations.
8 AP-tasks with big impact
If invoice processing is automated, Accounts Payable (AP) teams can focus on higher-value tasks that require human expertise and judgment. These are eight tasks the AP team that have more impact on your business instead of processing invoices with outdated methods and technologies:
1. Vendor management: AP teams can spend more time building and maintaining strong vendor relationships. This includes negotiating contracts, resolving payment issues, and identifying opportunities for cost savings or process improvements.
2. Financial analysis: AP professionals can perform an in-depth analysis of financial data related to accounts payable. They can identify trends, conduct variance analysis, and provide insights to support strategic decision-making within the organization.
3. Cash flow management: AP teams can play a vital role in optimizing cash flow. They can monitor and project cash inflows and outflows, collaborate with other departments to streamline payment processes, and implement strategies to optimize working capital.
4. Process improvement: With automation handling the bulk of invoice processing, AP teams can focus on continuous process improvement. They can identify bottlenecks, inefficiencies, and areas for automation enhancement. By streamlining workflows and implementing best practices, they can improve overall AP performance.
5. Compliance and risk management: AP professionals can ensure compliance with financial regulations, internal controls, and audit requirements. They can perform due diligence on vendors, assess and mitigate potential risks, and implement effective controls to prevent fraud and errors.
6. Strategic planning: AP teams can actively participate in strategic planning initiatives. They can contribute their expertise to budgeting and forecasting processes, provide insights on cost optimization, and support decision-making related to investment, expansion, or cost reduction initiatives.
7. Cross-functional collaboration: With more time available, AP teams can collaborate with other departments, such as procurement, finance, and operations. They can work together to optimize procure-to-pay processes, share insights and data, and drive overall efficiency and effectiveness across the organization.
8. Training and development: AP professionals can continuously learn and develop to enhance their skills and knowledge. They can stay updated on industry trends, new technologies, and regulatory changes. Additionally, they can train new team members or stakeholders on AP-related processes and best practices.
How does saving 40,000 hours per year sound?
Elkjøp, the largest consumer electronics retailer in the Nordic countries, partnered with Vic.ai to transform their manual AP operations. By leveraging a well-established AI platform, Elkjop automated invoice processing improved PO matching, and streamlined approval workflows. The implementation significantly reduced processing time, with invoices being processed in just 48 seconds compared to the industry standard of 8-10 minutes. With improved accuracy and efficiency, Elkjop is poised to save up to 40,000 hours annually, while advanced analytics also ensure they stay ahead of the competition.
"Partnering with Vic.ai will revolutionize our Accounts Payable operations and allows us to move beyond automation to having multiple workflows handled autonomously by AI. We look forward to seeing significant improvements in efficiency, accuracy, and cost savings." - Patrik Berglund, Head of Finance Operations, Elkjøp
The limitations of AI will guide future work
While AI is rapidly advancing and transforming various industries, including finance, there are certain tasks and capabilities that AI may need help with or may not be able to accomplish in finance departments in the future.
Contrary to common fears, AI won't replace jobs; it will enhance them. By augmenting human capabilities, AI technology empowers individuals to work more efficiently, make better decisions, and focus on tasks that require creativity and critical thinking. It's a partnership that leads to greater productivity and innovation.
Here are a few areas where humans will be required – now and in the future:
AI algorithms primarily rely on historical data to make predictions and decisions. However, ethical considerations in finance often require nuanced judgment and the ability to consider the broader societal implications. AI may not possess the human values, moral reasoning, and ethical judgment necessary to navigate complex ethical dilemmas.
Building trust and rapport with clients
Establishing trust and maintaining strong client relationships often involve emotional intelligence, empathy, and interpersonal skills. While AI can provide recommendations and insights, it may not possess the human touch required to build rapport and understand individual clients' unique needs and preferences.
Managing complex financial negotiations
Negotiations in finance often involve intricate strategies, tactics, and an understanding of human behavior. The art of negotiation goes beyond data analysis and requires intuition, adaptability, and creativity, which may be challenging for AI to replicate.
Dealing with unpredictable and unprecedented events
Financial markets are susceptible to unpredictable events such as economic crises, political upheavals, or natural disasters. AI models are typically trained on historical data, making them less equipped to handle entirely novel situations that deviate significantly from past patterns.
While AI excels at analyzing large volumes of data and identifying patterns, it may struggle with contextual decision-making. Financial decisions often require considering a wide range of factors, including qualitative information, market sentiment, regulatory changes, and geopolitical events. AI may have limitations in accurately interpreting and incorporating such contextual information.
Legal and regulatory compliance
The finance industry operates within a complex framework of regulations and compliance requirements. While AI can assist in automating certain compliance tasks, it may not possess the legal expertise and the ability to interpret and navigate intricate legal frameworks.
Human judgment, critical thinking, and certain interpersonal skills will likely remain essential components of finance departments, which AI can't solve. But, finance leaders must recognize all the other areas AI can handle to augment the staff. With 80% less time spent on invoice processing, it's like hiring without costs to shift tasks. By focusing on these higher-value tasks described, AP teams can contribute more strategically to the organization, add value beyond transactional processing, and drive overall financial performance and operational efficiency.