Many innovations throughout history, from the printing press to the light bulb to the airplane and the personal computer, led to dramatic societal and business expansion in periods frequently described as technology revolutions. Today, we are on the cusp of another one — with artificial intelligence starting to transforming the world with the same impact as earlier revolutions. One need only look at generative AI (e.g., ChatGPT) to understand the opportunities for AI that exist in the consumer marketplace. Truth be told, AI holds even greater promise for businesses.
In the AP arena, leaders will soon be able to leverage powerful AI capabilities, such as machine learning (ML), neural networks, deep learning, and natural language processing (NLP), to fundamentally transform tactical and strategic AP activities. The longer-term promise of advanced and predictive analytics within AP is even more compelling.
AI Expands Existing AP Automation
The AI journey begins with automation. Many enterprises have implemented automation throughout various AP and procure-to-pay (P2P) process segments (e.g., invoice/order receipt, data validation/matching, approval routing, and payment). Existing AP automation across the spectrum of solutions — from OCR to eInvoicing to ePayments — have opened the gateway for AI as an extension or complement to those automated solutions.
AI delivers cognitive intelligence whereby AP and P2P leaders and their teams can synthesize volumes of invoice, supplier, and payment data, as well as valuable historical information into insights to streamline process flows and elevate decision-making. These once-underutilized data repositories can be strategic and competitive differentiators with AI as an underlying value driver.
Utilization of AI Takes a Leap Forward
The perception of AI as a game changer and value-added technology is strong among AP leaders. According to Ardent Partners, 31% of AP teams use AI within their AP operations today. Breaking that number down further, 11% of respondents report that AI is embedded in their core ePayables (i.e., invoice-to-pay) technology, 7% access AI via solutions that are integrated to their ePayables offering, while 13% report that AI is present in separate platforms not connected to their ePayables systems.
Most significant in the survey responses is that 45% plan to use AI in their AP operations over the next 12 months, meaning that 76% of AP departments overall will be leveraging AI in their enterprises within 12 months. Still in its technological infancy, AI’s exponential growth and utilization are evidence of what is to come. While automated ePayables solutions help optimize and streamline invoice and payment processing, AI is poised to transform these solutions well beyond core process automation engines.
Accounts payable is entering a transformative period where artificial intelligence will permeate its processes and solutions. For the 23% of respondents with no plans to use AI within the next year, there is a competitive risk compared with enterprises leveraging AI for process efficiencies and cost reduction.
AP Use Cases
While the grand vision of an all-encompassing AI technology that drives predictive decision-making and incorporates a humanistic level of reasoning to actions remains both daunting and aspirational, the immediate impact of AI over the next 24 months is quite compelling. The integration of AI in AP operations will help streamline processes by reducing manual effort and human error. This efficiency will lead to faster invoicing and payment processing, which will enable smarter cash management. AI will also enhance accuracy and transparency across the AP operation, which will help improve decision-making and resource allocation.
Where are the immediate opportunities for AI in accounts payable processes? Consider these use cases illustrating the transformative potential for next-level AP/P2P when integrating artificial intelligence.
Invoice Capture and Data Extraction
Traditional data capture from invoices, whether manual or electronic, is time-consuming, costly, and prone to errors. AI-powered technology automates the extraction of critical data, improving accuracy over time through machine learning algorithms. By eliminating manual entry, AI expedites processing, reduces errors, and frees up AP professionals for value-added tasks.
Invoice Processing
Machine learning technology is prevalent throughout financial processes. In AP, existing automation can route invoices, based on unique characteristics, to the same person or group for approval. The introduction of AI-powered algorithms will add greater nuance by leveraging historical data and approval patterns to develop more dynamic and streamlined approval workflows.
Fraud Prevention
Preventing fraud with traditional automated AP solutions provides a good foundation. Using AI algorithms, volumes of historical transaction data can be quickly reviewed to identify any unusual patterns or anomalies, generating a real-time alert and other warnings. By utilizing AI in fraud detection, enterprises can better minimize financial losses, safeguard their reputation, and ensure compliance with regulatory requirements.
Data-Driven Insights and Reporting
AP sits on a wealth of data collected over years that unfortunately has gone largely untapped in most organizations. Combining AI technology with ePayables solutions offers the promise of unlocking this data and making it more easily available to enterprises of all sizes. By analyzing vast amounts of financial data, AI algorithms can generate real-time reports and provide critical insights on a wide variety of areas for AP and the enterprise, including outstanding invoice liabilities, cash flow forecasts, early payment discounts, vendor performance, cost center and spending patterns and forecasts, and budget allocations. These insights can then be delivered not simply as reports but included in role-based dashboards, enabling AP managers, CFOs, treasurers, procurement, and lines of business to make better-informed decisions and optimize their financial operations. With such insights in hand, organizations can make better-informed decisions and identify potential issues or opportunities that were previously below the surface waiting to be discovered.
The adoption of AI in AP is not without challenges. Organizations will need to address concerns related to data security, privacy, IP infringement, and the ethical use of AI. Additionally, ensuring effective integration and user adoption of AI systems requires careful planning, training, and change management strategies. With that said, AI has the potential to be a game-changer for AP, delivering immediate and long-term advantages. As AI takes hold in the market, the enterprises equipped to reap the most benefits will be those with core AP automation (or “ePayables”) solutions in place. The race is on!
