Time and again our Accounts Payable experts have emphasized the importance of automation in Accounts Payable, its benefits and the necessity to adopt it. In general, an automated AP solution automates the manual tasks to improve your accuracy, but only when aided by AI and Machine Learning does this automated AP solution truly pack a punch when it comes to improving your AP performance, productivity and ultimately the bottom-line.
Confused how both automation and AI are different from each other and what role AI and machine learning plays in improving your AI performance? Then this blog is for you.
Being one of the best remote accounting firms in the business, Back-office Accountants always stays abreast of the accounting trends in the market. To help you catch up, in this blog we focus on basic differences between automaton and AI and then help you understand how they can transform your AP process with their applications in Accounts Payable. Read on:
Accounts Payable – Automation vs AI & Machine Learning:
To a layman, both the terms automation and AI may more or less sound the same and are used interchangeably, but evidently, they are not.
Automation has one goal which is to automatically perform repetitive and mundane tasks which consume a lot of time and effort when done manually. Automation frees up the time for humans to help them focus on better and more purposeful things. But the crucial aspect of automation is that all the automated tools are driven by a set of rules i.e. they are configured with certain guideline which they follow to get the work done, which is unlike AI.
AI is an umbrella term for technology that helps these machines think and mimic human actions i.e. AI imparts decision making the ability to the machines and Machine learning is what helps them do so. An AI tool constantly looks for patterns in the given data to make appropriate decisions.
For example, when you present a huge database of credit card transaction information – time, date, location, merchant and transaction amount an AI tool looks for patterns and learns to predict fraudulent transaction, More information you use to train the tool, its Machine Learning helps it become more adept at detecting the fraud before the fraud happens – which is a job most times humans fail at.
In essence, automation is a tireless and obedient worker who gets your work and AI is a superpower that makes him smart to transform the entire process and improve your efficiency and productivity. So automation coupled with AI gives you a true power to level up your work process whether it is general accounting Accounts Receivable or Accounts Payable.
Applications AI in Accounts Payable:
Given how data-centric Accounts Payable can be, AI that feeds on data can significantly boost your AP workflow with the following applications:
- Automation: Automation of repetitive tasks is a yesteryears concept but when it comes to accounting automation can truly shine only when coupled with AI and Machine learning. While data entry, invoice filling matching routing and retrieval may seem simple enough to be automated, it’s only with AI and ML, the data identification, extraction, data linking for exception resolution and appropriate routing can be performed accurately. For instance OCR, NLP and Machine Learning work together to enable extraction of relevant data and understanding of its context to categorise and process them. So accurate automation in AP is possible only with AI.
- Analytics: Analytics is where AI truly shines with its Machine learning capabilities which constantly works to become better at what it does – learn, process and predict and take decisions. From forecasting your future revenue to predicting your cash flow and expenses, AI can play a critical role in your financial planning to help strategize your plan of action.
- Fraud detection: Invoice fraud, check tampering, reimbursements, kickback and billing schemes are some of the common Accounts Payable fraudulent activities that can be avoided using AI and automation. AI analyses the data to check for the patterns and identify the out of normal behaviour that may indicate common AP fraud.
- Compliance: When it comes to compliance auditors face a tough challenge in evaluating large volumes of data in documents and contracts to check for compliance. But with AI the entire complex can be avoided by automating manual tasks and harnessing Machine learning to review and analyze the volumes of financial data to identify any anomalies and bring the high-risk financial documents to prompt attention. This way auditors can focus their efforts on improving the efficiency and productivity of the entire process.
The above applications in AP, AI and Machine learning can improve accuracy, reduce errors, avoid fraud, save costs, helps in faster resolution of disputes and improves your financial planning. If you are looking to adopt AI tools into your Accounts Payable process, we highly recommend the step as our Accounts Payable experts at Back Office Accounts have already reaped sizeable rewards with AI adoption.
However, if you are only starting and are looking to benefit from Automated Accounts Payable Services without risk of investment, you can simply outsource Accounts Payable Process to our AP experts at Back Office Accountants. You can contact us here: https://www.backofficeaccountants.com/