As ghosts and ghouls come out to play this Halloween, business leaders are faced with a different kind of haunting - the unseen spectres lurking within their Accounts Payable (AP) function. Much like elusive phantoms, hidden costs within the AP process hide in the shadows of complex procurement processes, silently chipping away at your company’s bottom line. In this blog, we will shed light on the on the shadowy corners of your procure-to-pay cycle and explore how AI can banish these financial phantoms from your organisation.
Hidden Costs of Accounts Payable:
- Manual Data Entry: The manual entry of invoice data is a time-consuming and error-prone task. The labour and time costs, alongside the potential for human error, can lead to significant financial drain. You might respond that your company uses an AP automation solution, so this couldn’t possibly be a problem. However, with basic rules-based automation, a significant proportion of AP processes still require manual intervention.
- Audit Challenges: With manual processes, creating and maintaining an accurate and compliant audit trail can be arduous. The resources required to manage audits and ensure compliance can escalate quickly.
- Scalability Expenses: As your business grows, the AP function can become a bottleneck if not scaled properly. The additional personnel and system upgrades needed can incur considerable costs unless the AP function is near-autonomous.
- Late Payment Penalties: Manual AP processes can result in delayed payments, accruing late fees, and interest penalties, further straining the financial health of your business.
- Reputational Costs: Late payments and process inefficiencies can strain vendor relationships and tarnish your reputation, which may result in less favourable payment terms or even loss of vendors.
AI-Enabled AP Automation
Transitioning to an AI-enabled AP process can eliminate these hidden costs, bringing clarity, efficiency, and protecting your bottom line.
- Reducing Manual Intervention: AI can drastically reduce the necessity for manual data entry by automatically capturing and processing invoice data, saving time and reducing errors. Kloo uses Optical Character Recognition to ‘read’ invoices and upload the necessary information into the system.
- Streamlining Audit Trails: By matching invoices to purchase orders with high levels of accuracy, context-based AI-automation ensures a seamless, accurate, and compliant audit trail, making audits less resource-intensive and more straightforward to manage.
- Enhancing Scalability: With AI, the AP process can scale effortlessly with your business growth, without the need for substantial additional resources or system upgrades.
- Timely Payments: Automated workflows ensure that payments are processed in a timely manner, reducing the chance of late payment penalties and helping to maintain healthy cash flow.
- Improved Vendor Relations: By streamlining the AP process and ensuring timely payments, vendor relations are enhanced, and a positive reputation is fostered, potentially leading to better payment terms and continued business partnerships.
Conclusion
The modern business landscape requires a robust and efficient AP function to thrive. Banishing the hidden costs lurking within manual AP processes is not just a means of propelling your business into a future of financial clarity, but a necessity in fostering sustainable growth and solid vendor relationships. The transition might seem daunting, but the operational efficiencies gained will surely make the endeavour a worthy one. With AI-powered AP automation, the once ominous AP shadows are dispersed, unveiling a path of financial stability and sustained growth.
