In today's fast-paced global market, UK manufacturing companies grapple with a number of challenges. As the complexities of post-Brexit trade and escalating raw material costs are felt increasingly strongly across the industry, one critical area often overlooked for cost savings is the accounts payable (AP) process. Traditional manual workflows or even rudimentary automated systems are not only time-consuming but also error-prone. In today's competitive climate, enhancing AP processes through advanced AI automation could lead to significant cost reductions and efficiency improvements..
The Issue: Manufacturers deal with thousands of suppliers, receiving a vast array of invoices that vary in format, currency, and terms. Relying on manual processes for such a volume leads to considerable administrative expenses.
While elementary automated systems provide some relief, they do not fully address the nuanced demands of the manufacturing sector. For example, it's common for a single supplier invoice to cover multiple purchase orders, particularly with large or staged deliveries. Discrepancies, such as mismatched company names—full versus abbreviated—on purchase orders and invoices, often mean that basic automated systems fall short. These scenarios typically require a manual intervention to resolve, which is inefficient.
The Solution:
Kloo's advanced AI-driven AP software is designed to handle complex scenarios efficiently. It employs advanced optical character recognition to extract data from invoices accurately and employs sophisticated algorithms to align invoices with their respective purchase orders accurately. This system operates with minimal need for human input, ensuring high precision.
There are huge cost savings to be made for manufacturing firms processing large quantities of invoices for materials. According to Goldman Sachs report, a mid-size enterprise incurs approximately £13 manually processing each invoice, which adds to eye-watering sums for a manufacturing company processing tens of thousands of invoices per year.
The Issue:
Manufacturers often negotiate prices based on various factors, and ensuring the invoiced amount matches the negotiated rate is pivotal. Furthermore, seasonal demand results in cyclical influxes of invoices. Transparency and good documentation are key for keeping track of such a changeable environment, manual AP systems often fail to provide adequate financial oversight, as it takes time to manually input and match invoices, failing to keep up with the agility of the industry. This lack of up-to-date, accurate information in accounts payable runs the risk of overpayments, late payments and strained supplier relations.
The Solution:
Implementing intelligent AP automation ensures a high level of transparency and maintains a detailed audit trail from the purchase order to the proof of payment. This not only facilitates better financial management but also allows for quick decision-making, giving businesses the adaptability they need.
The Issue:
In the landscape of manufacturing operations, accurate financial reporting stands as a cornerstone for sound decision-making and future projections. A vital component of this reporting is the apt categorisation of expenditures into Capital Expenditure (CapEx) and Operating Expenditure (OpEx). When businesses rely on manual systems or rudimentary automation, not only does this categorisation risk becoming imprecise, but the entire financial recording process can become clouded by inefficiencies and delayed or incorrect data entry.
The Solution:
Kloo offers unlimited custom fields to ensure precise categorisation that ensure expenditures are consistently and correctly recorded so decision-makers have clear and detailed insights into spend and cashflow.
In the continuously evolving landscape that UK manufacturing companies navigate daily, modernising the AP process emerges as a pivotal strategy. The enhanced agility, precision, and efficiency that AP automation software brings can be a game-changer. By reducing errors and streamlining processes, companies not only safeguard their bottom line but carve a pathway to sustained growth and competitiveness in a demanding market.
Learn more about how Kloo delivers unprecedented efficiency in your Accounts Payable.