AP » The technologies that will automate and transform the role of finance

The technologies that will automate and transform the role of finance

Kloo co-founder Tim Baker believes artificial intelligence and process automation can help transform the role of finance teams

Technology can speed up invoice processing and enable finance teams to focus on strategic advice and business partners. One area that has seen a significant improvement is invoice processing, which used to be a time-consuming and tedious task for accountants.

“[Technology] automates manual processes such as data entry and document matching,” says Tim Baker, co-founder of software provider Kloo. “This reduces errors, speeds up processing times and frees up accounts payable staff for more strategic tasks.”

With the help of advanced software, accountants can now process invoices quickly and accurately, freeing up their time to focus on higher-value tasks such as analysing financial data and providing strategic advice.

This shift is transforming the role of accountants from back-office number crunchers to trusted financial advisors who can help their companies make better decisions and drive growth.

“Advanced technologies like AI and machine learning can automate more complex tasks, such as fraud detection and invoice coding,” Baker explains.

Mistake prevention

The work of accounts payable teams requires significant attention to detail, but Baker warns that serious mistakes can be made when they are under huge pressure.

“Many firms still rely on manual processes, such as paper-based invoices checks,” he said. “This can lead to errors, delays and inefficiencies.”

Data entry mistakes, for example, can lead to incorrect payments and disputes with vendors, while there is also the looming risk of fraud going undetected.  The lack of visibility into the status of invoices can also make it difficult to track costs and manage cash flow, while failing to ensure processes are compliant with regulations may result in fines.

“Automating processes can help to improve accuracy and speed up invoice processing times,” saysBaker. “Treating approvals as a tick-box exercise can be another mistake.”

This is particularly the case if the default behaviour of a business is to approve invoice and purchase order requests immediately to save time – or without the information needed to make the call. “Implementing an approvals system and process that enables both automation and well informed decision making can be a great way to save time and ensure the company’s money is being spent efficiently,” he added.

In addition, maintaining open lines of communication with vendors is essential to ensure they have accurate information and can resolve issues that arise.

“Poor communication can lead to misunderstandings, disputes, and delays in processing invoices,” Baker says.

Additional technology benefits

 Of course, saving money is not the only upside. Analysing insights gleaned from accounts payable automation technology can also provide enormous benefits. “Businesses can identify spending patterns and opportunities for cost savings,” Baker notes.

In addition, by tracking vendor payment history they can discover information relating to on-time delivery, quality of products or services, and responsiveness to inquiries.

This can be used to evaluate vendor relationships and negotiate better terms, while tracking invoice and payment data highlights cash flow positions and informs decisions about working capital.

“When it comes to making payments, there are also a lot of opportunities to leverage new approaches such as faster payments and open banking to both lower fees and reduce the time taken to make a payment run,” Baker adds.

Myth busting common misconceptions

 While technology can automate many of the manual tasks involved in accounts payable, it is certainly not a complete replacement for human involvement.

“It still requires the expertise of skilled staff to manage vendor relationships, negotiate payment terms, and make strategic decisions,” Baker says.

Baker also believes improvements can be made when it comes to highlighting how accounts payable processes affect both the finance team and the wider business.

Improving the user experience for everyone, he believes, will help encourage everyone in the business to adopt technology and enjoy the benefits.

“Non-finance teams should be able to request spend, approve team members spend and confirm receipt without having to log into a complicated finance tool,” he said. “There is a constant need to consider convenience alongside sufficient data for commercial decision making.”

Looking to the future, Baker believes AI and machine learning will increasingly be used to automate manual tasks and improve efficiency. “For example, these technologies can be used to automatically match invoices with purchase orders and reduce the need for manual intervention,” Baker says.

He also predicts that process automation will be able to automate more complex tasks, such as exception handling and vendor onboarding.

This should free up the accounts payable team for more strategic activities, such as managing vendor relationships and negotiating better payment terms.

“Advanced data analytics tools will enable accounts payable teams to gain deeper insights into their spend data, identify cost-saving opportunities, and improve vendor management,” Baker says. “These tools will use AI and machine learning algorithms to analyse large volumes of data and provide actionable insights.”

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