Straight-through invoice processing is an incredible and intelligent automation tool for accounts payable (AP) teams. According to Ardent’s State of ePayables 2019: Driving Value in the Age of Intelligence, best in class AP organizations achieve straight-through processing with 65% of their invoices.  Imagine in your organization — 65% of your invoices would never be processed by staff members. What would you do with all that time back?

How is straight-through AP invoice processing achieved?

In the invoice process, to remove the need for human touchpoints, a few things need to happen.

Your invoices have to be in a true electronic format (e-invoice).

What is an e-invoice format?

For true straight-through processing, suppliers must send invoices to you as data such as EDI, XML, or CSV. A PDF invoice does not suffice, unless you are using Trancepta’s platform. If an invoice is not a true e-invoice, scanning or OCR (optical character recognition) is required.  

What is OCR, and why is it not suitable for e-invoicing?

OCR is a software tool that takes an invoice, scans, reads it and turns it into data that can be used to populate fields in an AP system. Unfortunately even the best OCR solutions have a high read error rate. For example, many times, OCR may think a “5” is an “S” or a “/” is a “1”.

One large company we talked to who was particularly frustrated with their shiny new OCR-based solution showed us that only 45% of their OCR invoices were readable, while 55% were of poor readability. Poor readability means you might as well be hand-keying the invoice (the invoice must be looked at and corrected by a person).

Because Transcepta does not rely on the OCR technology embedded in Oracle Financials Cloud Integrated Imaging (or any OCR technology period), Transcepta will enable you to achieve the highest level of straight-through AP invoice processing. 

You need to use Purchase Orders. 

To go all the way with straight-through processing and allow the computer to do the work, it makes sense that you are a PO-based shop. A PO means that auto-approval exists, and payment can occur automatically without any intervention so long as the invoice matches the PO. 

POs enable automated two-way or three-way matching to create a real straight-through AP process. Without using POs, you will be forced to use staff to approve and code invoices. 

In the previous example of the disappointed ERP customer, he found, upon closer inspection after his ERP implementation, about 40% of his invoices had POs while 60% did not. His dream of straight-through AP invoice processing was a little bit shattered from the get-go.

You need your suppliers to be networked.

It makes sense. It is not enough to receive invoices electronically and use purchase orders.

While this eliminates the need to key and approve invoices manually, it assumes that suppliers will put all the information you need on an invoice and that it will be accurate. But what if a supplier puts the wrong PO number on the invoice? What if the supplier doesn’t provide PO line item numbers on the invoice? To accept, reject, complete, and correct your invoices without human intervention, you need to be able to check (validate) invoices, make decisions, and collaborate with your suppliers using technology.

At this point, having your suppliers networked is crucial. And, a good supplier network provides many ways for vendors to send electronic invoices free of cost, in a format convenient for them and deliver to you the valid electronic format you need for straight-through processing. 

Transcepta's straight-through AP invoicing  

What is true e-invoicing?

No more scanning, keying, or manually validating ineffective OCR solutions. Transcepta employs true electronic processing for all invoice formats, including XML, EDI, CSV, and PDFs. In fact, we wrote a white paper on it. If you want to read more about e-invoicing and PDFs, just click here.

How does Trancepta apply artificial intelligence and machine learning to PO matching?

Within the Transcepta Network, Transcepta's AI inspects each invoice for accuracy and ensures the invoice is in the required format and required data is available. At that point, the AI compares the invoice to the PO to perform the match. If no PO number or PO item line numbers are present, Transcepta AI and proprietary machine learning algorithms electronically predict these elements, so your invoice will straight-through process. 

Based on your business decision criteria, Transcepta AI can even communicate with your suppliers via the Transcepta Network and ask suppliers to make relevant corrections. Your days of fixing your suppliers’ mistakes are over! 

The Transcepta Network is huge.

Transcepta's Network is vast due to a portfolio of Fortune 500 customers already using Transcepta's solution with their thousands of suppliers connected. The Network facilitates quick and straightforward onboarding at no cost to your suppliers, and it supports any invoice type so all of your vendors can participate. Transcepta's solution is multi-language, multi-currency, and VAT Compliant. 

For more information on straight-through e-invoicing, download our whitepaper that gives both a product overview and business case on the technology.