In recent years, businesses have increasingly adopted straight-through invoice processing to address challenges in AP invoice management. Read on for a deep dive, benefits, and hands-on tips for implementing this approach to reduce AP processing costs, shorten cycle times, and eliminate exceptions.
Liberate Your AP Team From OCR
AP departments are grappling with the continuous influx of paper and PDF invoices, often resorting to optical character recognition (OCR) for data transfer into ERPs. This method, while common, leads to invoice exceptions, a significant challenge for AP professionals. To counter this, businesses are considering straight-through invoice processing techniques to automate AP processes, reduce manual labor, and decrease costs.
Straight-Through AP Invoice Processing Explained
Straight-through invoice processing involves validating and transferring invoices directly into the ERP system upon receipt, without manual intervention. Achieving this requires a focus on three key aspects: Platform, People, and Process.
Platform: Choosing the Right Solution
Transitioning to a technology platform capable of straight-through invoice processing is essential. Flexibility in handling various supplier formats is crucial. Unlike OCR-driven solutions, the best platforms use a digital supplier network, applying AI for invoice validation without manual intervention.
People: Organizational Alignment
Moving from manual processing to straight-through invoice processing provides an opportunity to reallocate resources within the AP department. Close collaboration between AP, Finance, and IT teams is vital for a successful transition.
Process: Evaluating and Enhancing Internal Processes
With a new platform and reorganized team, evaluating internal processes is the final step. While AP automation offers significant benefits even without purchase orders (POs), encouraging PO usage enables two and three-way matching, automating verification and approval processes.
The Benefits of Straight-Through Invoice Processing
Straight-through invoice processing extends benefits beyond the AP department, impacting the entire organization. Eliminating invoice exceptions expedites payment processing, reduces costs, and enhances overall efficiency throughout a business and its supply chain.
Benefits to AP
Resource optimization by eliminating manual data entry and OCR verification steps
Elimination of invoice exceptions as suppliers resolve them before they reach the AP inbox
Improved supplier relations with predictable payment cycles and enhanced visibility
Benefits to the Organization
Strengthened supplier relationships
Enhanced visibility into outstanding liabilities
Scalability of cash management programs
Mitigation of potential supply chain disruptions
The OCR Conundrum: Addressing Common Issues
Optical Character Recognition (OCR), a prevalent method for digitizing PDF invoices, often returns inaccurate information due to its character recognition algorithms. Achieving 100% straight-through processing requires true digital connectivity.
Building a Connected Supplier Network
Connecting suppliers digitally is a crucial step toward achieving 100% straight-through invoice processing. A digital connection expedites communication and automates issue resolution.
Increasing Efficiency with AI & Machine Learning
Recent advancements in AI and machine learning have the potential to significantly impact AP processes. Leading platforms leverage these technologies for specific use cases, enhancing operational efficiency.
Straight-Through Invoice Processing Checklist
Choose a platform that supports straight-through invoice processing and does not use OCR.
Align key members from AP, Finance, and IT departments.
Redistribute internal resources away from manual tasks.
Choose a platform provider that connects suppliers to a digital network.
About Transcepta: Transforming AP Processes
Transcepta has been a leading force in automating AP processes for nearly two decades. Their platform offers a seamless transition to a fast and accurate online system, reducing errors and enhancing efficiency for organizations of all sizes. Explore the transformative journey with Transcepta to streamline your AP processes from end to end.