In the past two decades, there has been an abundance of enabling technologies for us to pick from. These enabling technologies have all been designed to help us improve our P2P processes –OCR/ICR, e-invoicing, EDI, workflow, supplier portals, etc.
These enabling technologies have all been designed to help us improve our Procure-to-Pay or P2P processes.
However, there is no ‘silver-bullet’ when it comes to AP automation or Procure-to-Pay automation. Rather, companies leverage a wide range of P2P tools to automate and improve their service.
Here is a look at some of the tools used to automate P2P
Scanning OCR/ICR. Scanning has come a long way since its inception. Optical Character Recognition and Intelligent Character recognition are much more advanced and accurate. Also called intelligent capture, there are many ways that data from paper or PDFs can be captured and uploaded into finance systems with high levels of accuracy.
e-Invoicing. e-Invoicing is the transmission of a structured data file, rather than an unstructured file. e-invoicing is more than just a digitized invoice. Sending a PDF by email is NOT e-invoicing. This structured data file (typically in a .xml format) is transmitted directly from the supplier’s system to the buyer’s system. To automate invoice processing, buying organizations ask their suppliers to send their invoices through their e-invoicing channels. The data could be transported through
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- EDI. Electronic Data Interchange, or EDI is a closed, point-to-point channel (EDI) which connects the supplier directly to the buyer. You can think of this like a pipe that connects data from buyers to suppliers. They have to be set up for each supplier, so will not be practical for all of your supplier network, but are often used with strategic suppliers or in certain industries.
- E-invoicing networks. E-invoicing networks (like Taulia, Tradeshift, SAP Ariba, Tungsten Network) take invoices from your suppliers and get them into your system electronically. Suppliers send invoices to your company through the network, and the network ensures the invoices are captured in your system.
- Supplier portals. Supplier portals are a way, typically for low-volume suppliers to enter invoice details into a portal, so you have the data electronically and you have a way to communicate with the supplier outside of email.
Read our ultimate guide to e-invoicing.
Standalone Supplier Portals. Not all supplier portals have e-invoicing capabilities. One of the biggest ways to relieve stressed-out AP teams is to give suppliers access to information about whether invoices are received, approved for payment or have an issue with them. Tips to make your supplier portal a success
Workflow. The days of sending paper or emailed invoices around the office is over. Workflow gives employees accessibility to the invoicing system meaning regardless of time or location, your finance team can process invoices – reviewing invoice status, payments, purchase orders and approvals. For those managing the system, invoice data was more easily available for detailed analysis.
Robotic Process Automation RPA. For a while, many thought RPA was going to revolutionize shared services. It has, and it hasn’t. RPA works brilliantly with repetitive tasks based on specific rules; if you put a process with too many decision points in scope or, worse, a broken process, it’s not as helpful a tool. The secret is combining RPA with other automation techniques and having a strong ongoing focus on process optimization. Do that, and your business will be well-placed to thrive now and into the future
Artificial Intelligence (AI). While uptake at the moment may be limited to early-adopters, in the next two years there is a very good chance you or your competitors may be using AI. At the moment we see AI in P2P
- Turning data into ‘community intelligence’. Software providers use data from thousands of companies to give you tailored intelligence and benchmarks.
- Powering better spend management. AI can Identify and improve sourcing opportunities, and how it can help you better understand your data and your supplier base.
- Driving touchless processing in AP. AI can help enter invoices, pass invoices within tolerance checks and guide disputes.
It’s early days still for AI in shared services and procure-to-pay, but the market is moving quickly. To future-proof your organization, it’s important to understand how AI is applied and how it can benefit your organization.
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