While it may sound like the backdrop for a science fiction novel, machines are getting better at helping businesses manage their accounting needs. In today’s technological landscape, there are a plethora of apps that integrate with popular accounting software to help expedite difficult processes that can get bottlenecked by humans. Based on the versatility of current AI build-outs, it is highly likely that no matter which accounting software your company uses, there is an AI-based technology available that can help you to manage your AP processing in a smarter, faster, and more accurate way. This type of time-saving technology is especially helpful for nonprofits who need to make the most of the resources and the human capital at their disposal.
Improved Data Entry
AI applications help with automation by using OCR technology to read and scan PDF images of invoices that capture critical information. One of the biggest time-saving components of this feature is that it speeds up the data entry processing significantly, through auto-capturing key details. Once it is imputed into these various systems, it is quickly added into a workflow that is automatically sent to individuals for approvals. This tech is even smart enough to circle back for payments and disbursements to be issued, which is more than a lot of accounting departments can say about their employees!
The other factor to remember is that the AI automatically implements information into the cloud where it won’t be lost, and can be easily accessed later. This implementation of the OCR cloud-based tech means that workflows are automated, which helps to get invoices imputed and paid faster.
Stronger Internal Controls
One of the hallmarks of using AI to improve your AP processing is that it allows for a stronger set of internal controls. Anytime that you are engaging with a third-party vendor or internal management, it is a high risk to your business. If you are outsourcing your AP processing to an outsider without a system like this in place, it opens your organization up to more vulnerabilities, due to the lack of internal control. This increases the likelihood that you could be exposed to theft or loss. Having controls to make sure that there is a check put in place to issue disbursements on your behalf before a third party has the ability to access your bank account, can add an extra layer of protection. This is an easy and straightforward way to implement risk mitigation and adds peace of mind. Having this technology in place allows for policies to be automatically enforced without a need for a human to intervene, which eliminates the need for uncomfortable conversations around money.
Another added feature that many companies and nonprofits love is that these systems typically have a control built in that prevents duplicate payments, by quickly scanning for duplicate invoice numbers. You can actually adjust the settings so that they will give you a warning to alert you if anything has been duplicated. This helps to keep you on the right track so that your accounting department isn’t paying twice for what you owe.
Using the power of AI can allow you and your vendors to email invoices straight to an inbox that allows you to process them on the fly. It automatically saves you a copy of the bill and attaches it to the transaction, which creates an extra layer of transparency and visibility. The invoice information lets you see exactly what is being paid for and automatically generates the supporting documentation to back up those expenses. This feature also benefits your internal teams because it allows for tighter internal controls, since approval only occurs by designated individuals, which allows for multiple approvals throughout the multifaceted review process.
Nonprofit organizations can especially benefit from the ease of internal approvals that AI provides because they typically will have more stringent approval requirements for spending money. For any large organization (think those with Executive Boards) multilevel processes and reviews can really help expedite the AP process.
Added Vendor Security
Many nonprofits will typically send vendors a check in the mail for their services. However, integrating with an AI-based AP processing application allows for you to pay vendors through direct deposit, which is faster, meaning that vendors are happier on payday. This process is more secure than standard check-writing, making it a good protocol to adopt. As a bonus, it also automates the actual entry piece to your accounting system so that everything is recorded, making it easy to match transactions so that you don’t have multiple entries.
Added Transparency for Donors, Funders, and Government Loans
When we work with Nonprofits, who tend to have more oversight in how they are spending their money, they have a need for a stronger set of internal controls, especially over disbursements. This technology allows for policy enforcement over a certain dollar amount limit to guard against misuse. Funders are looking for that type of wise discernment when they choose to invest in an NPO. Sometimes, the simple fact that an organization was prudent enough to have this type of system already in place attracts funders because it proves that the nonprofit organization is being a good steward of their donor’s money. Automating policy enforcement through this technology will also satisfy donors from the public and government entities’ concerns about resource management. Being able to show that your NPO has policies in place to properly manage funds, makes it much more likely that you will receive additional funding in the future.
AI Can Help with AP Processing
Due to the complexities of managing AP processing, it’s important to make sure that you choose technology that has the support you need to make sure everything runs efficiently. It’s important that when a company selects an AP processing tool, they also implement technology stacks that are reliable and paired with industry-leading tech support. In addition to added support, it’s crucial that any AI-based technology also comes with the appropriate level of controls that are appropriate for the size of the business. For many companies looking to integrate this type of technology, their financial statements are riddled with inaccuracies. Having a clear system for policy enforcement built into the software can help eliminate some of these issues.
Clients will also have problems such as not knowing what their actual liabilities are, and in some cases, they are even fielding phone calls from upset vendors demanding overdue payments. However, once these processes are implemented using sophisticated AI applications, it ensures that payments occur on time, every time. While it may seem like a separate issue, even concerns around bigger picture business KPIs, like cash flow, could stem from poor management of your AP processing. Remember, when you invest in the right tools that can help you streamline your AP processing, you are also investing in enhancing every aspect of your organization. If you are having concerns around AP Processing for your Nonprofit or corporation, schedule your free consultation today to connect with VaroTeam and get the help you need to enhance your AP processes.