A well-executed accounts payable process is a valuable asset to every organization. Faster clearance of invoices results in better cash flow management, improves vendor relations drastically and even results in you availing great deals/discounts due to timely payments.
However, while this level of efficiency is desired by all, in reality, most AP processes are subject to a large number of bottlenecks that often result in avoidable delays, late payments and penalties incurred for the same.
These errors or inconsistencies that arise during accounts payable processing are often called suspects or suspect data as the data received or extracted from the invoice is unclear, incorrect, or does not match the original purchase order.
These suspects arise most often due to missing or incomplete information as machine learning is often able to capture only 60% of the data fields in an invoice, leaving the rest to be deciphered by effort-based manual processing. Therefore, any accounts payable processing solution must take due cognizance of the challenges presented by these errors and offer a streamlined solution for effective resolution.
Let’s take a look at the primary hurdles in accounts payable processing, including suspects:
As per a study by Ardent Partners, nearly 23.2% of all invoices still require exception handling. This is caused by suspect or erroneous data that is often a result of blurred or unclear images and even incomplete data fields that need to be flagged for review and resolved immediately.
Irrespective of the cause, all suspect data needs to be tracked down and resolved by referring to the invoice image or the original purchase order for verification. In case OCR data capture is unable to identify certain characters, then automated extracted of data is no longer possible and the relevant information has to be processed manually by an experienced analyst.
While according to PaymentsJournal, duplicate payments may represent only 0.5% of an organization’s overall payments, they are still quite costly errors as they pile up into a huge loss in the long run.
A major factor contributing to these duplicate payments is duplicate invoices that slip through the cracks and are cleared for payment. However, an equally likely culprit is also delayed or missed payments. This can result in your team scrambling to clear these dues and processing these missed invoices more than once.
Incorrect Vendor Details
Organizations switch vendors and onboard new ones frequently. In order to correctly track and clear the invoices, most organizations depend on a vendor master sheet where the vendor details are recorded. However, any errors in these details, especially the bank records details, can result in you losing money due to incorrect payments or unmatched invoices that take up your precious time and internal resources to resolve.
Unclear Images or Missing Information
Despite the push towards digital payments, many companies still find themselves dealing with paper-based invoices and forms that need to be digitized for faster processing. Manual data processing from these forms is a highly tedious task that is also prone to errors, pushback, and careless mistakes.
Digitizing and processing these files requires companies to upgrade their resources internally, including high-speed scanners and highly-skilled automation experts to process this data efficiently.
The combined hassle of processing paper invoices, exceptions and suspect data, missing invoices, errors, and incomplete invoices all contribute to what most organizations agree is the next major challenge in accounts payable processing.
These errors lengthen the processing cycle for clearing all received invoices as precious hours are spent in tracking down the original purchase order to verify invoice details and even contacting the vendor for a fresh copy of the bill/invoice.
The ARDEM Advantage in Accounts Payable Processing
ARDEM has nearly 2 decades of experience in engineering successful solutions accounts payable processing, with every solution being customized to each client’s specific needs.
We further build in additional efficiencies into your accounts payable processing by combining our proprietary automation technologies with our fully-trained teams of accounting specialists.
ARDEM Automation combines the latest in machine learning and AI to interpret data from invoices and runs data validation to ensure that all fields of data are extracted swiftly and accurately in a fraction of the time it took to complete manually.
Identifying and Resolving Suspects
When it comes to resolving suspects, ARDEM has established several protocols for handling and resolving suspects. Any characters or data fields that cannot be accurately deciphered by OCR data capture are immediately flagged and sent to be reviewed by our accounting experts. Our analysts then fill in/correct the missing/inaccurate data by comparing it against the respective invoice image. If that fails as well, then our analysts reach out to your vendors for a copy of the original invoice and use it to verify and process the suspect data.
Our accounting experts are always on standby, ready to flag and report all suspect data and track down the original details for timely resolution and processing.
Discover how ARDEM implements accounts payable controls to eliminate errors and mitigate risks in your accounts payable processing:
- Once invoices are received on our collaboration platform, they are automatically ingested into the processing cycle.
- Information from different data fields is automatically captured using OCR data capture according to the different formats and templates.
- In case certain fields of data cannot be extracted, the invoice is flagged for review.
- All flagged invoices are sent to be reviewed by an analyst who checks for quality and any flagged data fields.
- All suspect fields are checked and corrected by comparing the extracted data against the invoice image.
- In case of incomplete data, the respective data fields are checked and corrected by comparing the extracted data against the invoice image.
- If data from the required fields is missing, then the invoice is flagged for resolution processing.
- Our team reaches out to suppliers for a clean copy of the invoice/PO.
- We process the suspect invoice by using the new invoice/PO received.
- The data is run through quality assurance measures once all flagged items have been corrected.
- Accurate data is delivered right on time for faster accounts payable processing.
If you would like to learn more about ARDEM can customize an accounts payable processing solution for your needs, schedule a free, no-obligation consultation with our team today!