Picture walking into your office on any given morning. Settling in with your morning cup of coffee, and saying aloud: “Who needs to get paid today?" But this is the office of the future, and your otherwise rhetorical question is answered by an AI bot:
"You owe the Michael Scott Paper Company $750."
This Jetsonian future may have seemed far-fetched just five years ago, but with the advent of chatbots such as Amazon's Alexa—the most developer-friendly of all the platforms—this future is a lot closer than it appears.
Getting to this "AP of the future" starts by improving small parts of your department today. Simply put, the tools you start using today will pave the way to the accounts payable department of the future.
And this is how AP automation will get you there.
The first stop on the road to automating AP is digitizing your payables workflow.
Digitizing the workflow involves cutting out the paper invoice, which oftentimes, requires rewriting supplier agreement contracts. This rewrite, then, should make explicit how invoices will only be accepted electronically: either by email email or a supplier portal (more on that in a moment).
And those luddite suppliers who refuse to email an invoice? A virtual fax service can bridge the gap between the analogue and digital world. Virtual fax numbers can digitize faxes and email it to an address you specify. From there, the invoice is treated as if it were emailed or submitted through the supplier portal.
You've got a digitized invoice, but only you can read it—your computer can't.
That's where OCR comes in. OCR, or object character recognition, is how your computer converts the flat image of an invoice into something more like an Excel spreadsheet—an editable and highlightable version of the submitted invoice.
At this point, the gears of automation trigger a comparison between the PO, the packing slip, and the invoice—the matching process. If all three match up, then it's on to the next step.
Note that up until now, the invoice has required no human interaction. It's been submitted by the supplier, automatically matched and flagged as ready to be paid.
In the world of automation, then, the AP practitioner serves the role of a traffic cop, making sure things move along smoothly. If those three matching items don't match, then an exception is thrown. That's when the AP clerk sorts through the jam.
Once the mystery of the unmatched trio is resolved, the accountant flips the switch and the automation process resumes.
And on to payment authorization!
Regardless of how complicated an organization's approval hierarchy is, the automation machine diligently seeks payment approval from each and every approver in an approval chain—even so far as substituting managers on vacation for other higher-ups (as would be the case if HR data is shared with AP—again, more on that shortly).
Again, this is all done automatically. Gone are the days of the walking around the office corridors getting payment signature from managers and other C-suites.
Gone, too, is the need to schlep a batch of checks to the post office.
Payments are automatically issued and sent once approvers have OK'd it. And once a payment has been OK'd, what else is really left to do? Electronic payments automatically send payment either through ACH, card, or even printed check (if paired with a check printer and mailing service).
Recall the example above, how in an ideal authorization workflow, the automation process works around an absent authorizer, rerouting to whomever is covering that person's responsibility. This is achieved through platform integration.
APIs, or application programming interface, are “hooks" in software that allow other software application to make “calls" into it. In the case of our smart authorization routing, a hook was created that allowed another piece of software to call into it, allowing it to find out who's on vacation. Another call was made into the organizational hierarchy, so the workflow knew who to substitute.
But that's just a simple example.
A more complex example would allow you to roll many different APIs together—like a chatbot API. You'd then have an automated AP department that could take take action from a spoken command, such as:
"Go ahead and pay the Michael Scott Paper Company, but try to negotiate a better rate."
The road to AP automation takes us through the onramp of platform integration. Where will your organization go with an improved AP department?