Manual invoice data entry and processing remains one of the most labor-intensive and time-consuming tasks. This task sits at the base of the finance function pyramid, requiring significant time and resources. However, AI-powered invoice processing is set to revolutionize this scenario, effectively inverting the finance function pyramid and allowing finance teams to focus on more strategic tasks.
The Manual Invoice Processing Challenges
One of the major challenges in invoice processing is the reliance on manual data entry. This process is not only time-consuming but also prone to errors, leading to discrepancies in financial records. Despite technological advancements, a staggering 57% of invoice data is still manually entered.
Traditional paper-based invoice systems are becoming outdated and can hinder the overall efficiency of the accounts payable department. These systems are more susceptible to misplacement, and loss, and are harder to track.
This traditional approach is not only tedious but also costly. On average, it takes 14.6 days to process an invoice manually, with each invoice costing around $15 to process.
AI-powered Invoice Processing: A Game Changer
AI-powered invoice processing offers a transformative solution to these challenges. By leveraging AI technology, finance teams can significantly reduce the time and cost associated with invoice processing, enabling them to focus on higher-value tasks. But how exactly does AI achieve this?
AI can extract invoice data with up to 99% accuracy from various sources, including email, WhatsApp, and API, in multiple formats such as paper-based, handwritten, or PDF documents. This high level of accuracy ensures that data entry errors are minimized, leading to more reliable financial records.
The technology is capable of scanning unstructured documents and tables, automatically extracting and adding each line item’s details. This includes capturing custom fields required from invoice documents and accurately mapping multi-language invoices to the company’s financial system. Such capabilities are particularly beneficial for global businesses dealing with a multitude of invoice formats and languages.
The Strategic Shift
By automating the data entry process, AI drastically reduces the time required to process invoices. What traditionally took 14.6 days can now be accomplished in just 2.5 days. Additionally, the average cost of processing each invoice drops from $15 to just $3.50. These savings in time and cost can have a significant impact on a company’s bottom line.
The adoption of AI in invoice processing marks a strategic shift in the finance function. By automating routine tasks, finance teams are freed to focus on more strategic initiatives, such as financial planning and analysis, which can drive business growth. This shift not only enhances the productivity of finance teams but also positions them as strategic partners within the organization.
As companies continue to adopt AI technology, the benefits in terms of efficiency, accuracy, cost savings, and strategic focus will become even more pronounced.
So, how is your organization leveraging AI to redefine its finance processes?
Embracing AI-powered invoice processing could be the next step in enhancing your finance function’s efficiency and effectiveness.
