If you didn’t have a stack of invoices that need keyed into your accounting system and coded to expense accounts would you be sad? Hopefully not unless you’re one of those people that really likes typing. If you aren’t one of those people and want to avoid getting carpal tunnel, then you may be interested in accounting automation using artificial intelligence (AI) tools and how it can streamline your processes, free up time, and increase accuracy.
Odds are you have an accounts payable department that receives invoices (probably via mail or email) and then enters those invoices into your accounting system. You may then store those invoices in filing cabinets or boxes. You also might run paper checks and then someone spends a significant amount of time signing them. If you’re scanning invoices already to cut down on storage costs, then you’re an even more likely candidate for accounts payable automation. Basically, you scan the invoices (or they can be sent to a PO Box and they get scanned for you), and the images are uploaded to some type of cloud storage. The software using OCR technology to “read” the invoices to determine the vendor, amount, etc. Then the software doing the scanning interfaces with your current general ledger software and automatically records the invoices in it, and if it’s a recurring invoice it will code the items to the appropriate expense accounts. It will also route an electronic copy of the invoice to be approved electronically instead of a paper copy moving around the office for sign offs. Some services will even allow you to choose items to pay from an interface, move those the next step to be approved by someone else, and then process the payments (such as issuing checks with an electronic signature or initializing ACH transactions).
Other automation options include applying cash receipts to accounts receivable in your system. Some of the same software mentioned above is also able to interface with your bank account to obtain a lockbox report and using that information apply those payments to your invoices. Or, if you’re scanning checks for deposit, use those images to apply payments.
Human resource, legal, and a variety of other standard document processes also have software that will help streamline the process of onboarding employees, pulling key terms out of legal agreements and summarizing them, etc. There is a lot of opportunity to reduce the amount of time spent on these manual tasks.
This software exists and is in use at companies throughout the country already. Some statistics from various studies about accounting automation:
1. On average, five to ten full time employees are used solely for invoice data entry and matching
2. 56% of all companies process more than 10,000 invoices per month. 16% process over 40,000.
3. 27% of companies have no idea how much money they spend processing invoices.
4. $25 is the average amount companies spend on processing a single invoice.
5. A minute of work for a robot/AI is equal to about 15 minutes of work for a human.
So if you’re having trouble finding people to assist with these tasks, or if you want to free up your personnel to work on more valuable tasks, accounting automation using artificial intelligence tools could be something you may want to take a further look into it. Many best in class companies are already using these tools to reduce their costs and free up precious time for other work. And, with significant advances in software and cloud-based technologies lowering costs, it has become very affordable reducing the ROI on these types of projects. If you’re interested in learning more about some of these solutions, let us know and we can go into further detail on how they work, their benefits, and assist with scheduling some demonstrations.