The use of artificial intelligence in automating the purchase-to-pay process has skyrocketed in recent years. Many organizations have implemented AI in their financial management and are enjoying the automation it brings. However, some have made poor choices regarding AI, missing out on its benefits. These experiences could have been very negative and may have increased the reluctance to use AI in the future. We've listed five tips to consider when contemplating the acquisition of purchase invoice AI to help you avoid the worst pitfalls.
AI is a rather new technology in the field of purchase invoice automation. Take the time to thoroughly familiarize yourself with AI technology. Ensure that your staff is well-versed in AI and its logic. This is crucial because the better the understanding of AI technology, the safer it feels. It's also essential to understand what different AI services actually do. For example, there are various AI services related to automating the purchase invoice process, each with different roles.
AI as a technology also operates and behaves very differently from traditional rule-based automation. There are various solutions in the market currently, some claiming to be AI solutions without genuine AI, while others are highly advanced solutions. The better you understand AI, the easier it is to compare between different service providers.
For example, testing the capabilities of AI in handling purchase invoices with your own invoice data is straightforward if it's a genuine AI solution. If you're comparing AI solutions for purchase invoices, I recommend testing the AI's capabilities with these solutions to determine which one works best and most accurately for you. AI is acquired to improve purchase invoice automation, so its accuracy is crucial. There are various AI solutions in the market with significant differences in their capabilities.
I've heard several examples where a company adopted an AI service offered by their purchase invoice system provider without a capability test and was disappointed with the results after it went into production. The vendor claimed that the service worked well, and this was trusted. However, after implementing the service, it was discovered that the AI's suggested accounting entries contained many errors and it didn't learn from mistakes.
Therefore, test the capabilities and ideally compare between services to see which solution works best.
I recommend paying only for the additional automation brought by AI. This way, both you and the provider of purchase invoice AI are on the same side, with a genuine desire to achieve the highest possible purchase invoice automation. There are also solutions in the market where you have to pay for each invoice, whether AI can automate it or not.
The capabilities of AI must be monitored through analytics. This is crucial when monitoring its performance and the accuracy of predictions. It's important to understand how well AI can, for example, automatically allocate purchase invoices for GL accounts, Cost Centers, Tax codes etc. If you don't have data on how well AI has been able to automate invoices, what is the basis for monitoring its performance? Through analytics, it's easy to monitor the accuracy of AI predictions and their improvement over time. It's not enough of a metric that there haven't been complaints from invoice reviewers.
Also, monitor the efficiency benefits brought by AI. Good metrics could include the speed of processing purchase invoices (how long it takes to process a single purchase invoice), the turnover rate of purchase invoices (how quickly an invoice moves to accounting after arrival), efficiency improvements in accounts payable and in business, and the improvement in the quality of accounting entries.
The efficiency benefits brought by AI are only realized when there is trust in AI. If every invoice processed by AI is rechecked by a human, the efficiency improvement brought by AI is reduced. If you dare to trust AI and with a high level of trust, allow AI-automated invoices to go touchless into accounting, the efficiency benefit is enormous.
Did you know that AI indicates its confidence level for each invoice it automates? With the confidence level, you can determine which invoices should be reviewed by humans and which invoices can be trusted as correctly processed by AI.
AI is ultimately a tool designed to help us automate routine tasks. It has brought tremendous opportunities in recent years that were previously impossible. They may often sound too good to be true, leading to distrust in AI. I encourage you to explore the possibilities of AI with an open mind and even discuss with colleagues who have already adopted AI.