Almost all medium and large organizations have been struggling with a manual purchase invoice process for years. I have met with hundreds of large organizations over the past couple of years and have become familiar with their purchase invoicing processes. The more I have seen different organizations, the more convinced I have become that the purchase invoice process cannot be automated using traditional methods.
In most companies, the level of automation of non-PO purchase invoices has remained unfathomably low. In general, at least 80% of purchase invoices are posted manually by a person and only about 20% are posted automatically. In addition, on average, at least 70% of invoices are sent manually for circulation to reviewers and approvers.
Manual posting and routing of one purchase invoice take several minutes and causes much unnecessary administrative work and frustration. The high manual workload can be seen in the fact that the quality of accounting for purchase invoices is often poor and the invoices are in circulation within the organization for a long time. Especially the turn of the month is usually a time when the manual work of purchase invoices causes annoyance.
Does such a large amount of manual work make any sense in 2022?
In my opinion: no, it makes no sense whatsoever.
The reason for low automation is not companies' laziness or inability to build automation rules. The reason is rule-based automation itself. Rule-based automation does not lend itself to high levels of automation, no matter what kind of guru is building the rules.
The representatives of the companies I meet often feel inferior and think that everyone else's purchase invoice process is more automatic and smoother than theirs. Let me assure you, that this is by no means the case, regardless of which purchase invoice system is in use.
If you think about your situation regarding the automation of the purchase invoice process, you will most likely recognize most of the things on the list below. At least I hear these every day when I talk to different organizations.
Artificial intelligence changes the entire playing field of purchase invoice automation because AI builds the automation rules automatically, and there is no need to manually build and maintain a traditional jungle of rules. AI learns from historical purchase invoices by reading how the invoices have been posted and how they have been reviewed and circulated in the organization. This is how AI automatically learns the accounting rules directly from the existing data, without a person having to define complex rules. In addition, AI is capable of creating much more complex rules than a human being could ever do.
AI has been able to raise the automation level of purchase invoices from 20% to over 90%. The degree of automation increases as soon as AI is put into use, and its ability increases the most during the first 6 months of use.
In addition, AI uses all the available data on purchase invoices (both written and image) to create automation rules. Thus, the automation rule is not based on any single reference number, but on all the information on the invoice. This makes the operation of automation significantly easier, as it reduces the need to communicate with suppliers.
If you want traditional rule-based automation to work, you have to get both your organization and suppliers involved in the process, so that invoices always have the exact right reference information to trigger the automation rule. However, often the challenge is that the invoice data is incomplete and no matter what kind of rules are built, they will not work without the missing data.
If you still feel bad about the fact that your organization has not reached a 90% level of purchase invoice automation, I recommend that you should finally relax about this issue.
Discover what kind of opportunities AI brings to purchase invoice automation and take the first steps toward a new era for your organization. Remember that you don't need to buy purchase invoice AI without first testing its capabilities with your purchase invoice material. Snowfox.AI can give you a free AI ability test which will give you precise information on how well AI would process your purchase invoices automatically. In addition, we will give you a calculation of how much the use of AI would cost you.
The Snowfox.AI service can route and post your purchase invoices automatically with artificial intelligence. You no longer have to worry about manual tasks.