There has been a lot of talk about the possibilities of artificial intelligence in recent years. Various applications have been introduced to the market with prediction that AI could be a solution to replace manual routine work. The huge development of computing capacity in recent years and the increased amount of data have made it possible to make more and more rational use of artificial intelligence.
For this reason, artificial intelligence has become more widely utilized in corporate services, and now it is possible to utilize it in financial management as well. The tasks of the financial management involve a lot of repetitive routine tasks and machine can easily reduce the amount of this type of work. At the moment there are many specific applications for artificial intelligence in financial administration and their number will increase in the future.
Purchase invoice processing is one of the most time consuming processes in financial management due to its manual workload. In addition to time spent in financial management, processing purchase invoices also takes a lot of time from invoice reviewers and approvers working in the business units.
The biggest time-consuming tasks are the manual routing of purchase invoices to the invoice reviewer and approver, as well as the manual posting of purchase invoices for different dimensions. The more purchase invoices a company has, the more there are reviewers and approvers of purchase invoices. Without automation, manually routing a single purchase invoice takes up to a minute to two minutes.
Often, purchase invoices are circulated in the account payable to people working in the business. When an invoice arrives for processing by a person working in the business, he or she manually adds the dimensions used to allocate the invoice, such as accounting account, cost center, project and VAT code, and other allocations depending on company policies. This step takes several minutes per invoice.
At this point, it is important to note that in business units, invoice reviewers and approvers are usually professionals working as managers or directors, who are also the highest paid employees in the company. As a result, the time spent in business units processing manual purchase invoices is a expensive expense for companies. This expense is often not recognized. Most companies are used to processing purchase invoices and have accepted it as a very manual process.
Let's take an example. Oy Ab receives 100,000 purchase invoices every year. Their purchase invoices are pre-processed in the account payable, from where they are routed to the business units for an invoice reviewer. In the business unit, invoices are reviewed, posted and approved, after which they are returned to the account payable for payment and entry in the accounts.
The level of automation at Oy Ab is 0%, meaning that all invoices are processed manually.
Manually routing purchase invoices takes an average of 2 minutes per invoice. Changed to the monthly working time, this means that the company Oy Ab spends about 275 hours in the account payable to route purchase invoices.
When an invoice ends up from a account payable to a business unit, an average of 5 minutes is spent reviewing and posting a single invoice. In posting, the correct dimensions are set for the invoice, such as account, cost center, VAT code, project, and so on.
It is calculated that the salary of a director / manager with side costs is about 15,000 € / month (with all side costs about 2x salary costs). Five minutes will then cost € 7.8. If the manager processes 30 purchase invoices per week, he spends about 2.5 hours / week processing the purchase invoices. In a month, this means about 10 hours. As a percentage of the total working time, the manager ends up spending up to 6.25% of his time in posting for purchase invoices.
The monthly cost to the company in this example alone is approximately € 925 per month per accounting manager. With dozens or even hundreds of managers accounting for invoices in companies, the cost of manual work is unreasonable.
In addition to this, the time spent processing purchase invoices is directly out of the work that creates value for the business. On a monthly basis, more customer negotiations could take place in the business in the time spent on processing purchase invoices. Nor have I ever heard that the business particularly likes the posting of purchase invoices.
In processing purchase invoices, artificial intelligence is a self-learning and constantly evolving probability calculation engine. Initially, it is trained for its task by giving it purchase invoice and billing history data for a period of 3 months to 12 months. Based on the historical data, the artificial intelligence builds rules for the posting and routing of purchase invoices in its own model. With the help of historical data, the artificial intelligence can predict the accounting dimensions and the circulation completely automatically.
Snowfox.AI's artificial intelligence connects to the purchase invoice processing system with ready-made interfaces. The system's own automation and artificial intelligence work together. The purchase invoice system identifies those invoices for which there is no automation rule and only those invoices will be processed by the artificial intelligence. Together, rule-based automation and artificial intelligence achieve a really high level of automation.
The Snowfox.AI service can route and post your purchase invoices automatically with artificial intelligence. You no longer have to worry about manual tasks.