If your accounts payable department is plagued with paper invoices or still manually processing digital ones, you are decades behind the technology. But you’re not alone. While digital transformation initiatives are increasing worldwide, the majority of accounts payable departments are still using slow, legacy processes.
In a recent November 2020 webinar poll hosted by Accounting Today and sponsored by Ephesoft, 200 accounting and finance professionals responded to a survey focused on digital transformation, AI, technology and automation. What they said may surprise you.
On Distributing or Processing Paper Documents
Only 15% of respondents said that their organization is fully paperless, which means the majority of businesses at 85% are not. Out of those who are not, there’s slightly over 50% are actively pursuing a paperless environment and have limited paper flows while the rest of companies at 33% are predominantly paper-heavy.
Businesses are shifting to automate their processes – especially for high-value, high-volume documents like invoices. However, the results indicate that digitally transforming invoice processing and other financial documents are trending to change, a third of companies have not moved away from manual data entry and paper processing. With an average cost to process an invoice at about $15, a lack of automation is going to keep company growth limited and put those laggard businesses at a competitive disadvantage.
Current Technologies
A majority of companies, at almost 79%, already have some type of document management system in place, followed by workflow tools at almost 60% and accounts payable automation at almost 30%. However, the respondents indicated that AI applications are underutilized, including robotic process automation (RPA) tools. The low implementation rate of AI is not surprising as there are many barriers to entry. In a recent Gartner survey, they revealed that security or privacy concerns along with integrating new AI into existing infrastructure were the biggest challenges. Other barriers included data quality, lack of understanding AI, data volume, risks, the complexity of data, skills, governance and others. While these are understandable and relatable, new low/no-code integrations and AI-based cloud technology is evolving at a rapid pace, which will diminish many concerns.
The AI Journey
When the question was posed, “What is your organization’s location on the AI journey?” the majority of responses were split between 42% saying they were in the planning stage to 40% saying they were not planning on implementing AI tools at all. The remaining participants reported that they had a project or pilot in flight or said they had AI tools already in place.
What is clear is that AI has not been widely adopted for processing invoices, but many organizations already have plans to invest in it. Another component to the AI journey is that there are a growing number of document management, workflow, AP automation and RPA applications that are already using AI, machine learning, deep learning and NLP (natural language processing) to help businesses boost efficiency and productivity. For instance, earlier this year Ephesoft launched its first low-code solution, Semantik Invoice, which helps accounting departments expedite invoice processing with the ability to deploy in minutes.
Accounts Payable Automation is Underutilized
Our survey showed that about two-thirds of enterprises are still processing invoices manually. The most common pain points of AP processes are manual data entry, inefficiency and manual approval routing, according to Levvel Research (April 2020). What many accounting professionals may not know is that invoice processing is one of the easiest tasks to implement automation successfully and quickly. And, with AI and machine learning automation technology available, these common challenges can be greatly reduced with intelligent document processing tools.
The lag in adopting newer technologies such as AI/ML, cloud and low-code/no-code architecture are likely to impact the bottom line and employee productivity. It’s time for companies to embrace innovation in accounting with point solutions that are up and running in hours, eliminate manual tasks and allow accounting professionals to focus on higher value-add functions.
The survey on digital transformation, AI, technology and automation was conducted on Nov. 5, 2020, by Accounting Today on behalf of Ephesoft. Responses are from 200 accounting and finance professionals from 26 countries, including CEOs, CFOs Partners, CIOs, CTOs, CPAs, accountants, controllers, auditors and consultants in a variety of industries, including banks, energy, government, healthcare, technology, accounting services, airlines, auto, education, large global consultancies and many others.
If you’re interested in exploring next steps or are ready to start a free trial, please contact us!
More resources:
