Introduction
In the evolving landscape of financial operations, the Accounts Payables department is increasingly relying on AI to streamline processes and enhance accuracy. As per the Accounts Payable Automation Market Size Report, 2030 – “The global accounts payable automation market size is expected to grow at a CAGR of 12.8% from 2024 to 2030. The market’s growth can be attributed to the increased efficiency provided by the accounts payable automation solutions, and the continued technological advancements integrating Artificial Intelligence (AI) and Machine Learning (ML).” These technologies not only reduce manual errors and processing time but also enable businesses to optimize cash flow and maintain compliance with financial regulations. Below is a detailed list of AI use cases in the Accounts Payables department, illustrating how these technologies are transforming traditional processes and contributing to more streamlined and effective operations.
Use Cases
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1. Vendor Master Data Setup and Maintenance
Vendor master data setup and maintenance involve managing the approval workflows necessary for creating, modifying, or deleting vendor records. Once approved, these changes are automatically updated in the system, ensuring that vendor information is accurate and up-to-date without manual intervention. This process helps maintain data integrity and streamline vendor management.
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2. Processing Vendor Documents
Vendor official documents, such as business licenses and identification documents, are received and classified. Using AI-based Intelligent Document Processing (IDP), these documents are processed into the vendor system. The information is then verified against external sources, like government databases or official websites, to ensure authenticity and compliance with regulatory requirements. This process helps in maintaining accurate and verified vendor records.
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3. Recreating Electronic Tables
Recreate electronic versions of tables, whether simple or complex (hierarchical), from original documents using ML algorithms. This involves accurately replicating the structure and data of the original tables in a digital format, ensuring that all details are preserved for further processing or analysis. This process is crucial for digitizing paper records or converting legacy data into modern systems.
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4. Processing Vendor Invoices
Process vendor invoices or receipts by converting scanned or PDF machine-readable versions into the accounting system. Each invoice is reconciled individually using AI to verify the accuracy of sales tax or value-added tax formulas. Any discrepancies or exceptions are identified and the documents are routed into a specific workflow for further processing and approval. This ensures that all financial transactions are accurately recorded and validated.
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5. Supporting Workflow Processes and Approvals
Support the workflow processes and approvals for contracts, purchase orders (POs), and invoices. This involves performing AI-based matching to verify vendor names, prices, quantities, and products across POs, receipts, and invoices. This ensures consistency and accuracy in procurement and financial processes, reducing the risk of errors or discrepancies.
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6. Reconciling POs and Invoices
Reconcile purchase orders (POs) and invoices with spending from other departments to ensure accuracy. Prepare payment lists and process both individual and bulk payments through the accounting system. Additionally, reconcile the sales tax listed on the invoice with the sales tax on the PO and determine any remaining balance in the PO for future disbursements. This helps in maintaining accurate financial records and managing departmental budgets effectively.
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7. Client Master Data Management
Set up and maintain client master data, handling the approval workflows required for creating and modifying client records. Once approved, these changes are automatically implemented in the systems, ensuring that client information is consistently accurate and up-to-date. This streamlines client management processes and reduces the risk of data entry errors.
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8. Processing Client Orders
Receive client orders from the sales department, verify their details for accuracy, and process them into the accounting system. After processing, reconcile the orders to ensure all transactions are correctly recorded and matched with the corresponding financial entries. This ensures that client orders are accurately tracked and managed from receipt to fulfillment.
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9. Generating Payment Aging Reports
Generate payment aging reports by extracting relevant data from accounting systems. Use AI algorithms and fuzzy logic techniques, such as rounding, to reconcile this data. These reports help identify overdue payments, manage accounts receivable, and improve cash flow management by providing insights into outstanding balances and payment histories.
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10. Determining Early Payment Discounts
Use AI to analyze contracts and determine if the Accounts Payables department can take advantage of early payment discounts or if it will incur penalties for late payments. This helps the organization optimize payment strategies, reduce costs, and avoid financial penalties by adhering to contractual terms.
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11. Determining Discount Clauses for Cheaper Procurements
Automatically identify contract clauses that allow the Accounts Payables department to take a discount if the same product or service is procured at a lower price than what is stated in the invoice or purchase order. This ensures that the organization can leverage cost savings when market prices drop, thus optimizing procurement costs.
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12. Determining Volume Commitment Discounts
Automatically determine if contracts include clauses that provide discounts for buying in bulk, known as “volume commitment.” This allows the Accounts Payables department to benefit from cost savings when purchasing larger quantities, encouraging bulk procurement and optimizing expenditure.
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13. Determining Invoice Submission Timeframes
Automatically determine if contracts specify a time limit, such as 6, 9, or 12 months, after which vendors cannot submit invoices for products or services. This ensures timely invoicing and helps organizations manage their financial commitments by avoiding unexpected or late billing.
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14. Determining Overage Consumption Charges
Automatically identify contract clauses that specify no charges for overage consumption in a specific month if there was underage consumption in a previous month. Some contracts may require vendors to provide credits if the organization did not consume the stipulated amount. This ensures fair billing practices and helps manage consumption patterns over time.
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15. Determining Price Re-Evaluation Clauses
Automatically determine if the contract requires a reevaluation of all prices every year, or at specified intervals, for re-baselining or market correction. If a reevaluation has been conducted, ensure the invoice reflects the new price structure agreed upon by both parties. This process helps keep pricing fair and aligned with market conditions, ensuring that both the vendor and the organization are operating under current and mutually accepted terms.