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How Automation Can Transform the Accounts Payable Department

Outsourcing data entry associated with Accounts Payable (AP) to reliable providers of data entry services has remained a leading trend for many years now. With outsourcing, organizations benefit from access to the newest technology, reduced manual labor, best practices, flexibility, standardization, round-the-clock operations, and multi-language support among others. Now however, there is something new in this landscape, namely, software automation, robotic process automation (RPA) and machine learning. Many organizations are adopting automation with a view to reduce errors and the need for human intervention while also amassing precious financial data and reducing risk through global compliance. Automation could lessen repetitive tasks and the workforce could be deployed to focus on more core functions.

 
Automation in the Accounts Payable Department

Currently, the job description of accounts payable clerk is changing and it may disappear in the course of a few years. This is because the financial sector is embracing the capabilities offered by advanced software, development in robotics, artificial intelligence (AI) and machine learning. In this new age of automation, machines may very well outperform humans in various tasks. Here is a list of some of the AP functions that can be transformed by automation.

  • Front-end mailroom that includes scanning and invoice data capture
  • Receiving invoice and purchase order and entry to ERP
  • Invoice and purchase order workflow – approval, discrepancy and resolution handling
  • Invoice automation
  • Reconciliation of invoice data against payments and further to GL and ERP
  • Payment approval
  • Supplier master data maintenance
  • Automated reporting for analytics and decision making purposes

According to a report by McKinsey Global Institute in January 2017, almost half of the activities that people are paid to do can be automated. Activities that are repetitive and do not require much creativity such as data collection, data processing etc are most likely to be automated. This may put jobs in customer service, sales, invoicing, account management, accounts payable and so on at risk.

So is the future bleak for accounts payable staff? McKinsey says that humans will need to continue working side by side with machines to produce the growth in per capita GDP to which countries around the world aspire. These professionals will approve data analysis and guide the software in the right direction. They may have to supervise or do tasks that may newly arise. Accounts payable professionals may require some new skills-based instruction. Automation presents them with an opportunity to enhance their job descriptions and have more meaningful and interesting jobs. They can thus support the organization, providing excellent internal service and staying more motivated.

To consider an example from history, in the early 1900s, technical and mathematical calculations were made manually, rather than by machine. A large workforce was required for the same and organizations such as NASA recruited women for this job, and called them “computers.” When computer machines began to enter the scene, many manual tasks were automated. However, the women employed for the job of computing were retrained to work alongside the machines and perform less menial (and more meaningful) tasks. In the same way, AP clerks and other accounting staff will find that they will become valuable as human strategists and analysts. They will play a vital role in validating a machine’s processes.

Automation can transform the AP department. It delivers a detailed report that clearly highlights each and every step of the AP process and the flagged problems. You can clearly see the most common issues, and the causes of the same. This information will help the management address the issues and drive constructive change.

Organizations that wish to transform are utilizing the right outsourced solutions for automation. The best partnering company would be one that is committed to innovation and constantly on the lookout for the latest technology that can help them deliver the latest and most efficient solutions to their clients.

About Rajeev R

Rajeev R

Manages the day-to-day operations of MOS from NY. With an interest in information technology, Rajeev has guided MOS to extensive use of digital technology and the internet that benefits MOS as well as MOS clients.