How Hyperautomation Can Revolutionize the Accounts Payable Process for Businesses

hyperautomation in ap process

The combined use of various, cutting-edge automation technologies like Robotic Process Automation (RPA), Artificial Intelligence (AI), and Machine Learning (ML) is known as Hyperautomation – preferably termed as “automation at speed.”

While hyperautomation streamlines repetitive tasks across an organization, its impact on the Accounts Payable (AP) process is particularly transformative – one that I’ll be emphasizing in this blog.

Understanding Accounts Payable and Challenges

As crucial as Accounts Payable (AP) is to the smooth operation of any business, manual processes can become a significant bottleneck. AP is not merely a back-office function; however, it serves as the financial backbone, managing vendor relationships, cash flow, and more. To put this in simpler terms, it ensures timely payments to vendors for the supplies and services that fuel business operations.

Despite its importance and despite using ERP software solutions, traditional AP processes are riddled with challenges that hinder efficiency and productivity, overturning your growth trajectory. The main challenge that declines an organization’s performance is the manual execution of AP processes. And the sheer volume of invoices and payments handled by large organizations, not to mention “manually”, only adds complexity to AP operations. To the rescue, automaton and hyperautomation emerge as key solutions – to counter manual efforts, making AP processes efficiently faster and error-free than ever before.

Manual Accounts Payable

It’s no surprise that manual processes are irking and time-consuming – be it in the division of AP or any or any other organizational function, leaving little time for strategic thinking. Thousands – if not millions – still use manual accounts payable processes while 64% – especially SMBs – use spreadsheets in some capacity of their finance dealings. Despite claiming a significant level of employee involvement, manual accounts payable are still susceptible to errors – a considerable number of firms (mainly SMBs) stills uses manual AP. Herein, let’s consider an example showing the challenges of manual accounts payable in its standard workflow.

1. Invoice Processing

One spends hours carefully keying in invoice information – a monotonous task prone to errors. The “hand-operated” approach is a major bottleneck, leading to delays, frustration, and often discrepancies (Note: Human error is inevitable).

2. Approval Workflow

Once invoices are (hopefully) entered correctly, they bounce off from desk to desk for manual approvals. This cumbersome process can leave invoices languishing for days, even weeks at times, hindering vendor relationships and potentially incurring late payment penalties.

3. Payment Processing

Finally, after securing the necessary signatures, another round of manual data entry is required to initiate payments. This leaves room for human error and creates a lag between invoice approval and actual payment.

Automated Accounts Payable

Far from the challenges of manual accounts payable, automated AP processes represent a noteworthy leap forward in efficiency and accuracy – not to mention negligible human interaction. Then again, 80% of firms still use paper checks to pay vendors. Automated Accounts Payable, however, harnesses technology to streamline and optimize invoice processing, approval workflows, and payment processing. It comes to the fore by reducing reliance on manual intervention and minimizing errors.

Now let’s consider the same workflow as above whereas now automation intervenes.

1. Invoice Processing

Software systems can now automatically extract data from invoices with pinpoint accuracy, eliminating manual entry and saving countless hours (one can only image when it is so). That’s because now invoices are being scanned, analyzed, and categorized in a flash, ready for the next step in the AP process.

2. Approval Workflow

Automation streamlines the approval process by setting up robotic/automatic routing based on pre-defined rules. Then, invoices are electronically transferred to the right approvers for swift review and sign-off. Unlike in the manual AP process, this eliminates the paper chase and ensures timely approvals.

3. Payment Processing

Once approved, automation tools takes over once again, initiating automatic payments to vendors via secure electronic channels. Not only does it reduce the risk of errors, but also ensures faster payments. Now, we all recognize the importance of keeping vendors satisfied and nurturing stronger relationships. Here, it becomes true.

Revolutionizing AP with Hyperautomation

Hyperautomation takes things a step further by transforming your AP department into a strategic powerhouse. A typical invoice cycle, from receipt to approval and registry, can take anywhere from 7 to 13 days. Reducing cost by $4 and improving turnaround time by 80%, Hyperautomation, with the aid of advanced automation tools like Optical Character Recognition (OCR), Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), and others, can revolutionize this process – even the automated AP process. While

With Hyperautomation, businesses can attain:

Autonomous

Nothing like automation that only fast-tracks repetitive tasks – only those of pre-defined tasks, hyperautomation functions autonomously – processes data entry, invoice processing, reporting, payment processing, and reconciliation. Astonishingly, it even identifies processes itself that could be potentially automated.

Improved AP Process

Hyperautomation extracts data from various sources (emails, pdfs, any physical documents) to populate an AP system, taking invoice processing to the next level. From invoice approval and execution to vendor onboarding and management, it automates your entire AP workflow.

Real-time Insights

It grants complete visibility into AP operations. Hyperautomation provides real-time data and analytics, allowing your teams to track spending patterns, identify payment trends, and make informed decisions about cash flow management.

Fraud Prevention

Admittedly, manual processes are vulnerable to human error and even fraud. Hyperautomation, on the other hand, minimizes human intervention while significantly reducing the risk of fraudulent activity within the AP process.  

Improved Compliance

Automated workflows ensure strict adherence to internal regulations and external compliance requirements. This focus on compliance fulfills a core need for business owners, providing peace of mind by guaranteeing smooth and compliant operations within your AP department.

Automation vs. Hyperautomation

While both automation and hyperautomation aim to streamline accounts payable (AP) processes, they differ in their level of sophistication and the technologies employed. Automation is a good starting point for organizations with straightforward AP processes and limited complexity.

But, on the other hand, hyperautomation offers significant benefits for organizations with high-volume transactions, complex workflows, or a need for advanced analytics. The difference between them is the scope and depth of technology integration – one that follows pre-defined rules (automation), and the one that identifies and automates them without human interventions.

Automation

·        Traditional automation replaces manual tasks like data entry, invoice validation, and approval workflows with software solutions.

·        Automated solutions rely on pre-defined rules and require structured data to function effectively.

·        Automation provides efficiency gains but may struggle with complex scenarios or exceptions.

Hyperautomation

·        Hyperautomation takes automation to the next level by integrating a wider range of technologies.

·        AI, Machine Learning (ML), and Robotic Process Automation (RPA) enable hyperautomation to capture and verify data, automating payment  approval and execution, and further handles complex tasks – arrange and resolve unstructured data and exceptions with greater flexibility.

·        Hyperautomation, unlike automation, can analyze data, learn from patterns, and automate even non-standardized tasks, improving efficiency and accuracy.

While hyperautomation in AP processes is still in its early stages, significant advancements are being made that will eventually impact organizations across the board. Many organizations today are still utilizing partial automation, while a select few have begun implementing hyperautomation.

Embrace the Future (Hyperautomate)

The way I see it, Hyperautomation is the future – a revolution waiting to happen in your AP department. Harnessing this (at-speed-automation) can turn your manual account payable functions into a digital workflow. These cutting-edge, advanced technologies can transform your paper-pushing purgatory into a strategic asset that drives efficiency, reduces costs, and gives you a competitive edge while simplifying and streamlining the AP process. When all is said and done, it’s time we automate manual and repetitive processes to focus on strategic initiatives.

Although AP automation requires only due maintenance on your side, the benefits simply far outweigh the initial investment. That is – more reason for you to adopt.

Don’t let manual processes hold you back. Take control, embrace hyperautomation, and unlock the full potential of AP automation

Husnain Kazmi

Husnain Kazmi

Husnain is the Chief Operating Officer at SMB Services, and he has an impressive career in Financial Accounting and Reporting that spans over 20 years. He has gained valuable experience working with well-known accounting firms like EY. With his strong technical skills and professional expertise, Husnain's advice is essential for small and medium-sized businesses looking to succeed in their operations.

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