What is the Role of AI in P2P Automation?

As financial leaders are continuously pressured to drive time and cost savings, P2P automation is no longer an option – it has become a necessity. Investing in P2P automation saves time and money, streamlines departmental collaboration without communication mishaps, and ensures a smooth purchase-order-to-invoicing process. Integrating AI (artificial intelligence) into your P2P and vendor management system process can take all this to the next better level. 

Here's how AI-powered P2P solutions impact P2P automation:

Almost half of the finance team’s time goes into transactional tasks. In fact, less than 10% of these activities involve analysis and action, which are critical for informed decision-making. However, financial leaders need spare time to analyze real-time insights to drive greater value to their organizations. 

In addition, the growing complexity of businesses and the full P2P processes demand intelligent P2P automation. Moreover, businesses need a more agile workforce with advanced digital skills to perform higher-value activities and contribute towards the growth of the organization. 

All of this means your business needs AI-enabled digital P2P automation using a highly secure and feature-rich cloud platform.

What AI-powered Procurement Automation Tools can do for your Business

Improved and Faster Invoice Handling

The AP (accounts payable) team receives an invoice, and all the particulars mentioned on this should match the invoice on the corresponding purchase order. However, any discrepancies can be costly and time-consuming, as resolving them often requires manual intervention.

Unfortunately, invoice exceptions are pretty common in manual or paper-based AP processes. These often lead to huge delays in invoice processing, thus affecting the company's reputation and relationships with vendors.

AI-enabled P2P vendor management systems allow businesses to eliminate invoice exceptions altogether. They also streamline time-consuming steps of invoice processing, such as invoice data capture, invoice validation, and uploading invoice particulars to an ERP (enterprise resource planning) system. So, your staff is free to focus on real exceptions and more valuable activities, such as data analysis, budgeting, forecasting, and planning.

Contribute To Optimizing Cash Flow

Top procurement software can identify cost-saving areas based on historical spending patterns. These insights allow businesses to negotiate better terms with vendors or suppliers, improving cash flow. By analyzing massive volumes of data in real time, businesses can recognize bottlenecks, streamline processes, and decrease the time between procurement and payment, adding to better cash flow.

In addition, fast invoicing processes enabled by procurement automation tools, as explained above, give supply chain managers the peace of mind of knowing that vendors will be paid timely and automatically. So, you don’t have to worry about paying vendors on time, which is important to maintain healthy relationships with them.

Moreover, these solutions optimize payment schedules based on payment terms, cash flow projections, and discounts. So, you can prioritize payments according to available funds and negotiate favorable terms to increase cash flow.

Improved Compliance

AI-powered P2P solutions are trained to automatically run compliance checks on purchase orders, invoices, and other relevant documents. This includes:

• Verifying tax codes
• Validating supplier detail
• Ensuring compliance with industry-specific regulatory requirements
• Monitoring policy violations

Some of the top procurement software, like Partner Portal, can enforce internal procedures and policies within the P2P process. Such systems automatically ensure that all your procurement activities adhere to approved suppliers, vendors, and contract terms. All of this minimizes the risk of non-compliance while increasing transparency and control over procurement processes.

AI can continuously monitor and analyze regulatory changes, such as tax regulations or industry-specific compliance requirements. By keeping track of evolving compliance standards, AI-powered systems can automatically update rules and checks to ensure ongoing compliance within the P2P process.

Fraud Detection and Prevention

AI-powered P2P solutions use various techniques to detect and prevent fraud within the procure-to-pay processes. For example, AI algorithms can detect anomalies based on normal behavior patterns. They compare new transactions to normal patterns and flag any deviations – such as unusual invoice amounts or unexpected modifications in vendor information - that may be a sign of fraudulent activity.

Similarly, AI can identify supplier risks based on factors such as their reputation, past performance, and financial stability. This information allows businesses to make informed decisions when partnering with suppliers.

In addition, AI leverage NLP techniques to extract relevant information from invoice text. By decoding the semantic meaning of this text, the P2P solution can identify errors, inconsistencies, and manipulated text. This allows businesses to take immediate action to investigate and prevent potential fraud, avoiding financial losses.

FAQs

Q1. How can AI ensure data accuracy in P2P automation?

AI and algorithms automatically extract and validate data from purchase orders, invoices, and other documents. This helps minimize manual data entry work, thus reducing errors. These technologies also identify discrepancies, validate data against predefined rules, and flag potential issues for manual review. 

Partner Portal also works in the same way, thus ensuring improved data accuracy, reduced disputes, and improved compliance with regulatory requirements.

Q2. How does AI help with predictive analytics in P2P automation? 

Advanced AI-powered P2P automation and vendor management systems, like Partner Portal, facilitate predictive analytics by identifying trends and analyzing historical data. These insights can be used for demand forecasting, inventory optimization, cash flow management, and supplier performance. In addition, businesses can use this data to make data-driven decisions, identify potential risks, and optimize their procurement processes.

Q3. Can AI improve spend visibility in P2P automation? 

Yes. AI-enabled procurement automation tools provide comprehensive spending visibility by analyzing procurement data from different sources. They can also help categorize spending, identify cost drivers, and highlight areas for cost reduction. With enhanced spending visibility, businesses can negotiate better contracts, identify opportunities to cut down costs and enforce compliance with spending policies. Partner Portal is an AI-powered cloud-based P2P platform that provides complete spend visibility into your P2P automation. This further helps save time and costs on procurement processes.