Creating An ‘Intelligent Mailroom’ For AP Departments

Smaller firms are generally thought of as having a disadvantage when it comes to embracing accounts payable (AP) automation.

With few resources and little financial wiggle room, historically, small- to medium-sized businesses (SMBs) have been left out of the conversation of B2B FinTech innovation, unable to afford the more complex digital tools designed for bigger enterprises.

But as FinTech digs its heels deeper into the SMB customer base, larger corporates continue to face their own hurdles in digitizing, automating and modernizing the financial back office — and AP is no exception.

Large, multinational businesses often funnel in hundreds or even thousands of supplier invoices every month. Depending on the bill, these corporates not only have to ingest the information on that document, but understand whether it’s accurate, falls within company policy and spend guidelines, and passes any fraud checks.

Invoice automation has helped large firms take steps toward accelerating this process, but according to André Denis, chief technology officer and founder of INTEGRIM, general automation technology cannot adequately account for all of the invoice exceptions that can cause a backlog in AP departments — whether it’s due to an invoice failing to match with a purchase order, an erroneous charge, or a bill that exceeds category spending limits.

Speaking with PYMNTS, Denis described how technology has the potential to not only automate AP, but make the function more intelligent, with potentially lucrative results.

The Intelligent Mailroom

Standard invoice process automation can be beneficial for accelerating the pace at which AP departments ingest bills for products and suppliers they use frequently. An invoice received for an item that has cost the same, and comes from the same vendor, as it always has won’t raise any red flags.

But the more invoices a company receives, the greater the likelihood that a significant handful of those documents will lead to some issue that hits the breaks on the automation machine.

Denis said corporates should pursue what he described as an “intelligent mailroom.” A far cry from the physical mailrooms of yesteryear, the intelligent mailroom is a concept born from the rapidly digitizing invoice.

“We’re reading information from files received in different ways, different forms and different sources,” he said. “And we try to push this information as far out as we can.”

A lack of standardization in the ways that electronic invoices are presented — these documents often arrive as PDF attachments from various supplier portals or in an array of formats — means automation technology needs to be flexible enough to collect the data regardless of how it is held within that document. Going a step further, said Denis, it’s crucial that that information can be seamlessly integrated into whatever back-office platforms an AP and finance department uses.

The Value Of Historical Data

Beyond aggregating data across document formats, and then aggregating it into various portals, Denis also noted the importance of automation technology being able to intelligently understand that data in the context of previous events.

For instance, if the AP department receives an invoice from a familiar vendor for a familiar product, yet the price of that order is higher than it usually is, technology must be able to identify that discrepancy.

Further, taking past information into account can greatly accelerate automation by acknowledging where information needs to go.

“It all boils down to the ability to actually know what to do from existing information that is readily available,” explained Denis, “and to relay all the right rules to create shortcuts and minimize human intervention on the AP team, so they don’t need to actually receive an email, look over a PDF, and send it out to a second-level approval.”

Being able to ingest information and compare it to past documents to see if unit costs have changed, or if conditions and buying guidelines have been adhered to, can inject significantly more automation from the very beginning of the AP process. Ultimately, it saves AP teams significant time so that, when it comes time to actually pay a vendor, businesses will have the opportunity to capture early payment discounts.

According to Denis, the ability of technology to place data into context based on historical information is imperative to achieving the kind of time and cost savings organizations need today. When efficiency is achieved at the very beginning of the AP cycle — right at the moment of invoice receipt — corporates are given the opportunity to benefit further down the line.

“Looking back can tell us how to look forward,” he said.