What is Autonomous Accounts Payable (AP)?

search document iconThe meaning of autonomous

Before exploring autonomous accounts payable, let’s first define what autonomous means. According to Merriam-Webster, autonomous means undertaken or carried on without outside control. In simple terms, being self-sufficient.

Automated accounts payable versus autonomous accounts payable

AP automation has been a well-known term in the world of AP for quite some time, so it's a generally understood industry term. However, the phrase autonomous accounts payable is not as widely recognized or understood, often mistaken for having the same meaning as automation. But there are clear distinctions.

The AP Process

Accounts payable is a key part of the overall procure-to-pay process that involves managing purchase orders, invoices and supplier payments. It’s crucial for timely compensation for goods and services and can greatly affect vendor relationships. The AP process has evolved over the past decade and includes a myriad of tasks and steps to complete, from verifying purchase orders to finalizing payments. For many years, the finance and accounts payable team completed these tasks manually, using paper invoices and payments until automation tools entered the picture and began to revolutionize the AP process and teams.

Explore the full cycle of accounts payable from purchase orders to vendor payments.

AP Automation

Automation can mean different things depending on who you are talking to and your industry. In the modern AP world, it's all about moving away from manual workflows and paper-based invoice and payment processes. Instead of dealing with paper invoices and checks, automation lets you process and approve payments electronically from anywhere you are.

Accounts payable teams automate by using AP automation software tools and various technologies that use set rules to automate certain tasks within the accounts payable process – like receipt scanning and invoice capture and reconciliation. Automating tedious tasks speeds up the overall process and reduces manual work and human-prone errors – all of which have contributed to more efficient AP processes and made AP teams more productive with their time and resources. Examples of how automation improves the process include:

  • Input/capture of invoices
  • Matching of invoices to orders and receipts
  • Classification/coding of invoices
  • Verification and approval of invoices
  • Payment of invoices

Autonomous AP

AP automation is extremely helpful in the world of finance, but it’s limited to set rules and actions and requires manual configuration and intervention for corrections.

Autonomous accounts payable goes beyond automating tasks. It eliminates the need for manual intervention for a self-sufficient end-to-end AP process by:

  • Combining digitization and artificial intelligence for a seamless, autonomous process.
  • Leveraging AI for accounts payable including applications of AI like machine learning (ML), and optical character recognition (OCR).

The struggle to deliver an end-to-end digital AP process is limiting the returns on existing investments. While AP teams may have bought into the value of digitized paper documents and receipts, they are yet to utilize digitization and AI in tandem for a seamless process.

What’s needed is an E2E “autonomous” platform to manage the process from procure-to-pay, which is the method of integrating purchasing and accounts payable systems, to create greater efficiencies.

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What makes them different from each other?

Autonomous AP and AP automation are different when it comes to autonomy level, predictive capabilities and continuous learning. Unlike traditional automation, autonomous AP has impressive learning and adaptive abilities. This technology brings forth errors, identify fraudulent trends and even rare anomalies in front of AP teams that they might have overlooked. It goes beyond other automation systems by compiling data and managing invoice processing without human oversight. For example, through Machine Learning (ML) for AP automation, autonomous AP can analyze supplier details that have changed to detect fraud or double payments. Catching these issues early in the invoice process ensures quick resolution of errors and flags potential fraud.

Autonomous AP can handle complexities such as direct, indirect and employee expenses. These are challenges that simple automation tools like machine learning and robotic process automation cannot address without human intervention.

With autonomous AP, most of the work is carried out by AI-enabled AP workflows that continually learn and adapt to errors, patterns and changes. Annoying issues like inconsistent PO number formats and difficulty identifying suppliers often frustrate AP teams, but autonomous AP can effectively resolve these challenges. Additionally, the technology has a faster learning curve, enabling you to detect errors and fraudulent trends earlier and more frequently than traditional automated solutions. These benefits not only bring satisfaction to the IT department by reducing the need for constant oversight in e-invoicing but also empower AP teams without technical skills to rely on technology for tasks that previously required human assistance.

IDC states, “Where automation dictates that a certain set of actions happen when the trigger event occurs, autonomous, through AI/ML, dictates that the right set of actions happen when triggered, even when the underlying details shift… In short, autonomy allows for the right actions to happen even amid uncertainty and change.”

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Automated AP

  • Applies to select tasks or parts of the AP process
  • Requires manual intervention
  • Rule-based configuration
  • Leverages digitization and some AI-backed technologies

Autonomous AP

  • Combines digitization and AI functionalities across the entire AP process
  • Ability to learn and adapt dynamically to change
  • Does not require human intervention

AI icon

The role of artificial intelligence (AI) in accounts payable that’s autonomous

Artificial intelligence is the ability of a digital computer or computer-controlled robot to perform tasks that were once only done by humans. Artificial intelligence is the backbone and core differentiator of autonomous AP.

The real magic of AI and machine learning in accounts payable goes beyond just optimizing processes; it's about eliminating them altogether. Below are some examples of how AI-driven accounts payable automation plays an important role in autonomous AP.

Importance to reduce level of human intervention to enable STP

From a cost control and risk point of view, how important is it to reduce the level of human intervention in the following steps to enable straight-through processing? (Top 2 box summary table)

(% of respondents)

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IDC's Autonomous Processing Survey, August 2022

* n = 360, Source: IDC's Autonomous Processing Survey, August 2022

scatter plot iconDynamic adaptability and continuous learning

AI-powered autonomous systems have the incredible ability to learn and adapt dynamically. By analyzing historical data and identifying patterns, machine learning algorithms can adjust approval workflows and processing rules in real-time. This iterative learning process ensures the system becomes more efficient and effective as it encounters new scenarios without requiring frequent manual adjustments. This kind of adaptability enables a more flexible and responsive accounts payable process, making everyone's lives a little easier – from the accounts payable team to the IT team to the CFO.

data iconUnstructured data handling

AI, especially NLP, is great at understanding and interpreting unstructured data. This means autonomous systems can extract valuable information from all kinds of complex sources, making data more accurate and complete.

Intelligent Document Processing (IDP) is a tool that transforms unstructured or semi-structured data into structured and usable information. With IDP, AP teams can leverage invoice scanning tools to pull information into structured data for analysis.

Optical Character Recognition (OCR) extracts text from paper documents and is a superpower when combined with IDP. These AI technologies can create detailed info from unstructured data, giving insights into payment timing and eliminating mistakes like double payments. This data also acts as a benchmarking tool, showing which invoice payment processes need refining. Without human intervention, these powerful tools go beyond simple automation to autonomous AP.

cycling arrows iconIntelligent invoice processing

AI can effortlessly handle unstructured data, diverse formats and multiple languages, which boosts the accuracy and efficiency of your invoice processing system. Automated e-invoicing systems and data extraction and verification significantly reduce data entry errors and minimize overpayments, duplicate payments and other costly mistakes. This enables straight-through invoice processing and true autonomous accounts payable.

analytics iconPredictive analytics

AI-powered autonomous systems use predictive analytics to anticipate cash flow, detect payment trends and proactively address potential concerns. Leveraging AI-backed technology helps you achieve more accurate and timely cash forecasting. Liabilities are instantly recorded and measurable, enabling real-time and precise cash forecasting. This empowers organizations to enhance liquidity management and optimize working capital. A proactive approach like this helps make informed decisions and capitalize on early payment discounts to boost financial efficiency. It’s doing the work without the manual manipulation of reporting – a signature of autonomous AP.

shield iconFraud detection and risk mitigation

AI-powered fraud detection for AP always monitors transactions, vendor behavior and historical patterns. This helps the system spot any unusual activity or potential fraud in real- time. It's like having an extra layer of security that keeps your finances safe and minimizes the risk of losing money to fake invoices.

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IDC - Accounts payable moving from automated to autonomous

New Frontiers in Accounts Payable: Automation, Digitization and Impact

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