Even the earliest versions of our software incorporated machine-learning that could identify and highlight risks of fraud or error. In fact, in 2021, we won a government grant to take our AI fraud detection work to the next level. The Government recognised the challenges that the public sector and the NHS faced with fraud. They provided us with £500,000 to further our research in conjunction with Reading University.
If you’re looking at digital transformation in your procure-to-pay process, why not opt for an AI-based risk management software?
You may be relying on your ERP, using 3-way matching to find discrepancies. Yet, it doesn’t always catch fraud or errors that occur outside that process. Although designed to be a robust system, it can miss duplicate invoices, overpayments and instances of procurement fraud. That’s because generally ERPs match values for product, quantity and price, but doesn’t compare them forensically with multiple sets of historical or current data. More about this later!
When used effectively, AI can help to optimise and protect your working capital. That includes checking for duplicates and possible payments that don’t match with previous orders. It’s designed to save your team valuable time that they can use to better manage their AP processes.
This blog lists how AI can work for you in accounts payable.
What is AI?
AI is computer software where the algorithms act similarly to human thought. It can analyse, reason, learn and even imitate natural communication. Where traditional software does a job, AI is capable of machine learning. Examples of AI in everyday life include digital assistants like Alexa, facial recognition software, and chatbots on websites. That software has moved on with the likes of ChatGPT.
So, let’s break down why AI can improve risk management in AP:
IT’S FASTER
AI can trawl through data that would usually take a person hours in minutes, freeing up your AP teams’ time. For example, a statement reconciliation on our software takes 11 seconds whereas it takes around 30 minutes manually.
IT’S AUTOMATED
Manual, repetitive tasks are a thing of the past. We’ve already seen automation with the introduction of e-invoices, but with AI taking on the data, it gets far more sophisticated. AI processes and compares data, allowing your team to see what they need to make informed decisions. It means that your team can focus on analysis or other projects rather than data entry. The list of data isn’t exhaustive. This can apply to statement reconciliation, duplicate invoices, supplier data, sanctions and ESG.
IT’S SMARTER
Unlike other software, AI learns on the job and can increase accuracy. It learns patterns from existing data, deducing anomalies and false positive results with a set of well-programmed algorithms. For example, where our AI software removed false positive results, it flagged 74.1% fewer risks**. That’s a huge time saving for the employee reviewing those risks!
In 3-way matching, duplicate invoices are matched to the same purchase order and goods receipt, but it will find no fault as the values will be identical. The team find the duplicate when they proceed to pay the invoice and see it was already paid. An AI can identify where invoices look similar or include the same details and flag this up before the payment run. This ensures organisations keep their working capital.
Another common failing of 3-way matching happens when your supplier has invoiced and sent more goods than usual in error, but the PO raised reflects those numbers. An AI flags that this does not reflect previous orders. 3-way matching will not detect an error, as the goods receipt will match and this will result in an overpayment.
IT PROTECTS YOUR WORKING CAPITAL
All those duplicates and lost credit notes pile up, so it’s likely that using AI will do wonders for recovering spend. When used consistently before the payment run, it pays even bigger dividends. It identifies errors before payment and so reduces cash leakage.
IT FREES UP YOUR TIME TO BE PROACTIVE
AI works hard in the background and allows you to streamline your processes, eliminate errors and focus risks. It enables your AP Team to proactively deliver back to the business, becoming less AP Clerk and more AP Analyst. This can help elevate the AP Team within the organisation.
How do FISCAL Technologies use AI in our risk management software?
We’ve integrated AI into our risk management software to forensically analyse your supplier and transactional data. It finds a multitude of discrepancies, each one designed to double check common, and uncommon signifiers of errors or fraud. From a differing supplier name that belongs to a duplicated invoice, to a transaction amount spike due to a data entry error. It also compares against previous sets of data to discern patterns and learns as the data input grows. The same way you would know a certain supplier often sends invoices to multiple places, the AI would know there’s a higher risk of duplicates from them.
There’s no risk – while our software finds discrepancies, it’s designed to inform a human who can review it further. This empowers your AP team to act to mitigate that risk, ultimately saving time and reducing cash leakage.
Interested in learning more about what we can do for you? Book a call or demonstration.
** Based on average figures from a sample of FISCAL customers who have moved to AI Software from non-AI software. The customer data was compared against their own benchmarks, and the mean average was then calculated.
