Automating Accounts Payable Using RPA

Accounts payable (AP) is the process of managing and paying invoices from vendors and suppliers. It is a vital function for any business, but it can also be time-consuming, error-prone and costly. Manual AP processes involve a lot of paperwork, data entry, approvals, reconciliations and payments. These tasks can take up valuable resources, lead to late payments, penalties, fraud and poor vendor relationships.

Robotic process automation (RPA) is a technology that can automate repetitive, rule-based tasks by mimicking human actions. RPA can help streamline and optimize AP processes by reducing manual work, improving accuracy, speed and compliance. RPA can also provide better visibility, control and analytics over AP workflows.

In this blog post, we will explore how RPA can automate various aspects of AP processes, such as invoice capture, validation, approval, payment and reconciliation. We will also provide some examples of how RPA can benefit different industries and use cases.

Invoice Capture

Invoice capture is the process of extracting data from invoices and entering it into the AP system. This can be done manually by scanning or emailing invoices, or automatically by using optical character recognition (OCR) or intelligent document processing (IDP) tools. OCR and IDP tools can read and interpret different types of invoices, such as paper, PDF or electronic formats, and extract relevant data fields, such as invoice number, date, amount, vendor name, etc.

RPA can automate invoice capture by integrating with OCR or IDP tools and transferring the extracted data to the AP system. RPA can also perform validations and checks on the data, such as verifying the vendor information, matching the invoice with the purchase order or contract, checking for duplicates or errors, etc. RPA can also handle exceptions and escalations by sending alerts or notifications to the AP staff or managers.

Example: A retail company receives thousands of invoices from different vendors every month. The company uses RPA to automate invoice capture by connecting with an IDP tool that can read and extract data from various invoice formats. The RPA bot then validates the data against the vendor master data and the purchase order database. If the invoice is valid, the bot enters it into the AP system. If there is any discrepancy or error, the bot sends an email to the AP staff for review and resolution.

Invoice Approval

Invoice approval is the process of verifying and authorizing invoices for payment. This can involve multiple steps and stakeholders, such as managers, finance teams, legal teams, etc. Invoice approval can be done manually by sending emails or using spreadsheets or workflows, or automatically by using business rules or artificial intelligence (AI) tools. Business rules or AI tools can apply predefined criteria or logic to approve invoices based on certain conditions, such as amount, vendor type, payment terms, etc.

RPA can automate invoice approval by integrating with business rules or AI tools and executing the approval workflow. RPA can also perform actions such as sending reminders or follow-ups to approvers, updating the invoice status in the AP system, generating reports or dashboards on the approval process, etc.

Example: A manufacturing company has a complex invoice approval process that involves multiple departments and levels of authorization. The company uses RPA to automate invoice approval by connecting with a business rules engine that can apply different approval criteria based on the invoice attributes. The RPA bot then triggers the approval workflow and sends emails to the approvers with the invoice details and a link to approve or reject it. The bot also tracks the progress of the approval process and updates the invoice status in the AP system.

Invoice Payment

Invoice payment is the process of disbursing funds to vendors and suppliers for their goods or services. This can be done manually by issuing checks or bank transfers, or automatically by using electronic payment methods such as credit cards, ACH or wire transfers. Electronic payment methods can offer benefits such as lower costs, faster processing time, better security and traceability.

RPA can automate invoice payment by integrating with electronic payment platforms and executing the payment transactions. RPA can also perform tasks such as generating payment vouchers or receipts, updating the payment status in the AP system, sending confirmation emails to vendors or suppliers, reconciling payments with bank statements, etc.

Example: A healthcare company pays its vendors and suppliers using different electronic payment methods depending on their preferences and contracts. The company uses RPA to automate invoice payment by connecting with an electronic payment platform that can support multiple payment options such as credit cards,

ACH or wire transfers.

The RPA bot then initiates the payment transactions based on the invoice amount, vendor name, payment method, etc.

The bot also updates the payment status in the AP system and sends confirmation emails to the vendors or suppliers.