Intelligent finance invoice processing with SAP AI Business Services
As part of the Hyperautomation Webinar Series, I presented a session how users can combine different AI Business Services to provide instant business value to enterprises. This blog post presents the key content for you to take away.
Reducing the burden of business document processing
Many processes in enterprises still involve handling business documents — for example, supplier invoices in accounts payable or customer orders in sales, and so on. Even though there are various ways to electronically exchange information, large numbers of documents are still processed manually.
The challenge is to automatically transform unstructured documents into structured information and embed it directly into business processes to generate instant business value. This is exactly the definition of the value proposition of AI Business Services related to Business Document Processing.
Business Document Processing typically consists of three steps (see also figure 1):
- Classifying: When document arrives, you need to understand what type of document it is in order to know what to do with it.
- Extracting business-relevant information.
- Enriching extracted information with additional master data and posting it to the system of record for further processing.
Figure 1: Business Document Processing with AI Business Services.
The business value can be seen in:
- increased automation rate, meaning less human involvement in the process,
- higher accuracy by leveraging the latest machine learning algorithms,
- increased processing speed and operational efficiently.
Implementing such processes, companies can achieve significant cost reductions by reducing the need for human labor (for more information about the related AI Business Services you can read my previous blog post: Simplify Business Document Processing with SAP AI Business Services).
Business Scenario: Supplier Invoice Processing
The business scenario at hand refers to Supplier Invoice Processing in Accounts Payable (AP). AP is the most time and labor-intensive finance and administration function. In fact, processing costs per invoice range from 5 to 12 US dollars, and roughly 62% of those costs come from manual processing (Driscoll, 2015). Often what we observe with our customers is that invoices arrive without a reference document (such as a purchase order number), causing AP departments to invest lot of time manually inserting the required information for correcting or completing the invoice or trying to determine the correct cost object (such as General Ledger account). It is a highly repetitive and cost-intensive task.
AI-enabled components on SAP Business Technology Platform can provide significant support here:
- Document Information Extraction can provide added value by automatically extracting and enriching unstructured data from an invoice.
- Invoice Object Recommendation can predict correct account assignments.
The optimized process is as follows (see also figure 2):
- An invoice arrives in the system (via email or web interface) and data is automatically extracted.
- The invoice is automatically enriched with supplier data from the corresponding master data records.
- A customized ML-model predicts a G/L account and the cost center.
- The final version of the invoice is created in the system of record for further reconciliation processes.
Figure 2: Intelligent finance invoice processing with SAP AI Business Services.
The benefits are:
- Accelerated information extraction from unstructured documents,
- Correct G/L assignment choices,
- Reduced redundancy and effort spent on post-processing account corrections,
- Enhancing Financial reporting thanks to minimized account discrepancies,
- More time for teams to focus on strategic tasks such as optimizing payment strategies.
If you are interested in gaining a greater understanding of the business process and the integration architecture, I recommend reviewing the recording from my session (30 minutes), which can be found on SAP Technology’s official YT-channel.
For further information please refer to following assets below:
- Use Machine Learning to Process Business Documents
- Use Machine Learning to Get Recommendations of Invoice Financial Objects
- Simplify Business Document Processing with SAP AI Business Services
- Simplify your Procurement Process and Automate Accounts Payable with Invoice Object Recommendation
Also check out SAP Community Page for further information and the latest content: SAP AI Business Services.
Driscoll, Mary (2015): Metric of the Month: Accounts Payable Process Cost, URL: https://www.cfo.com/expense-management/2015/06/metric-month-accounts-payable-process-cost/, retrieved: September 02, 2021.