You can’t afford to ignore important business processes. Someone has to take care of them, it’s just a question of who.
Procure to pay is a great example. When a company makes a purchase, it must pay for it eventually. But, you have choices about how you manage your accounts payable process: You can manage the work internally with optical character recognition software, or you can engage an experienced finance and accounting service partner. Both options are attractive, but one has an edge over the other.
OCR Software vs. AP Automation
On paper, OCR software offers amazing potential. Imagine a tool that scans your paper invoices, reads them for their important data and then populates that information into a field on your computer. Abracadabra—magic, right?
Unfortunately, OCR is never as accurate as you expect. The quality of the extraction is only as good as the quality of the source document. That means you still need people to inspect quality and remediate errors while reviewing invoices and confirming GL coding. Has the process been streamlined? Maybe a little. But has it been automated? Definitely not.
OCR software is also costly, even if it seems inexpensive compared to ongoing service from a service partner. Don’t forget, you have to recruit, hire and train people to not only run the software but also to train it and maintain it. And what happens when that software, and the technology running it, is no longer up to date? To keep pace with today’s changing technology, organizations that rely on OCR software will have to continue investing to ensure their in-house operations are running smoothly.
All of this is very different when you entrust your AP processes to an F&A service partner. A partner may still leverage OCR, but they have another tool in their toolbox—robotic process automation (RPA). Through RPA, customers are able to benefit from scalable solutions such as advanced rules engines and machine learning, which improve efficiency and quality with each invoice. This really is magic.
The economics are better as well. Using this model, your service provider delivers the entire solution—technology and processing—in one neat bundle.
Innovative Companies Choose Innovative Solutions
While OCR has changed how some companies process their invoices, has the status quo really changed? Companies using OCR software still need to have enough people to not only operate and maintain their investment, but also to identify GL coding and errors. Processing invoices is still, in other words, a manual process. For some companies, that’s acceptable. But for innovative companies, settling for acceptable is actually unacceptable, especially when there’s a whole other paradigm to consider.
Remember, you have to pay your suppliers eventually, but you don’t have to swap the challenge of managing people for the challenge of maintaining software. Modern companies that want to innovate are choosing to partner with a service provider that can help them leave the old paradigm behind for one that’s automated, scalable and empowering.
Download our white paper to learn more about how AP automation represents a new paradigm for accounts payable.