What proactive and reactive methods does your company have in place to prevent paying accidental and fraudulent supplier overcharges? Some financial automation systems are able to support invoice organization and data storage, but aren’t fully developed. They aren’t able to audit and compare invoices to contracts line-by-line, catch duplicate charges or charges that do not account for rate changes and discounts, or do all this while providing peace of mind to your AP team that tasks are being done with precision.
The artificial intelligence of today (not to mention the technology still to come) is prepared to audit, record, and notify personnel of all things related to supplier invoices in an accurate and timely manner. AI is the new buzz word among finance teams and rightfully so. It assumes the position of taking on the behind the scenes number crunching and serves as a second (and third) pair of eyes for CPAs, providing reports with both accuracy and speed.
Below are four types of invoice errors that your finance department likely encounters, that only AI can catch:
1. The accidental overcharge
25% of incoming invoices contain errors. It’s up to accountants (and their tools) to catch those errors before payment is made. Auditing thousands of invoices from dozens of suppliers each month can cause errors to slip through the cracks when placed in the hands of humans. Automated invoice auditing software compares invoices received to the relevant initial contracts, audits documents line-by-line, and reports errors to staff.
2. Duplicate invoices received
You might be surprised to discover that duplicate invoices and the double charging of shipments is a common error that can be sniffed out during invoice auditing. Most cases of this start when the supplier sends two invoices. Then the carrier makes the error of paying both for reasons including a lack of control in accounts payable or having multiple means for accepting or paying invoices. While shady suppliers do exist, it is better to give them the benefit of the doubt should this issue arise and assume it is simply an invoicing error on their end.
3. Overlapping or cumulative invoices
Similar to the reason stated above, a supplier may send several invoices along with a quarter-end cumulative invoice. For example, three separate invoices at different amounts (one for $15,000, one for $8,500, and one for $10,200) and then a quarter-end invoice (for $33,700). Traditional invoice systems may not catch this, but AI will flag these invoices to help avoid the need for clawbacks.
4. Line-level errors
Not all AP automation systems extract line details from an invoice that describe what each item is – luckily OpenEnvoy does! AI will check for duplicates at the line level and discover that, for example, the same services were included in two separate invoices or that there is a discrepancy in quantity or price between the invoice and original contract.
The result of AI
Invoice errors can take many different forms and can be difficult to find in a standard manual audit. To gain visibility into business spend, many companies are embracing AI and achieving 100% visibility into supplier invoices, expenses, reimbursements, and payroll. Companies that automate their audit process are able to find errors, fraud, and non-compliant charges before payment is made.
How OpenEnvoy can help
With OpenEnvoy, every supplier invoice is audited in a quick and accurate fashion. With real time automated auditing technology, companies are alerted of discrepancies between invoices and contracts and are guided through the steps of fixing presented errors. According to Gartner, 53% savings is realized by companies that outsource invoice auditing. Additionally, they save the time it would take to manually find discrepancies and go through the process of contacting suppliers, and the money of blindly paying for duplicate billings, excess charges, and instances of supplier fraud before payment is actually made.
By investing in OpenEnvoy, you put another layer of control in your system and process to protect your company and its financial assets. Explore how OpenEnvoy can help your team reap the benefits of saving time and money through automating invoice auditing. Check out https://futurefinops.wpengine.com and make sure to connect with an expert.