Thanks to digital trails left by financial transactions and the advancement of machine learning, businesses will soon understand exactly where their money's going after it leaves their coffers. Artificial intelligence is helping organizations to track and visualize their company spending better, helping leaders to create a more cost-effective and transparent business model.
Businesses face numerous expenses every day, ranging from work needs, flights, car share rides, office supplies, and birthday celebrations for coworkers. And, many times, your employees are in charge of tracking, getting approval, and getting reimbursements for these expenses. Without a standardized and automated process, this process places a strain on your ability to accurately and effectively track spending. The headaches that come from tracking each small expense are something that organizations are actively seeking to avoid.
When it comes down to tracking payments, the truth is that no one likes to have to adhere to a system of processes, approval flows, and policies. Days can quickly become hectic, and these processes take the focus away from what you were hired to do. This can cause a massive headache and be of large inconvenience for everyone. But, the importance of tracking and analyzing payments is still crucial towards the success of your company.
Smaller purchases (commonly referred to as “tail spend”) or non-contracted spend are often challenging to track. Even with recent developments in technology and software solutions, companies have trouble gaining 100% visibility into their tail spend. Years ago, organizations thought their efforts to track this spending were futile, with many leaders deciding to toss in the towel. But, with a digital-first approach to business, that soon might change.
So, how do you balance the need for tracking while minimizing the inconvenience your processes provide? The key lies in relying on advanced technologies and artificial intelligence.
Bonus Material: Take charge of your invoicing processes by embracing a digital-first approach. With the support of an e-invoicing program, you can better manage your cash flow and secure earlier payments.
AI and its subparts, such as machine learning (ML), deep learning, and data mining, are poised to usher in a transformation in spend visibility. Giving you total spend visibility, these tools can help you to make more informed decisions regarding sourcing, budgeting, approvals, and more. With real-time insights, you can help to adapt in times of uncertainty, better meet the current demands of your operations, and uncover hidden pockets of savings in your organization. Put simply, tracking your spending accurately can help you protect your bottom line and keep your cash flow running smoothly.
Spend visibility on this level requires a comprehensive view into where your company spends all of its money. That includes tracking everything, such as corporate credit card transactions, ACH payments, paper invoices, purchase orders, checks made out to vendors, p-cards, package slips, and any other transaction info between you and your suppliers. Anything that is not digitized needs to be moved to a digital platform before fully embracing a digital-first approach.
Bonus Material: To have a truly collaborative and transparent business model, you need to ensure a clear and consistent flow of communication and information. Part of that starts with breaking down any silos that exist in your company. Check out our guide for breaking down silos within your Accounts Payable team to get started.
Let’s be honest. Collecting and organizing all financial transactions is a time-consuming and heavy-duty task. Paper transactions, emails, PDFs, and other unstructured formats can be a pain to sort through, which is why it is a task perfectly suited for the world of AI and ML. These software and advanced technology solutions can make sense of the high volumes of data from these sources and bring it into a consistent form much more quickly than humans can.
Using machine learning, companies can capture the data from the formats above, analyze the information, and store it under one roof for company-wide spend intelligence.
Just imagine if you’d have ALL your spend data extracted, combined, validated, classified, and enhanced with related business information, all with ML automating throughout the process. Your company’s finance and procurement experts would only need to spot-check for accuracy and answer occasional questions to ensure the model kept working. Common errors, costly processing time, and inaccuracies caused by human biases would cease to exist.
Machine learning and artificial intelligence can be used to benefit multiple different functions and processes in your organization. Spend classification, for instance, which is one area companies — even those with sophisticated procurement systems — have a hard time understanding. Machine learning algorithms can combine and crunch through all your data sources, including ERP, eProcurement, p-cards, and other external systems, and do things like accurately tag line-level details from invoices, ensuring accurate spend categorization.
ML can also combine data from the incoming side of the transaction to the outgoing side to give you deeper insight into the state of your relationships with suppliers, customers, and partners. And, you’ll be able to use that insight to change how your organization spends to meet your goals.
Compared to commonly used approaches today, applying new AI technology to spend visibility would create the greatest attainable clarity in your cash outflows, spend categories, subcategories, and vendors. You’ll be well equipped to determine and predict your future needs based on verifiable data. Thanks to the latest in AI, machine learning, and digital commerce, we are on the verge of a paradigm shift where all spending will be accounted for, bringing connected processes and incredible efficiency with it.
Want to learn more about how to use machine learning and artificial intelligence to enhance your business operations and track your spending? Reach out to our team of experts to speak with us today.