How AI Is Changing Invoicingby@ShannonFlynn
539 reads
539 reads

How AI Is Changing Invoicing

by ShannonApril 13th, 2023
Read on Terminal Reader
Read this story w/o Javascript
tldt arrow

Too Long; Didn't Read

Artificial intelligence (AI) is changing invoicing for the better. Fraud detection is the most common way the finance industry uses AI. E-invoicing has already made managing accounts receivable much faster than older, pen-and-paper approaches. As more companies use this technology, the financial sector will become far more accurate, safe and efficient.
featured image - How AI Is Changing Invoicing
Shannon HackerNoon profile picture

New, helpful technologies constantly emerge, but few are as disruptive as artificial intelligence (AI).

It’s hard to think of an industry AI can’t improve, but data-heavy, high-precision businesses like invoice factoring companies stand to gain more than most.

As e-invoicing becomes the norm, AI’s potential in the industry will only grow.

Managing accounts receivable is one of the essential parts of running a business, but it can also be risky, repetitive, and slow. That combination makes it the ideal use case for AI and the organization after the organization is catching on to that potential.

Here’s a closer look at how it’s changing invoicing for the better.

Fighting Fraud and Risk

Fraud detection is the most common way the finance industry uses AI, with 58% of financial services enterprises applying it here.

Machine learning algorithms are excellent at spotting trends in large data sets that people may miss, so they’re perfectly suited for identifying fraud and risk.

If a client with a reasonably consistent payment history suddenly starts missing payments or making much more purchases, it could signify fraud.

AI can catch this deviation from the norm, lock the account, and flag it for employees to investigate further.

Signals like this may be too subtle for human workers to catch until they become more extreme, so automating the process enables much faster responses.

Similarly, AI can examine a company’s financial history and cover various factors to determine its risk level.

Invoice factoring businesses — which buy outstanding debt from other enterprises to give them immediate cash flow — can use these insights to quickly and accurately qualify or disqualify potential customers.

Streamlining Processes

AI can also streamline many aspects of the invoicing process. E-invoicing has already made managing accounts receivable much faster than older, pen-and-paper approaches, but AI can take these benefits even further.

Reviewing documents to assess risk can take an employee hours, but AI can handle it in minutes — if not seconds.

Similarly, AI can bill clients, process payments, record transactions, and perform other data-entry tasks almost instantaneously.

That speed is impossible with manual means, and automating these tasks frees staff to focus on other work in the meantime.

This efficiency directly benefits customers, too. Factors pay up to 95% of an invoice upfront, so companies selling their accounts to these businesses expect fast service to get immediate cash flow.

By using AI for customer service, factors can complete these transactions in seconds, giving customers the cash they need and boosting customer satisfaction.

Minimizing Human Error

AI is also making invoice processes more accurate. Balancing finances involves a lot of detail-oriented work, which makes it hard to focus after hours of repetition and easy to make mistakes.

However, any errors here have direct financial impacts, so organizations want to avoid them as much as possible.

Unlike humans, AI can’t get tired, bored, or distracted. It delivers the same level of attention to detail and accuracy every time.

As a result, invoice factoring companies and other billing teams can virtually eliminate errors by automating with AI.

Fixing invoicing errors costs businesses an average of $53.50 per invoice. That can add up to thousands of dollars a year at a large enough enterprise.

Consequently, by using AI to manage these processes instead, businesses can significantly improve their bottom line. Minimizing errors will also help build better relationships with customers.

AI for E-Invoicing Is a Game Changer

AI for customer service has already made a significant impact across industries, but its potential goes beyond that.

As more companies use this technology in their invoicing processes, the financial sector will become far more accurate, safe, efficient, and convenient.

These benefits are worth paying attention to. They’ll soon make AI the industry standard for e-invoicing, forever changing the shape of the industry.