AI-powered cash application is powerful. It overcomes the challenges of data capture, matching receipts to invoices, and data entry and posting into ERP systems. But ERP systems differ, and AI-powered cash applications must be able to manage those differences. Here’s how leading AR Automation System providers like Emagia handle the cash application automation for SAP using AI.
AI-Powered Cash Application
Next-level cash application automation is here. Artificial intelligence (AI) and other technological tools applied to enterprises’ cash applications enable 90 percent auto-match of receipts to invoices, with automated deductions creation and exception assistance.
AI-powered cash application effectively automates three main challenges associated with the cash application process: data capture from multiple sources, formats, languages, and currencies; the complex job of matching invoices to receipts; and, critically, data entry and posting into the user’s ERP system. Where predecessor technologies of OCR and RPA assisted with these tasks, they still required human involvement.
The Power of AI and Analytics
On the first point, payments and remittance advice come through many channels, in various formats and document types, and even in many languages and currencies. These variants present a challenge that ordinary OCR and RPA cannot handle.
However, AI changes the picture. AI-assisted RPA aggregates remittance information from all sources, whether lockbox images, customers’ vendor portals, email et cetera. Then cognitive data capture employs deep learning to decipher remittance advice across both structured and unstructured data formats to prepare it for auto-matching.
A Smarter Auto-Match Engine
An AI- and analytics-powered auto-cash engine then matches receipts to invoices with an ever-higher degree of accuracy as it learns customer habits and practices from the data. It can even correctly match instances where remittance information is partial or incorrect. And it provides exception-handling support based on an analytics-based understanding of customer behavior.
Multiple level customer- and invoice-identification algorithms operate at digital speed to reach 90 percent auto-match. In addition, analytics offers match suggestions for the 10 percent of on-account and unapplied payments, enabling faster exception handling.
AI-supported cash application also automatically identifies short pays and overpays with reason codes, which it routes automatically to designated resolvers through a workflow. Analytics monitor throughput, backlogs and error rates and identify root causes of problems. It also identifies bottlenecks and customers with high unapplied cash, enabling staff to address and resolve issues.
ERP Integration: SAP Tailoring
An intelligent cash application solution must, of course, also understand and cohere with the user’s ERP system. But there are variances in the way different ERPs manage cash application and payments posting. SAP is a case in point.
SAP handles short payments and deductions differently than Oracle and other systems. In SAP, if an invoice is short paid, SAP does not leave the invoice open, adjusted down to the unpaid amount. Instead, SAP closes the invoice and generates a new “residual” document. This residual document represents the short-paid or disputed amount.
An intelligent AR automation platform working with an SAP shop must handle deductions in this same way to produce the right outcome to integrate into SAP. And an intelligent AR platform’s data output must suit SAP’s format for general ledger posting.
Another area where ERPs differ is in data feed mechanisms. Here, later versions of SAP provide APIs to ease data interfacing, though earlier versions do not and require a flat file. Intelligent AR Automation Platforms must readily accommodate these differences.
Case in Point
Emagia provides enterprise-wide AI-powered cash application, including a powerful auto cash engine. In addition, it creates outputs suited to SAP’s ERP systems as well as several other ERPs.
Emagia brings a combination of AI, analytics and automation to the various tasks involved in cash application, operating from data aggregated in a single source. Its cash application module achieves 90 percent auto-match while providing intelligent support to exception handling of on-account and unapplied payments, thereby freeing staff from a tremendous amount of time-consuming work.
Along with requiring fewer FTEs for cash application, digital cash application reduces bank fees, applies cash more quickly and accurately. Customer account balances are updated faster and more accurately as well. Outcomes for users include time and money savings and improved customer experience.
For a demonstration of Emagia’s Cash Application or entire Enterprise Receivables Management Suite, contact Emagia.
Also Check Out:
- AI-powered Cash Application Automation for Oracle
- Adding AI Advantage to Cash Application
- eBook: Modernizing Cash Application with the 3As: Automation, Analytics, and AI
- Overcoming the challenges to Order to Cash Automation in the 2020’s
- Challenges to Cash Application Automation in Europe
1 For details of Emagia’s integration with Oracle, see AI-Powered Cash Application Automation for Oracle.