Is GenAI the Secret Weapon Invoices Have Been Waiting For?

The digitization of B2B payments has proceeded along a path where FinTechs, platforms, banks and corporates work in sync to cut down on paper and manual processes.

The invoice is among the most critical links in the chain between buyers and suppliers, as ERP systems and the flow of information to payables systems are ultimately what gets the transaction done and moves money from one company to another.

Alex Hoffmann, general manager of North America at Edenred Pay, said using advanced technologies, especially generative artificial intelligence, will have a seismic impact in the back office.

“For a long time, the industry has offered up paperless alternatives to payments,” including virtual cards, and real-time payments are poised to gain even more traction, he said. “What GenAI adds on top of all this is that beyond the payment, we can automate the invoice-to-pay cycle.”

The conversation took place as part of the “What’s Next in Payments: Memo to the GenAI Companies,” which seeks to explore how firms are using the advanced technology to improve everything from back-office operations to payments themselves while creating new business models.

The notion that “GenAI is transforming the world has become well accepted,” said Hoffmann, whose company offers a full scale of solutions to chief financial officers as they modernize their accounts payable processes.

“Within the space of the office of the CFO and accounts payable, that’s where GenAI may be most transformative,” he said.

As he put it, generative AI is a tool to extract invoice headers and line-item data in various formats, spanning PDFs, images and even handwritten documents.

“This reduces manual intervention during data capture, which reduces the possibility of errors,” Hoffmann said. “…AI can have a huge impact in automating and comparing the data on invoices and orders … and therefore the allocation of customer payments.”

There are already inroads being made in industries that have long been dominated by paper invoices and paper checks, such as the hospitality space, where Edenred has sought to simplify general ledger coding and high transaction volumes that occur across diverse revenue streams (food, beverage and bookings, for example). Property management is another sector of promise, tied to manually routed invoices dispersed across a wide geographic terrain of far-flung properties. Media companies are complex and large entities that often must deal with staggered payments across various stakeholders.

Generative AI is also proving a boon for improving the approvals process, allowing for more dynamic workflows. Previous technologies simply put parameters on, say, a payment amount, but that was about it. Now, advanced technologies can route invoices automatically to specific parties, including specific suppliers for a specific payment amount.

None of this works without robust guardrails in place to battle fraudsters. B2B transactions often are high-dollar interactions, and as Hoffmann said, “where there’s money, there are crooks.” Machine learning has been employed for fraud management for years, but generative AI can build additional lines of defense, detecting anomalies that may point to payments fraud or compliance issues (for instance, during supplier onboarding).

“We can use now autonomous fraud agents to facilitate a multifaceted approach, looking at data anomalies across multiple third-party applications,” tracking the velocity of the invoices themselves, Hoffmann told PYMNTS.

The same data and technology can improve the relationships between buyers and suppliers, offering extensions of terms and credit facilities, where appropriate, for suppliers, he said.

The power inherent in generative AI and automation will be most fully realized with standards focused on how AI models can be built and deployed, he said. We’re headed toward a time when a firm can say they are using “ChatGPT Model No. 5,” and there will be widespread recognition of what that model does and what levels of security are tied to it.

Along the way, he said, “we can help streamline and speed up the invoice-to-pay cycles that will lead to better supplier relationships and more accurate payments.”

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