The ROI of Autonomous Invoice Processing with Vic.ai

In today's fast-paced business environment, companies are continually seeking innovative solutions to streamline operations and enhance efficiency. One area where automation is making a significant impact is accounts payable (AP). With the rise of artificial intelligence (AI) and machine learning, platforms like Vic.ai are pushing beyond automation to autonomous accounting, leading to a substantial return on investment (ROI). While automation reduces invoice processing time and errors, autonomous accounting solutions deliver additional ROI in maximizing human potential, and a quick payback on the technology investment.

By shifting to Vic.ai for autonomous accounting, you can start to see a payback in less than seven months.

The challenge of manual invoice processing and payments

Traditional invoice processing and payments are often time-consuming and error-prone. Finance teams grapple with mountains of paper invoices, complex data entry, and the risk of human errors that can result in costly mistakes. These inefficiencies not only hinder productivity but also lead to delayed payments, missed discounts, and strained vendor relationships. The pains of manual invoice processing are many, but investing in an autonomous accounting solution can transform the AP function into a strategic operation.

The promise of end-to-end invoice processing

With Vic.ai, your entire invoice process, from ingestion to PO matching to approvals to payments, is run by AI with humans as reviewers rather than processors. When the AI is confident enough, it doesn’t require review and can handle entire workflows autonomously. Vic.ai’s customers achieve Autopilot rates as high as 70%, at 99% accuracy within the first six months.

More specifically, Vic.ai enables AP departments to:

Increase efficiency: With Vic.ai, the need for manual data entry and paper handling is eliminated. Invoices are automatically scanned, extracted, and processed, reducing the time and effort required for invoice management.

Reduce errors: Human errors in AP data entry are virtually eliminated, leading to more accurate and error-free financial records. This ensures compliance with financial regulations and prevents costly mistakes.

Accelerate approval workflows: Vic.ai streamlines approval workflows, enabling faster processing and payment of invoices. This, in turn, can lead to early payment discounts and improved vendor relationships.

Enhance visibility: The platform provides real-time visibility into the invoice processing pipeline, allowing finance teams to track the status of invoices, monitor spending, and make data-driven decisions.

Optimize resource allocation: By automating routine tasks, Vic.ai frees up finance professionals to focus on strategic activities such as financial analysis, forecasting, and vendor negotiation.

Process and make payments: Vic.ai payments enables complete end-to-end invoice processing, with the ability to pay invoices by check, ACH, or card. Vic.ai also surfaces early payment discount opportunities, providing more control over cash flow management.

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Calculating the ROI of Vic.ai

Now, let's delve into how organizations can calculate the ROI of implementing Vic.ai for autonomous invoice processing:

Cost savings

1. Labor costs: Start by estimating the time spent by your AP team on manual invoice processing. Consider factors like salaries and benefits. With Vic.ai automating much of the process, you can calculate the labor cost savings.

2. Error reduction: Calculate the cost of errors in your manual process. This may include the cost of resolving disputes, late payment penalties, and duplicated payments. Vic.ai's accuracy can significantly reduce these costs.

3. Early payment discounts: Determine how many early payment discounts you miss due to slow processing. Vic.ai's efficiency can help you capture these discounts, resulting in direct savings.

Increased productivity

4. Time reallocation: Consider the additional strategic tasks your finance team can now focus on instead of data entry. Estimate the value of these activities in terms of potential revenue generation or cost reduction.

5. Faster decision-making: Calculate the financial benefits of having real-time insights into your invoice processing pipeline, enabling quicker decision-making and resource allocation.

Vendor relationships

6. Vendor discounts: Factor in the increased likelihood of receiving vendor discounts for early payment, thanks to faster invoice processing. Calculate the value of these discounts over time.

7. Improved vendor relations: Consider the indirect benefits of improved vendor relationships. This could result in better terms, lower prices, and even preferential treatment in the future.

A real-life ROI example

Let's illustrate the ROI calculation with a real-life customer example with the following starting point:

• Number of invoices annually: 250,000
• Expected invoice volume increase: 10%
• % Time spent on invoice processing: 75%
• Average cost per FTE in AP: $55,000
• Existing annual software cost, Vic.ai would replace: 50,000

With the current provider, the labor cost per invoice amounts to $3.30, and $0.53 with Vic.ai by lowering the time spent per invoice by 84%. Looking at labor costs and total number of invoices, the projected operational savings for the next five years looks as follows:
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By replacing the current system with Vic.ai and having these almost immediate operational savings, the yearly savings start in year 1 with close to $250,000 and up to $600,000 in year five for the customer in the example. And that doesn't even include the indirect savings.

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The indirect savings from autonomous accounting

While direct cost savings are tangible, and demonstrate a clear ROI, there are many intangible benefits from adopting an autonomous accounting solution. Vic.ai unlocks indirect cost savings and other business benefits, including:

Time reallocation: By automating repetitive manual tasks, AP teams can focus on higher-value strategic initiatives to drive growth and identify new business opportunities and revenue streams.

Risk mitigation: Continuously monitoring invoice and payment data helps identify anomalies and potential fraud early. Also, preventing duplicate payments saves companies, on average, 0.1% up to 0.5% of total spending (with inadequate internal controls, duplicate payments can be as high as 2%).

Early payment discounts: AI-enabled automation accelerates invoice processing and approvals, allowing companies to take advantage of vendor discounts for early payment. A typical discount is 2%, but some vendors offer up to 5%.

Month-end reporting: By automatically extracting, reconciling, and posting invoices, close cycles are significantly shorter, which allows for faster month-end reporting and the ability to see AP aging in realtime.

Compliance costs: Intelligent automation ensures compliant invoice and payment handling while automating audit trails. This reduces time and expenses connected to audit prep, manual internal controls, and correcting errors.

Improved vendor relations: Streamlining approvals and payments provides vendors with predictable payment cycles and consistent working capital. This strengthens vendor relationships and allows for negotiating better terms, pricing, and trade discounts.

Real, tangible ROI

The total annual ROI of implementing Vic.ai for autonomous invoice processing can be significant. As organizations strive for greater efficiency and cost savings, autonomous invoice processing with Vic.ai is a powerful tool to achieve these objectives. By automating manual tasks, reducing errors, accelerating approval workflows, and enhancing visibility, Vic.ai can be a powerful partner for your AP team. To stay competitive in today's business landscape, harnessing the power of AI in finance is not just an option; it's a strategic imperative.

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