Accounts payable (AP) clerks are already seeing machine-learning programs automate and streamline their daily work by flagging suspicious invoices and reducing cycle time to save their organizations money.
Artificial intelligence is boosting efficiency and making life easier for thousands of AP professionals today. But many of these professionals are undoubtedly wondering if sophisticated software might one day put them out of a job.
Workers at nearly every level—and across every industry—are worried about the same thing. Robots are waiting on hotel guests in some countries, while algorithms are writing movie scripts, drones are analyzing crop yields, and IBM’s supercomputer is diagnosing disease.
How long before the human touch is also declared redundant?
Human workers being displaced by intelligent machines is a real possibility in some sectors. But if history is any judge, job displacement is just the first chapter of a much longer story, a story that ends with humans and machines working productively side-by-side.
Created by Ryan Mason
Automation leads to evolution
Automation can lead to job loss, but it often creates new jobs as it renders old ones obsolete.
David Autor, an economics professor at the Massachusetts Institute of Technology, points out in a 2015 study that even as automation lays waste to a certain number of jobs, it boosts the productivity and output of enterprises, which raises demand for skilled tasks that only humans can perform.
The personal banking sector, which saw tremendous upheaval after the introduction of automated teller machines (ATMs) in the 1970s, provides a useful lesson. After a phased rollout of ATMs in a limited number of bank branches, their numbers quadrupled from around 100,000 to 400,000 between 1995 and 2010, according to James Bessen, a lecturer at the Boston University School of Law who analyzed automation trends in a report to the International Monetary Fund in 2015.
While tellers were naturally worried about their positions being eliminated, their numbers were not significantly impacted, Bessen found. Although the number of tellers at individual branches declined as ATMs proliferated, the cost of operating a bank also dropped. This means banks could open more branches, which in turn upped the demand for human workers. Personal banking today is a combination of people and machines, and the result is a business sector that does a much better job of serving the customer.
While consumers are pleased with the convenience of drawing funds out of a machine, bank tellers—with hours’ worth of mundane tasks off their plates—can concentrate on the type of work that a machine may never be able to handle: forming relationships with the customer. Tellers today can introduce the customer to other services offered by their bank, including loans and investment products.
The ATM, then, didn’t eliminate the bank teller. It evolved the teller’s job.
Partial accounts payable automation
Fear of job loss to machines is often predicated on the idea that one’s workplace could become fully automated. But partial automation is a far more reasonable scenario, as a January 2017 report from the McKinsey Global Institute found.
Partial automation is already changing the game in industries that many believed could never be automated. Intelligent machines are working alongside doctors, lawyers, engineers, stock traders, and military commanders.
If partial automation has not yet arrived in the accounts payable department of your organization, it likely won’t be long until it does. Rather than replacing the AP clerk, it will simply force that position to evolve. And that’s where the automation process ceases to be frightening and becomes exciting.
The human role in AP automation
When an AP professional is no longer spending long hours examining and manually entering piles of purchasing orders, receipts and invoices, what might that person do instead? As machines increasingly take over repetitive and time-consuming tasks, the AP clerk will ask, “What can I do that a machine cannot? In what creative new ways can I add value to my organization?”
The new duties and responsibilities of the AP clerk are still taking shape. In midsize businesses, the AP department is playing a strategic role. That’s because automation graduates people from data entry with almost no strategic impact, to data analysis and collaboration. Add in machine intelligence, and the AP department becomes part of a broader sourcing strategy.
Here are two examples. Data analysis helps a company discover trends and discrepancies within its vendor network, but it still takes humans to act on them. Imagine you’re managing restaurants at dozens of locations.
Accountants can analyze what specific food items are costing store by store. They might realize that the same vendor is charging more at some locations. Or the same product might be supplied by two different vendors.
It provides the timely information to start a conversation with your suppliers to consolidate with the cheaper provider or to renegotiate payment terms.
AI can also help with supply chain financing. When it comes to early payment discounts, some companies can't participate because their cash flow doesn’t allow them to. But it’s often cheaper to borrow money to pay early than to pass up the discount. With the extra time automation brings to the mix, the accounting department can suddenly make a difference in supply chain financing.
We’re in the early chapter of a much longer story with the automation of work done by humans today. Intelligent machines will redefine our jobs as they boost productivity. Rather than taking your job, AI will free you up to do more.
As an AP professional, what will you do with your newfound freedom?
A version of this article first appeared in Spend Matters.
About the AuthorMore Content by Laurent Charpentier