AP Automation for Food Manufacturing: Tackling Industry Challenges During the COVID-19 Pandemic

The COVID-19 pandemic proved to be a universal equalizer—not leaving anyone untouched. Businesses throughout the world felt its impact. Some struggled harder than others. And the food manufacturing industry is one such example.

The food manufacturing industry faced extreme challenges due to the COVID-19 shutdowns and restrictions. Its supply chain is so fragile that even a single disruption in the chain affects operational efficiency and productivity. Furthermore, challenges like erratic demand and supply patterns, unavailability of labour, extra hygiene and social distancing restrictions, and non-essential plants' closures put additional pressure on resources and costs. 

In such a scenario, managing supply cycles and optimizing overhead costs while ensuring the health and safety of its employees was a balancing act for businesses. It is not all doom and gloom, however! Some organizations navigated the situation successfully by automating their operations to optimize both resources and costs. For some departments like Accounts Payable (AP), for instance, automation proved particularly beneficial. 

A lot has changed in the food manufacturing industry

Food and beverages companies that relied on handwritten invoices and paper documents had to make radical changes to their back-office processes. They had to find a way to limit physical contact, access billing information remotely while still getting AP tasks done. No longer was entering data manually from paper invoices feasible or sorting through files of stored papers.

Many companies had to adapt their production lines to meet regulatory post-pandemic demands of hygiene and safe distancing. Some had to cope with delayed supply chains while facing increased demand for food items. Transport and logistics disruptions led to increases in both delivery times and costs. 

Food companies that earlier followed a 'just-in-time' approach had to build up their inventory to avoid running out of stock of essential food items in high demand.

All these businesses needed robust IT infrastructure to allow their vital food manufacturing units to function in pandemic conditions, with employees working from home.

Deploying automation solutions helped many food manufacturing companies overcome time-consuming, manual back-office processes like accounts payable.

So, what does AP automation entail?

The AP department is responsible for making timely vendor payments, maintaining accounting control, and managing cash flow efficiently. In an ideal setting, it also adds value through fraud–prevention practices and data analysis. However, manual invoice processing is a tedious and time-consuming process. Capturing, recording, and then processing the information in each invoice takes up a lot of your AP team's time, not to mention the higher chances of mistakes and omissions.

Automated invoice processing & intelligent data capture 

Documents and data form the backbone of any business. Cutting out manual paperwork, minimizing mistakes, and processing these documents faster is the key to success—especially for accounts and finance teams.

Automated invoice processing eases the AP process by leaps and bounds.

Technology solutions like automated invoice processing and intelligent data capture boost operational efficiency and reduce costs. AP teams that use automated processes report faster turnaround times, higher accuracy and security, and better resource optimization.

Optical character recognition (OCR) extracts information from scanned paper invoices and makes each document searchable at a line-item level of detail. AP teams can easily access, evaluate, and share expense information digitally across offices and locations, thanks to advanced document imaging and OCR technology. It enables them to search and locate invoice and bill details by vendor, item purchased, amount and more, making reconciliation and audits easier and faster. 

Intelligent Document Processing (IDP)

Critical pieces of data are often trapped in documents—for example, in scanned images that are not machine-readable. Extracting this data and storing it in a usable format readable by other existing software systems is a slow and incredibly tedious manual process. 

Another example of trapped data is handwritten documents such as notes or invoices. Traditional OCR software cannot understand the cursive or irregular forms and translate them correctly into alphabets. That's where Artificial Intelligence kicks in to help! AI-based character recognition is making considerable strides in improving accuracy and providing automated extraction that reduces manual intervention and processing costs. It allows end-users and organizations to turn documents into structured data, thus making data interoperable between the DMS and other existing software systems. 

Using OCR and ICR (Intelligent Character Recognition) technology, you can convert any scanned image into text, no matter the format. Intelligent Document Processing (IDP) solutions intelligently understand and transform even handwritten text in manual invoices into digital formats. Batch uploads of paper-based invoices and high-security cloud storage add even more value. Automated invoice processing eases the AP process by leaps and bounds.

Benefits of AP automation for food manufacturers

AP automation brings some remarkable benefits to the food manufacturing industry: 

  • Automation completely transforms your AP processes 

Automation changes the way vendors, internal departments, and AP teams interact with one another. Where AP teams spend precious time matching purchase orders with goods receipts in a manual process, intelligent process automation enables optimized workflows. Minimal manual intervention ensures high accuracy, meaning the chances of going back and forth for query resolution are low. The AP team can monitor delays, analyze the best corrective measures possible, and introduce remedial action accordingly. 

2. Automation enables data sharing through automatic integration with other software systems

In these uncertain times, more than ever before, businesses need to keep an eagle eye on the daily sales report and keep a regular check on their financial health. Faced with fluctuating demand, the food manufacturer may want to have a random look at the P&L report from time to time. With AP automation, accessing MIS reports is a quick task, unlike the manual month-end accounting process. Advanced automation tools interface easily with existing software systems, and data sharing becomes seamless between the production, sales, and AP teams.

3. Automation reduces operational costs at multiple levels

 Automating AP processes in an organization offers cost benefits on various fronts. Automating repetitive tasks paves the way for salary cost reduction as fewer people can do more in the same amount of time. Besides enabling remote working processes that are faster, more accurate, and more efficient, they free up precious time for the AP team. In addition, most AP automation solutions use cloud data storage, providing better security for financial documents and requiring much lesser space than physical document storage. That automatically helps the business save costs.

During the recent pandemic, many businesses in the food manufacturing and services sector struggled to stay afloat. The ones who embraced automation successfully made their businesses future-ready. However, while there are significant advantages of automating AP processes, it can't be an overnight process. You need an experienced digital transformation partner to plan and implement your AP automation roadmap meticulously. 

DRS Imaging has over half a century of experience with document imaging and document management services. 

We understand how to harness technology to help improve the coordination between vendors, customers, partners and your manufacturing. 

We are experts in providing innovation in accounts receivable, accounts payable, engineering, logistics, HR, and much more.

As specialists in intelligent data capture services, we offer the most sophisticated technology solutions to execute your organization's long-term document imaging and data management strategy.

Have you been struggling with AP bottlenecks in your business in recent times? Get in touch with us today to know how DRS can ease AP automation for you!