Why AI-driven exception handling in accounts payable is the future of efficiency

Key Takeaways:

• Exception handling is a major AP bottleneck, driving up cost per invoice and slowing the Procure-to-Pay cycle. 

• Next-gen AI-driven AP automation goes beyond basic OCR by interpreting context, improving data capture, and routing invoices into the right workflows. 

• AI exception handling learns how your team resolves discrepancies and applies dynamic, granular tolerances by vendor/commodity/amount to increase straight-through processing. 

• By auto-filling missing fields, enforcing compliance with risk scoring, and learning from every resolution, AI creates a continuous improvement loop that makes AP more “touchless” and shifts staff toward higher-value work. 

The accounts payable (AP) function has long grappled with a persistent, costly bottleneck: exception handling in accounts payable. In most organizations, a staggering 20% to 30% of invoices require manual human intervention. These exceptions are caused by anything from a slight price mismatch to missing vendor information and can create friction, increase the cost per invoice, and slow down the entire Procure-to-Pay (P2P) cycle. 

The good news is that the next generation of AP automation, driven by artificial intelligence, is transforming this pain point into a source of continuous process optimization. Modern AP systems are now moving far beyond simple data capture to offer true AI exception handling, which is essential for an efficient accounts payable process. 

The evolution of data capture beyond basic scanning

The first wave of AP automation provided meaningful efficiency gains by replacing manual data entry with technologies like Optical Character Recognition (OCR). Today, there are two generations of OCR. The first relies on positional rules to capture structured data. The newer, more advanced generation, used in platforms like Corcentric’s Intelligent AP Automation, is AI-driven OCR. 

This newer technology doesn’t just scan characters; it interprets context. It accurately identifies document types, extracts relevant fields, and routes them into the correct workflows. Crucially, it starts by bringing in more data into the AP process, which is the foundation for intelligent, automated matching and validation. 

The power of intelligent matching and dynamic tolerance

Traditional AP systems rely on rigid logic: If an invoice perfectly matches the purchase order and goods receipt, it’s approved; if not, it’s flagged. This simple “match or fail” approach doesn’t account for the real-world variability in B2B commerce. 

AI exception handling fundamentally changes this. 

• Learning to self-resolve: AI models are trained on historical data, learning how AP teams have previously resolved small discrepancies. For example, if your organization consistently accepts a minor price difference for a specific item, the AI learns this acceptable, contextual tolerance. It then automatically approves future invoices that fall within that learned margin, eliminating the manual exception. 

• Dynamic and granular tolerance: Instead of enforcing a static, blanket rule (like “accept all variances under 2%”), AI applies dynamic and granular tolerances based on the specific commodity, the vendor, and the amount. It understands that a small difference on an office supply order is negligible, but the same percentage variance on a high-value raw material shipment requires intervention. 

This nuance significantly increases the rate of straight-through processing while maintaining tight financial control where it matters most. 

How does AI improve efficiency beyond matching?

AI’s ability to create an efficient accounts payable process goes beyond just improving matching logic. It also ensures that the data flowing into the system is clean and complete, which drastically reduces the need for human review in the first place. 

1. Adaptive data capture and intelligent allocation

When the initial data capture struggles to confidently read a specific field on an invoice, the AI uses contextual knowledge to fill the gap, a process sometimes referred to as intelligent allocation. It draws on information such as: 

• Vendor history: If a vendor consistently charges a standard shipping fee, the AI can predict the missing field based on historical invoices. 

• PO/Contract terms: It uses the terms established in the associated PO or contract to predict and auto-fill missing details like payment dates, tax codes, or unit prices. 

This predictive capability minimizes the need for human correction of poor-quality data inputs. 

2. Streamlining the accounts payable approval process

AI supports the accounts payable approval process by actively enforcing compliance and Segregation of Duties (SoD). It doesn’t just enforce preset thresholds; it proactively looks for unusual patterns that human reviewers might miss, such as: 

• Unauthorized approvals: Flagging a user attempting to approve an invoice outside of their typical spending limit or cost center. 

• Approval pattern abuse: Uncovering suspicious pairing, such as two employees who rarely interact suddenly approving a string of high-value invoices from the same unfamiliar vendor. 

By providing a risk score and clear evidence trail, AI empowers AP teams to focus their human judgment on the small fraction of payments that genuinely pose a threat. 

The continuous improvement loop

The true differentiator of AI is its ability to learn from every single transaction. Every exception that is manually investigated, resolved, and approved by an AP specialist feeds directly back into the model, continuously refining its matching and prediction logic. 

This feedback loop means the system becomes demonstrably more accurate and “touchless” with every invoice processed, creating a scalable, self-optimizing AP environment. This transition elevates AP staff from transactional processors to strategic analysts, allowing them to focus on high-value activities like advanced spend analysis and supplier negotiation. 

Ready to move beyond the bottleneck?

AI-driven solutions are transforming AP from a costly administrative function to a secure, strategic control point, helping your organization achieve unprecedented rates of straight-through processing and significantly lower the cost per invoice. 

Get started with Corcentric today and begin your transformation to an intelligent, secure, and efficient AP function.