Moderated by Sherry, Digital Transformation Consultant at Hyperbots
Sherry: Hello, and welcome to all our viewers on CFO Insights. I’m Sherry, a financial technology consultant at Hyperbots. Today, we are discussing the critical role of various types of addresses in invoices and purchase orders with Ayo Fashina, an accomplished finance leader with a diverse background spanning corporate finance operations and strategic advisory across multiple industries and regions. We’ll explore the importance of these addresses, the challenges involved, and how AI can help in addressing these issues. Thank you so much for joining us today, Ayo. To start, could you outline the different types of addresses that typically appear on invoices and purchase orders, and why each one is important?
Ayo: Certainly. So, the key addresses that we deal with generally include the vendor’s address, the company’s address, the ship-to and from addresses, the remit-to address for the payments, the billing address, or the legal address for the company itself. Sometimes, you have a registered office that’s different from all those addresses that I’ve talked about before. Each of these addresses serves a very distinct purpose that has to be dealt with carefully when you’re dealing with invoices.
Sherry: And which of these addresses that you just mentioned are critical to match during invoice processing? And why is it important?
Ayo: Of those addresses I’ve mentioned, the vendor and company addresses are used for the legal correspondences. So, when you want to send emails, messages, and letters, you have to use the right address for the vendor as well as the company. The ship-from and to addresses are critical for logistics because that’s where the goods are going from and to, and when the goods will be received. The remit-to address ensures the payments are sent to the correct location, whether it’s through paper checks or wire transfers. The billing address is where the invoice should be sent for processing. If the billing address is wrong, then the invoice might go to the wrong place, delaying the whole process. All of these addresses ensure that transactions are accurate and that goods, services, and payments reach the right destination for processing.
Sherry: And to touch upon some obstacles, what are some common challenges companies face when dealing with multiple addresses on invoices and POs?
Ayo: One of the biggest challenges is inconsistencies between documents. For example, the shipping address on an invoice might differ from the one on the PO due to a typo or outdated information. They may have updated one document, but not the other. Additionally, managing international addresses can be complex because you’re used to the addresses in your local market, but international addresses may have different formats and standards. Manual data entry errors can also happen, and vendors changing addresses without timely updates can cause significant issues, leading to delays, mismatches, and even fraud.
Sherry: How do these address discrepancies impact financial operations? And what risks do they impose?
Ayo: These discrepancies can disrupt the supply chain, causing delays in deliveries and payments. For example, if goods are shipped to the wrong address, there’s no goods-received note, which results in additional costs and delays as you try to move the goods from the wrong to the right address. In some cases, the goods may be completely lost. On the financial side, a mismatch in the remit-to address can lead to payments being sent to the wrong entity, increasing the risk of fraud. These errors can also trigger compliance issues, especially in international shipments and taxes, as they may be seen as attempts to avoid taxes or customs duties.
Sherry: Since AI is rapidly transforming the finance industry, I have to ask: given these challenges, what role can AI play in improving the handling of addresses in financial transactions?
Ayo: AI could be a game-changer here. It can standardize and normalize address formats across different documents, reducing inconsistencies. AI can also validate addresses by cross-referencing them with external databases to ensure they are accurate and up-to-date. Additionally, AI can intelligently match addresses on different documents, even with slight variations, and flag discrepancies that may indicate fraud or errors. This helps streamline the entire process, significantly reducing the risk of mistakes, fraud, and delays in invoice processing.
Sherry: From your vast experience in the industry, can you give us an example of how AI might handle a specific address-related issue, such as a change in the vendor’s remit-to address?
Ayo: Certainly. If a vendor changes the remit-to address on an invoice, AI can detect this change by comparing it to the previous data in the system. It can alert the accounts payables team to verify the change before processing the payment, preventing potential fraud and ensuring the payment is sent to the correct address. AI can also automate the update of this information across all relevant documents, maintaining consistency and preventing delays or errors in future transactions.
Sherry: How does AI help in managing international addresses, which often vary in format and standards?
Ayo: AI can be trained to recognize and adapt to different address formats by leveraging global databases. Machine learning algorithms can be trained on various address structures and learn as they process invoices from different jurisdictions. AI can convert these into standardized formats consistent with the company’s internal system, ensuring accurate invoice processing. Its ability to handle these variations reduces the risk of errors, especially in cross-border transactions, where accuracy is crucial for compliance and logistics.
Sherry: Finally, what advice would you give to companies or our viewers looking to enhance their address-handling processes in invoices and POs?
Ayo: My advice would be to invest in an AI-driven solution that can automate and standardize address handling in your invoice processing. Start by maintaining a robust database of vendor and company addresses. Then, AI tools will be used to monitor and validate these addresses continuously. It’s important to ensure that all relevant stakeholders, such as procurement and accounts payables teams, are aligned on the importance of accurate address management. This proactive approach can save time, reduce errors, mitigate risks, and prevent fraud. By using AI, companies can process transactions faster and more accurately, benefiting both vendors and internal operations.
Sherry: Thank you so much, Ayo, for sharing your insights on such a crucial topic. It’s clear from this conversation that accurate address management, supported by AI, is essential for smooth financial operations.
Ayo: Definitely. It’s always a pleasure speaking with you. Have a great rest of your day.
