When businesses deploy all-in-one procure-to-pay systems with limited expertise and lack of focus on invoice processing automation, many opportunities are missed. Would you call an electrician to fix your plumbing?
Many procure-to-pay systems suffer from the following challenges:
- Incomplete or inaccurate invoice data
- High volume of invoice exceptions
- Limited access to data required to resolve exceptions/respond to supplier inquiries
- Slow availability of correct invoice data to downstream systems
- Strained relationships between procurement and accounts payable staff
All this can wipe out the return on investment from procure-to-pay automation. You get the idea.
What causes this automation fiasco? After all, what’s so hard about processing invoices?
That’s exactly what the software vendors that offer these all-in-one procurement systems want you to think.
Three reasons to consider separating payables automation from sourcing automation to eliminate friction from your procure-to-pay cycle:
- Electronic and paper invoice submission: Most all-in-one procure-to-pay systems require suppliers to submit invoices via an electronic invoicing network or an electronic invoicing portal. Electronic invoicing remains a tough sell with suppliers in the United States, in part because of the fees that many vendors of all-in-one systems require suppliers to pay to submit invoices. U.S. businesses receive 59 percent of their supplier invoices as paper or PDF e-mail attachment, per the Institute of Finance and Management’s (IOFM’s) 2018 Future of Accounts Payable Study. Electronic invoices represent only 17 percent of the invoices that U.S businesses receive from suppliers. Deploying an all-in-one procure-to-pay system that is optimized for electronic invoices means that businesses will have to maintain standalone processes and systems for the invoices they receive from suppliers via paper, PDF and fax.
- Intelligent data capture: Sixty percent of the cost of accounts payable is tied up in labor, per the American Productivity and Quality Center (APQC). And a lot of that labor is dedicated to manual data entry. Because all-in-one procure-to-pay systems are so dependent on electronic invoicing, they are not as well suited to capture and manage data from invoices that arrive as paper, an e-mail attachment or a fax.
- Exceptions resolution: Seventeen percent of all supplier invoices result in an exception, Ardent Partners reports. Resolving exceptions at many businesses requires back-and-forth e-mails and phone calls between accounts payable, stakeholders and suppliers, and logging into multiple systems to research purchases. As a result, it takes many businesses two to four weeks to resolve a single exception. Without complete invoice data and instant access to related information, all-in-one procure-to-pay systems can do little to speed this process.
Implementing and integrating best-of-breed solutions for procurement and accounts payable automation is a better approach to all-in-one procure-to-pay solutions.
Unlike all-in-one procure-to-pay systems, advanced invoice processing automation solutions provide the capabilities that businesses need to eliminate friction from their procure-to-pay lifecycle:
- An online portal to simplify document submission and tracking
- Intelligent data capture of highly accurate metadata from any paper or digital invoice
- Artificial intelligence-assisted exceptions resolution
- Digital workflows and alerts to reduce cycle times and prevent bottlenecks
- Integration with enterprise systems to accelerate the delivery of information downstream
- Dashboard reporting to increase operational efficiency and effectiveness
- A secure document repository to mitigate risks and strengthen regulatory compliance
Accounts payable leaders surveyed by IOFM say that automating the procure-to-pay lifecycle is a top priority. And rightfully so. Invoice automation cuts costs, reduces errors, speeds cycle times, ensures transparency, and strengthens relationships with cross-functional stakeholders and suppliers.
To find out more reasons why you should add an invoice-to-pay solution to your supply chain systems Contact IPS at 201.710.2417 to speak with a Solutions Consultant.