Nirvana. Paradise. Shangri-La.
For accounts payable practitioners, this idyllic state is when invoices flow electronically through their department – from a supplier’s billing system, to the buyer’s enterprise resource planning (ERP) application – without human operators having to touch them.
But the reality for most accounts payable departments is the furthest thing from blissful.
Even invoices that are received electronically – such as via an online supplier portal, e-mail or file transfer upload (FTP) upload – often require manual handling in many accounts payable departments.The typical accounts payable department posts less than one-quarter of all the supplier invoices it receives straight-through, without human operator intervention. That’s according to the Ardent Partners’ 2019 State of ePayables Report.
Consider invoices that arrive via e-mail. Many accounts payable departments print the invoices they receive from suppliers via e-mail and process them as paper. Some accounts payable departments provide their operators with a second monitor on their desks; operators then view e-mailed invoices on one monitor and manually key the data into the buyer’s ERP application on the second monitor.
All these manual processes contribute to sky-high cost of invoice processing and to friction across the financial supply chain.
How manual invoice processing impacts supplier payments
Manual invoice processes also negatively impact a business’ payments to suppliers:
- payments are more likely to be delayed in a manual invoice processing environment
- payments are more likely to be incorrect in a manual invoice processing environment
- there’s less chance that buyers can take advantage of early payment discount opportunities in a manual invoice processing environment
- finance decision makers have less visibility into working capital and corporate spending in a manual invoice processing environment
These challenges come at a time when businesses are eager for ways to optimize their payments to suppliers.CFOs and other finance leaders recognize that improving how a business pays suppliers can deliver strategic benefits such as:
- Lower operational costs
- More opportunities to capture early payment discounts, which can lower the cost of goods purchased
- Cash-back rebates on payments made via card, which can transform accounts payable into a profit center
- Extended Day’s Payable Outstanding (or DPO), which measures the average amount of time it takes a business to pay its suppliers
- Less chance of fraud
All these benefits of optimizing payments contribute to revenue growth and profitability – the things that CFOs and other business leaders care about most.
So, if a business wants to optimize its payments to suppliers, it needs to find ways to increase the percentage of invoices that it processes straight-through, without human operator intervention.
And that’s where IPS Productivity Wrx℠ comes in.
Accounts payable robots (or “bots”) log into an e-mail box, FTP site or online supplier portal to retrieve invoices for processing. Suppliers also can use an online portal built into the IPS Productivity Wrx℠ platform to submit invoices electronically or to “flip” purchase orders (POs) into electronic invoices. The result is that all payables processes are centralized onto a single platform.
IPS Productivity Wrx℠ uses optical character recognition (OCR), e-mail invoice extraction, robotic process automation (RPA), machine learning (MA) and proprietary technology to extract and verify data from each invoice according to pre-defined business rules. Invoice data is guaranteed 99.95% accurate and then matched against a PO. Matched invoices are seamlessly uploaded to any ERP application, including SAP, Oracle, PeopleSoft and Infor. IPS Productivity Wrx℠ also integrates with supplier billing systems to deliver detailed remittance data.
Unmatched invoices, or those without a PO, are digitally routed for approval based on configurable business rules. If any data required for approval is missing from an invoice (such as a PO number), IPS Productivity Wrx℠ sends an e-mail to the supplier’s billing department. The supplier then clicks a link, inputs the required information and re-submits the invoice. The data input by the supplier is validated in real-time, eliminating the possibility of back-and-forth e-mails.
The result is less friction across the accounts payable lifecycle – including payments to suppliers.
If your business wants to optimize its payments to suppliers, start by optimizing the way you process invoices – regardless of whether they arrive via paper, e-mail, FTP upload or supplier portal.