More than ever, businesses across industries are discovering that the result of neglecting improvements in the invoicing and payments function of the accounts payable department translates to a loss in time, revenue, and efficiency.
A mixture of system and human failures conspires to leave invoices unprocessed, unapproved, and unpaid.
Executives should be laying the groundwork now for a strategic finance plan in 2018 and beyond that includes a cloud-based, end-to-end payables solution. The benefits are apparent and documented. With e-invoicing alone, the average cost to process a single invoice is 81% lower than the competition, while the average time to process a single invoice is 77% faster, according to “State of ePayables 2016: Eyes on the Prize” research study.
When AP undertakes a centralized e-invoicing process that links straight through to payments, it’s a game-changer. Executives gain the ability to not only analyze data and cash flow in a timely manner, but to make actionable decisions about financial management that improve the bottom line and support growth in the future.
Yet, even in 2017, payables automation is still viewed warily by many companies. According to the Institute of Finance & Management (IOFM), nearly one-quarter of companies cite too many competing projects as the primary obstacle to automating the P2P process. Another 17% claim a lack of financial funding, while 12% have limited IT resources. Yet, the data does not bear out those fears.
Cloud-based processing from invoice to payment enables faster deployment, with little IT intervention, and low to zero start-up costs. Additionally, electronic invoice payment processes cost 60 percent less on average than their paper-based counterparts, according to the Hackett Group.
The right end-to-end payables automation solution will deliver a positive ROI in the first year. Expected return at the end of the first year should be a portion of your spend and should be a reduction in your labor cost as a function of your organization size. Executives will find strategic returns in a centralized, automated solution that is not disruptive after the initial set-up. As far as executive-level concerns that the company has very specific needs that pose “different” e-invoicing requirements, that is not usually the case. Agile solutions can be adapted to fit any culture.
However, a common mistake companies make when trying to improve financial processes is to adopt the easiest solution rather than one that adds value for customers. A successful strategic finance plan starts with a diagnosis. As a first step, define an action plan for implementing e-invoicing and e-payments.
A seasoned and comprehensive AP solutions provider will be able to assist in each step of a diagnosis, so that your company gets a solution that is tailored to its needs. The reason for the strategic importance of e-invoicing, like all aspects of a fully automated procure-to-pay system, is that it breaks down the barriers between procurement and accounts payable and accounts receivable. E-invoicing and e-payments together can provide businesses with 100% visibility into cash flow for 100 percent spend control.
The most effective automation solution providers will sit in the middle of a complicated supply chain and provide scalability, visibility, and savings. Companies of any size reap the rewards of a provider with an established network. Aggregators bring thousands of options to the mix with stable pricing and economies of scale. Again, when you choose the right provider, your ROI should be positive at the end of first year. You should get a positive return, or you’re looking at the wrong solution.