In Procurement and Financial Operations, there is arguably no greater priority and focus at the moment than the focus on digital transformation.
The accounts payable and specifically the invoicing process is no exception. Not only is digital transformation in invoicing driven by the great advantages gained in both cost and resource efficiencies by automating processes, but also has the added pressure of being fast tracked to become a necessity due to global government mandates and regulations that need to be adhered to. Let’s face it, paper isn’t cutting it anymore.
As a matter of fact, according to a 2018 E&Y survey, there are already regulations in place across more than 55 countries worldwide related to electronic invoicing.
However, surprisingly, according to the Ardent Partners “State of ePayables 2018” report, still 55% of invoices are being processed manually today (largely skewed to North America). And AP staff spend one quarter (24%) of their time on invoice exceptions.
So organizations really do have their work cut out for them to make the transition to eInvoicing from manual or semi-automated processes, in order to meet the many different global mandates that have been set to take effect by end of 2018/beginning of 2019.
In Europe, for example, all EU governments must have the capability to receive electronic invoices by Nov. 27, 2018. And Spain, Italy, Belgium, Germany, Portugal and France have already published national Business to Government (B2G) legislation on eInvoicing.
In the US, mandate dictates that federal regulators will be required to pay suppliers via eInvoice by the end of the fiscal year (FY) 2018. This means the 19 million invoices government agencies pay every year, will have to be electronic. At present, about 12 million of the 19 million of them (40 percent) are received in the form of paper. According to the Office of Management and Budget, eInvoicing could also yield up to $260 million in savings for the government every year.
However, this is not only about the government, there are still many, many companies that struggle with inefficient and delayed processes around accounts payables. Rather than viewing these mandates as a negative strongarm forcing them into invoicing automation, in reality, these mandates should be viewed as a positive, for organizations to be able to increase the prioritization of invoice automation (and the broader procure-to-pay process), which in turn will result in significant gains and benefits once implemented.
Many Ivalua customers have seen significant benefits from automating the complete procure-to-pay process. Similarly, throughout various industries Best in class organizations are already marching strides ahead of their peers, demonstrating significant resource and cost efficiencies. The primary source of these efficiencies can be directly linked to their use of electronic invoicing capabilities.
Some eInvoicing capabilities adopted by best-in-class organizations
- Two or three-way matching
- Processing invoices straight-through
- Automatically routing invoices for approval
- Creating invoices directly from contracts
Key benefits to electronic invoicing:
- Cost of processing an invoice: $2 for electronic invoice vs $14 for paper invoice
- Time to process an invoice: 3 days for electronic invoices vs 15 days for paper invoices
- Volumes processed: 1 FTE can process 90,000 electronic invoices per year vs just 6,000 paper invoices per year
- Control over cashflow and increase in working capital management
- Improved supplier relationships
- Decrease the organization’s ecological footprint
Learn how Select Medical achieved touchless processing of 360,000 invoices and how Maxim Healthcare achieved huge benefits and rapid deployment of P2P in only 8 weeks.