Using Invoice-to-Pay to create a top performing Accounts Payable Team.
The performance of your Accounts Payable department can have a significant impact on the organization. Recent trends have increased the strategic importance of an effective, transparent Invoice-to-Pay process, managed by AP. Increased outsourcing has made businesses increasingly dependent on suppliers to drive innovation.
A recent study by Forrester found that the single greatest factor in increasing a supplier’s willingness to collaborate with and share innovations with a customer was timeliness of and visibility into payments. The Covid-19 pandemic has increased the importance of effective cash management, of which Invoice-to-Pay is a key lever.
What is Invoice-to-Pay?
Invoice to Pay is the process of receiving, processing and then paying a supplier invoice. However, it is easy to forget that an Invoice is simply a payment request, and therefore it’s the job of technology to make this easy, fast and more efficient – for the Supplier and the Accounts Payable team.
All too often, Invoice-to-Pay is seen as an isolated process, sitting on its own at the end of a procurement journey. This activity starts with a need, moves through selecting a supplier, contracting and/or ordering the items, then the goods or services are received, before finally an invoice is sent by the supplier.
At each step of this journey, evidence is gathered that ensures that when the Invoice arrives, the AP can validate it for payment. Therefore, by using the supplier’s desire for payment, and good quality data, top performing organizations can achieve high levels of straight-through-processing and automation.
Invoice-to-Pay is therefore an integral part of the whole procurement process, and typically includes the following tasks:
Rather than the traditional silo’s of Invoice processing, budget allocation and payments, ensuring AP is not an isolated process but part of the whole procurement journey is important. This is because at each step; data is gathered, suppliers are onboarded, and deliveries are accepted.
If this is done in a coordinated way, Invoice to Pay is more powerful. The result of bringing these three steps together with data from the whole procurement journey is a seamless and almost touchless workflow that transforms accounts payable. This makes paying an invoice faster, simpler and on time.
To learn more about the value of Invoice-to-Pay, download our white paper.
What Are The Benefits of Invoice-to-Pay?
A recent Hackett report identified that top-performing organisations, with high levels of Accounts Payable automation, could save up to 54% on invoice processing costs and only had a third of the internal employees focused on AP. But there are more savings possible with self-service tools for the supplier that can save up to 50% on master data management costs.
By transforming the accounts payable process businesses can deliver indisputable value in the form of reduced transaction costs, traceability, and increased control over their payables timing. However, top-performing organisations did not only focus on eInvoicing or invoice management, they took a multifaceted approach.
This included centralized invoice receipt, digitization of all transactions, and the optimization of a single Invoice to Pay journey across the whole organization. For example, Invoice to Pay has enabled Select Medical to achieve 96% straight-through-processing of payment requests.
To learn about the benefits of Invoice-to-Pay download the Hackett report today.
How does Invoice to Pay Work?
To jump from just invoice processing to becoming a top performer requires a break from analog thinking. AP teams need to embrace digital data and think end-to-end. This is because controlling the flow of invoices into the Accounts Payable team has become increasingly complex to manage.
In part, this is due to the challenge of handling high volumes of supplier invoices being merged with the new digital Government Networks. The solution is to follow the top performers and focus on supplier enablement, smart matching and introduce the agile methodology of continuous improvement.
Gartner calls this level of automation ‘Advanced Accounts Payable Invoice Automation’ or APIA and we have built our solution around this concept while maintaining our plug and play approach to support our customer needs by offering modules to support each area of the journey. However, we have built an of out-of-the-box workflow which support the whole APIA methodology:
Our Invoice to Pay journey starts with the invoice being acquired from the supplier, in whatever format they can send, from an easy PDF email, to a fully electronic invoice. The moment the invoice arrives in the Invoice Hub, Ivalua will check the supplier and validate its content is tax compliant before further processing.
At this point our advanced workflow even allows you to set self-validation rules for suppliers. This unique capability helps the supplier check their invoice content from email, an uploaded copy, or one created in the portal. Once validated our embedded AI engine will automatically match the invoice to a contract, purchase order, or receipt before confirming tax treatment and budget allocations.
If at any stage buyer interaction is required, this is provided via a low touch email or mobile friendly interface. To reduce the impact of Supplier inquiries, they have visibility of the invoice status and can even mitigate issues before they become a costly dispute. If any invoice is found wanting, it will be parked or rejected. If the supplier is unknown a new vendor workflow can be started, and the supplier is given a free self-service portal account – without a third-party network getting in the way.
Invoice to Pay from Ivalua transforms the accounts payable process and can deliver indisputable value in the form of reduced transaction costs, traceability, and increased control over payment timing. This is supported by data from The Hackett Group’s most recent Purchase-to-Pay Performance Study that flags organisations with high levels of AP automation as saving 54% on invoice processing costs and have a third fewer internal employees processing Invoices.
To learn more about Invoice to Pay from Ivalua ask for a no obligation demo today ask for a demo.
Invoice-to-Pay from Ivalua
Ivalua has been recognized as best-in-breed across the Source to Pay by the leading analysts, so once you have this level of advanced accounts payable automation, your focus can switch to adding capabilities that are designed to deliver additional value, such as mitigating invoice fraud and compliance, plus increasing working capital value from the financial supply chain – welcome to Ivalua Invoice-to-Pay.
