What is Invoice Automation?

Invoicing
by Steve Carter

Why is Invoice Automation a game changer?

Using Invoice automation 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 effective, transparent Accounts Payable processes. 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.

However, there are a number of challenges that need to be addressed, to turn your AP team into top performers with online invoice payment processing.

What Are The Barriers To Invoice Processing Automation?

Before you can unlock the true potential of your Invoice-to-Pay journey, it is important to identify and remove the barriers to achieving top performance. For this, a leading analyst group, Gartner has identified that Accounts Payable must overcome a number of challenges with their AP automation 

These fall broadly into three main areas: 

1.Focus on Supplier Enablement:

Suppliers have vastly different capabilities when it comes to generating invoices that support AP invoice automation. This variability creates higher processing expenses, disconnected journeys, and lower automated invoice rates.

2. What is an Invoice Payment?

Invoice automation projects frequently only address document digitization, whilst it is the matching issues that introduce higher costs. This incomplete scope reduces the potential ROI and reintroduces problems that would be caught by manual invoice processing.

3. Supply Chain Visibility

Organizations cannot improve invoice match rates when there is no visibility into the root causes of match failures. As a result, process improvement and error elimination cannot occur without visibility and correction.

Challenge 1: How to Address Supplier Enablement?

It is not uncommon for organizations to  spend on supplier enablement without achieving a huge amount. This falls apart basically if the tool is too complicated – too many buttons to push, too many screens.  

Automate invoice processing cannot happen without supplier enablement and supplier onboarding 

Step 1: Start with the Supplier Invoice or Payment Inquiry:

The first time a supplier’s credit control team contacts your AP team, they should simply email a link to the Supplier Portal with your invoice processing platform. With this the credit controller can sign-in and see the status of every invoice, importantly this is in real-time without a lag or new T&C’s. Once the supplier has signed in they stop calling you as all the information they need is on screen and you have a new email contact in the system.

Step 2: New Supplier: even in the world of no-Pay no-PO it’s possible to get an invoice from an unknown or new supplier, especially at the tail end of your spend. Therefore, when it happens our invoice processing software provides a quick and simple check to confirm the supplier and instantly update your master data, and also creates a supplier portal account for their credit controllers.

Master Data Update: within the Ivalua Supplier Portal the credit controllers can update their view of your master data, and confirm changes. With this, and the right process, finally you can keep your master data in sync with the supplier, something the Hackett Group estimates could save you 50% of your costs in this area.   

Learn more about the amazing capabilities of the Invoice Hub here.

Challenge 2: How To Automate Invoice Payment Processing?

Coworkers analyzing the contents of a shared computer monitor

For most businesses increasing invoice processing efficiency to 70% across 60,000 suppliers would be a stretch target.  However, Credit Agricole achieved this through digital processing of invoices. 

Using invoicing software , they have unlocked the power of accounts payment and hit amazing levels of straight-through-processing. They have accomplished this by using smart matching across orders, contracts, and receipts; together with one-click workflows that manage line level allocations and tax treatment automatically.

By removing the overhead of supplier queries with real-time supplier updates, the AP team can focus on innovation and real exceptions. The key to these performance levels is the embedded smart matching that uses supplier master data, orders, receipts, even contracts to automate the process for payment of invoices.

What about Exceptions?

Exceptions can then be handled with one-click approval for invoices, or by simply appending the missing PO number, to complete the auto-match. With line level multi-tax treatment and budget allocation templates that reduce effort AP automation rates can reach way above 70%.

However, the real power of invoicing software is that all this matching is also available within the supplier portal linked to the Invoice Hub. That is true innovation and a level of digital invoicing transformation that is not available in every tool

Now selected suppliers can upload a PDF invoice in the free portal, check all the content is correct, append that missing PO or tag the buyer, before matching the invoice to the receipt or order. Only once all the invoice meets the tolerance policy for automation will it be accepted.

Challenge 3: How To Continuously Tune and Improve?

Person giving a procurement presentation

Having the ability to continuously improve (CI) a process is critical to achieving a return on investment and should be at the heart of all cloud technology. Without this, organizations cannot be agile and without analytical data, continuous change is impossible.

This is why Ivalua provides the dashboard and performance intelligence necessary to evolve, adapt and improve your unique Invoice-to-Pay journey as standard. Unlike eInvoicing Networks, or prescriptive services, that are locked, with Ivalua you are in total control of the Invoice-to-Pay journey.

Once you have our quick start journey in place, the AP team can create new templates and processing rules, the workflow can be extended or adapted without breaking the system. 

Learn more about the power of CI in Credit Agricole.

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.

The Components that remove the barriers within Invoice Automation Journey

To learn more about Invoice to Pay from Ivalua ask for a no obligation demo today.

demo
Steve Carter Headshot
Author

Steve Carter

Senior Product Marketing Manager

For almost 30 years, Steve has worked as a Senior Product owner and Business Director in organizations selling procurement, Accounts Payable and Billing solutions into the Public and Private sectors. This involved designing and delivering products that support the Source to Pay and Order to Cash journeys for both Buyers and Suppliers. Steve’s last role was in the Crown Commercial Service working with Government Digital Services (GDS) to design the next generation of Public Sector cloud catalogue and marketplaces. This covered specifying market requirements, service design, end-to-end market engagement and sitting on the UK P2P central government working group. 

Over the years Steve has been involved in a vast number of invoice automation and billing projects and has seen technology come and go; from early OCR to the establishment of the e-Invoicing Networks, to new Self-service capabilities. When this is coupled with his all round knowledge of the systems and the processes used within procurement, Steve has a unique perspective on how we should be transforming procurement and more specifically Invoice to Pay in today’s Digital age. Outside of working life, he is a published author and 17th Century historian.

demo days cta

You May Also Like

Invoicing

Ivalua Payments Part II: Using Payments to Become the Customer of Choice Read More

Ready to Realize the Possibilities?

Contact Sales