By Rowan Lemley
It’s becoming evidently clearer that accounts payable departments, especially those handling lots of invoices, are struggling to cope with the complex processes they have to endure on a daily basis.
Not only do organizations handle thousands of invoices every month, these invoices are arriving in different formats, languages and tax and compliance regimes resulting in huge potential for human error.
The good news is that Finance bods are, at long last, starting to think that the Accounts Payable (AP) function is becoming more strategic and that, if improved, could actually have a positive impact on profitability.
The bad news is that ineffectiveness in the AP process still exists including human error and time consuming invoice scanning and data entry - both of which cost companies a great deal of money each year.
There is a clear need for automation in the AP process in many organizations, to not only bring real-time visibility and control but remove both payment and accounting errors. What’s most exciting is that electronic invoices play a key role in this automation. Remember, if your current AP process is constrained by paper invoices your costs will without doubt be higher, processes will be slower and your opportunities for cash management will be almost zero. Who wants that?
Here at Basware we’ve identified the four key steps an organization needs to consider before automating its invoice processing to ensure it achieves all the fantastic benefits it can bring:
• STEP 1: Audit your current process
Set the goals of a new process based on the bottlenecks of the current one and start the transformation from there
• STEP 2: Selection process
The solution selection process is crucial. Only consider a solution that supports the entire P2P process that is flexible enough to enable further automation in the future – including electronic catalogue management, e-ordering and e-invoice exchange with the supplier base
• STEP 3: Aim for a fully electronic AP process
Understand invoice automation and the benefits of invoice matching. Put in place a clear AP strategy aimed at increasing the volume of e-invoicing
• STEP 4: Make a plan to shift to electronic supplier collaboration
Getting suppliers to support your AP strategy and provide electronic invoices immediately eliminates the errors and time-consuming inquiries during the invoice handling process
Although an updated AP process saves both money and time, it can only take you to the first stage within a broader purchase-to-pay maturity curve. Introducing an e-procurement solution is the logical next step in the process.
The long-term benefits of automated processing are too compelling to ignore.
So what are you waiting for?