Editor Notes: This post was originally published in November 2017 and has been updated for accuracy and comprehensiveness, last updated October 2020.
According to a poll by IOFM, only 9% of accounts payable (AP) leaders state their department is fully automated and a startling 14% of accounts payable departments process invoices and pay suppliers in a completely manual environment. Why? One reason is that the solution options can be overwhelming. In this blog post, we’ll help you navigate this undertaking with 7 essential criteria for e-invoicing.
During uncertain times, keeping cash flowing is the most important part keeping your business moving and active—and AP Automation is key to doing just that.
Taking slow, tedious, manual, paper-based processes out of the AP cycle and digitizing instead provides compelling benefits for the entire process. Submitting, processing, and paying invoices electronically means less paper, decreased handling of physical documents, and fewer manual interventions. Additionally, the automation of associated workflows such as routing, coding, matching, and approvals will realize similar benefits. So how do you go about deciding which e-invoicing solution is best for your organization so that you can realize all these benefits?
1. Research e-invoicing options that automate both the sending and receiving of invoices
While many companies are currently doing one or the other (typically sending), a holistic approach will deliver the best ROI and fastest payback period. An integrated system that allows you to fully manage your e-invoicing sending and receiving will increase efficiency, cost savings, and scalability.
2. Identify an e-invoicing solution that operates over a large, open network
An open global network allows you to send and receive e-invoices to and from any company through a single connection – and should be free of charge to your suppliers. This means all your suppliers can easily join the network and immediately start sending you invoices that your solution then converts to true e-invoices. Plus, with a large, open network that connects thousands of companies, you’ll be able to connect with more suppliers and buyers easily.
3. Ask if the e-invoicing solution supports ALL invoice formats
Don’t make your suppliers change how they operate – instead look for a solution that converts any invoice format to a true e-invoice. Make sure that you choose a solution that can accept ALL invoices types (paper, electronic, EDI/XML, PDF, etc. – covering direct, indirect, PO, Non-PO spending) and convert these documents into true e-invoices (i.e.- invoices with structured data formatting for machine reading without human intervention).
For example, make sure large suppliers can communicate in their preferred electronic language (EDI/XML). Help smaller suppliers go electronic by utilizing a tool to convert the PDF invoice they send you today to electronic data (without using old OCR technology). You also may be required by your customers to submit invoices in a particular format, so you’ll need the software to support a variety of formats for that reason as well. By ensuring the e-invoicing solution can handle all invoice formats, you will be able to process 100% of your invoices in the system to collect all your invoice data and gain true spend visibility.
4. Determine if you need support for multiple currencies and global regulations
If your company operates in different geographical regions, or if you purchase from international suppliers, you’ll need to make sure that your invoices comply with the different tax and regulatory laws in these regions. Your e-invoicing software should relieve you of the complexity of these aspects by automatically ensuring you’re in compliance.
5. Find out if the e-invoicing software can seamlessly integrate with existing systems
Integration in a multi-ERP environment is a challenge, and many e-invoicing software systems aren’t made for complex environments. If you need the software to integrate with specific business systems, you’ll want to make sure that a seamless and safe integration is guaranteed by the provider.
6. Ask about e-invoice archiving capabilities
There are many good reasons to move away from paper invoice archiving into electronic invoice archiving, such as reducing the space and resources needed to store invoices, maximizing data security and integrity and having an immediate, online access to any invoice you need. The results are improved efficiency and significant cost savings for most companies. It’s also a critical aspect of compliance for global organizations. Ensure you store the right documents for the right amount of time, purge them once that time period is up and have the ability to quickly access your documents to streamline processes and make audits easier.
7. Dig into the analytics capabilities of the e-invoicing solution
What information does your leadership team need, on what schedule? Business intelligence is essential for smart decision-making that drives performance. Your e-invoicing software should provide integrated analytics to deliver actionable insights with graphical dashboards for trend analysis and drill-down capabilities for transaction-level detail. Valuable insights can be derived from the data so make sure the e-invoicing solution you choose can deliver.
When you have specific productivity objectives you want to accomplish, the last thing you want is to spend time and money on e-invoicing software that, in the end, doesn’t allow you to reach your goals and doesn’t prepare you for the future. It can be challenging to evaluate different solutions, and each company will have unique needs. But looking for these seven capabilities will give you peace of mind that you know what’s essential.
Choosing e-invoicing software – 7 tips:
Research e-invoicing options that automate both the sending and receiving of invoices
Identify an e-invoicing solution that operates over a large, open network
Ask if the e-invoicing solution supports ALL invoice formats
Determine if you need support for multiple currencies and global regulations
Find out if the e-invoicing software can seamlessly integrate with existing systems
Ask about e-invoice archiving capabilities
Dig into the analytics capabilities of the e-invoicing solution
Want to learn more about how to ensure success with e-invoicing? Download our e-book, 6 Steps to e-Invoicing Success.