There is no denying the many benefits that straight through processing of invoices brings to Accounts Payable. However, an organizations ability to achieve straight-through processing is contingent first and foremost upon being able to receive invoices electronically. That paper-based invoices remain such a huge proportion (49% according to Ardent Partner’s State of Accounts Payable 2020 market research) of the average enterprise’s invoices may have more to do with problems relating to supplier enablement.
Suppliers have historically resisted changing to eInvoices for many reasons; a few of these reasons are a lack of technology implementation, costs borne by the supplier, and even an “opportunity cost” of learning a new invoicing system.
It goes without saying that many issues emanate when suppliers are creating and submitting, manual, paper-based invoices for approval. One option for addressing the ‘paper problem’ is to leverage scan and capture technology which is fine for some supplier invoices but not typically larger (many pages, high amount of important line level data) invoices such as utility and telecom bills. Scan and capture is really also an intermediary step on the road to true electronic invoicing as it does not address the issue of eliminating paper from the AP
Like scan and capture technologies, eInvoicing solutions focus for the most part on the initial phases of the invoicing process. The difference is that eInvoicing solutions start with an electronic invoice as opposed to digitizing a paper document. Electronic invoicing solutions maintain this format throughout the matching, validation, and approval process, eliminating the need for data entry or data capture. Submitting invoices electronically can also ensure that suppliers include required fields when submitting an invoice for processing. This can virtually eliminate missing information on an invoice that is required and needed by a buying organization to successfully process and pay an invoice.
Unfortunately, not all vendors are created equally when it comes to their willingness to change. Utility and telecom companies have been among the most challenging to work with from a billing perspective. They tend to have a reputation of being somewhat more difficult and rigid to work with and control than other vendors in a supply base. Compounding the problem is utility and telecom invoices are more frequent in nature (accounting for upwards of 15% – 20% of all invoices received in some organizations), onerous in size (number of pages), contain volumes of data required for proper G/L coding and cost allocations, and, are still mostly delivered in paper and PDF formats. Recognizing this need in the market, a few select solution providers are stepping in to fill this void. One such company is Urjanet who collects digitally captured invoice data, in machine-readable format, from thousands of utility and telecom service providers thus eliminating any and all paper and PDF invoice processing from these vendors.
Electronic invoicing makes perfect sense from a business perspective, something that top performing organizations have long recognized. It is no surprise that in Ardent’s State of Accounts Payable 2020, Best-in-Class AP departments separate themselves from their peers through their high adoption rates of eInvoicing solutions (68% vs. 33%). With all of the work from home mandates we have encountered this year, the problem with paper invoices has never been more apparent. Hopefully, this will be the impetus for more and more organizations to finally kick the paper habit and start to realize the benefits that come from automating the accounts payable function.
