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A Key Challenge in Accounts Payable Process Automation: Part 1

Ken Neal
by Ken Neal
December 11, 2015
BPO Bulletin

Earlier this year I posted several columns discussing how to break through five key obstacles companies often face when automating their accounts payable (AP) process. In this and my next few posts, I will highlight an important point in the procure-to-pay (P2P) process where, even when newly installed P2P automation technology is functioning ideally, many organizations still face overcoming a big challenge in order to achieve desired business benefits. The point in the P2P process I refer to exists between the time suppliers submit invoices and buyers receive them. The challenge of this part of the process is that paper (or paper equivalent) invoices require time and money to convert them from paper (or other media such as PDF files) into ERP (enterprise resource planning)-formatted data.

Consider this scenario. An organization automates its P2P process with the latest cloud-based system. All key activities in the P2P workflow are automated including purchase order (PO) requisitioning, PO approval and order placement. Let’s add that a supplier portal with collaborative functionality is in place as well as PO-Flip® capabilities1. So far so good but now let’s point to a big challenge: suppliers are not using the supplier portal to submit the invoices. Instead, 80% of invoices are submitted via postal mail, email, fax, or PDFs attached to emails that require conversion into ERP-formatted data.

Therefore, while the procurement side of the P2P process is well controlled and functioning extremely well with excellent technology systems and automated workflows in place, the payment side of the equation (invoice processing) remains as inefficient as it was before the P2P system improvements were implemented.

In my next post, I’ll focus on how paper and email invoice volumes play a part in driving this inefficiency. In the meantime, feel free to visit the Accounts Payable Services page of our website for additional information on industry trends, case histories and more.


1. The PO-FLIP® technology pioneered by Ariba allows a buying organization to send a purchase order electronically to a selling organization and then allows the selling organization to PO-FLIP® the purchase order into an electronic invoice. The seller can then submit the “flipped” invoice back to the buyer which is an exact duplicate of the original purchase order. This innovation can help eliminate errors and speeds time to approval.

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