A Key Challenge in Accounts Payable Process Automation: Part 2
by Ken Neal
February 12, 2016
The pace of implementing tools such as supplier portals that enable suppliers to submit invoices electronically has outpaced supplier adoption. Looking at annual AP surveys, we see supplier portal, e-commerce, and eInvoice tool implementation rates in the 20% range. At the same time, we see paper and email invoice volume decreasing by only 2-3% year over year. For organizations that spent the resources to implement tools like a supplier portal there is nothing more disappointing than discovering that the suppliers are not using them.
There is no guarantee that suppliers will submit invoices electronically through the P2P system the buyer has made available to its suppliers even when there is no cost to the supplier. Most organizations have not mastered the process of enrolling, convincing, or forcing suppliers to adopt eInvoice submittal – except perhaps the very few large buyers, such as the major retail chains that have the power to force suppliers. Some suppliers just do not have the resources or technology to interface with the buyer. For some, it is more efficient or cost effective to use their existing methods of sending the invoice than to re-tool or to change processes. Hence electronic invoice submittal is not growing as fast as it should. The reality is in the US about 75% to 85% of invoices are still paper-based or paper equivalent, which means they require manual conversion. We see this in many studies including our recent study conducted with the Institute of Financial Management.1
In my next post, I'll focus on obstacles to e-Invoice adoption. 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. Canon Business Process Services and the Institute of Financial Management (2014),2014 Accounts Payable Optimization Survey