A 2019 Payables Insight Report notes that 37% of all invoices received by businesses of all sizes still come from paper. Even large enterprises still receive 22% of invoices as paper. The report also highlighted that small and medium enterprises (SMEs) perform manual data entry for 86% of their invoices.
These numbers identify clear automation opportunities in invoice processing. Before 2020, convincing executive management of the value proposition may have been challenging. The recent pandemic put more focus on these manual processes.
Manual Processes had a Real Impact During the Pandemic
For a typical accounts payable clerk in a manual enterprise, the process is fairly straightforward. The clerk opens the mail, which may include invoices to be processed. Those invoices are manually entered into the accounting system, stamped as” received”, and prepared for payment. Later in the time period, the accounts payable clerk performs the check run, printing checks, having them signed by the CFO, for example, putting them into envelopes and mailing them.
Many businesses deferred automating these processes, many assuming that someone would always be in the office to perform the work. But, how can invoices be manually processed when the office is closed?
The accounts payable team found themselves in a difficult position. Either visit the office and process the invoices and send payments, or risk missing payments, losing any prepay discounts, and potentially being cut off by suppliers until payment is received. For most accounts payable teams, the choice was simple, and a member or two would visit the office perhaps once a week to keep the paper moving.
Offices are reopening, and companies are going back to work. The issues with manual invoice processing have reached the corner office. Electronic invoice processing and payment are becoming a strategic necessity.
Digital Processing Is Becoming a Necessity
According to a recent Gartner Report, “Payment Acceptance Will Never Be the Same After the COVID-19 Pandemic”, “By 2023, five countries will have launched digitization initiatives aimed at eliminating cash from circulation.”
As executive teams being digitization initiatives driven by the challenges of the recent pandemic, they will find significant value in payment automation beyond simply allowing accounts payable to work remotely.
Automating the accounts payable process from invoice receipt to invoice payment deliver quantifiable value in several areas:
- Improved Resource Utilization -- Automated processes allow the accounts payable team to act more strategic, looking for opportunities to reduce costs and uncover revenue
- Error/Fraud Reduction -- Manual handling in any process is open to mistakes, and potential fraud. Matching and approvals that are common with automation drive down the risk of human error or fraudulent payments.
- Monetization Opportunities -- Automating the payments process can deliver rebates and other revenue opportunities
Moving from a highly manual process to a fully automated invoice processing and payment can seem daunting. Businesses that have taken the digitization journey will generally start by addressing a specific area of the accounts payable process. This offers several benefits:
- Delivers a “quick win” -- Rather than a broad, multi-year project with a single go-live date, automating in steps a few months at a time allows for a shorter time to value, and validates the project is worth continuing.
- Engages the User Community -- Making the transition from manual to automated processing can be a culture shock to the AP users, as well as other stakeholders. By transitioning in parts, the users are able to “buy-in” to the new process.
- Allows for Adaptation -- By implementing in pieces, the team can assess and determine where opportunities to improve areas like training or delivery may be. Those improvements can be leveraged in the next phase.
BuyerQuest Can Help
The BuyerQuest platform is designed to be an automated, user-friendly procure-to-pay technology. With our recent addition of BuyerQuest Pay, the BuyerQuest platform creates a frictionless invoice to payment experience for direct and indirect orders in a single technology.
With multiple invoice creation methods, purchase order and receipt matching, approvals workflow and invoice payment, BuyerQuest makes the invoice to payment process seamless. All remittance tracking and transaction information reside in BuyerQuest for ease of data auditing.
Businesses need to prepare for the next work from home scenario. Digital processing will be critical for several departments, including invoice processing and payment. BuyerQuest delivers a user-friendly, seamless invoice to payment user experience with auditing and controls.