CloudX Blog

Is eInvoicing Superior To Accounts Payable Automation?

Posted by Chris Cosgrove

Mar 9, 2017 2:06:48 PM

All Gladiators love accounts payable automation

Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.  - Marcus Aurelius


If you don’t know who Marcus Aurelius is, we don’t blame you.  He lived a while back, like just about 2,000 years ago, but if you’ve seen Gladiator, at least you’ve seen Hollywood’s take on the man.  Not bad if I might add, and one that was at a minimum entertaining and eye opening to say the least.  But what does this have to do with eInvoicing and Accounts Payable automation…?  Well nothing, and everything, if you take the quote above in context.  


In today’s crowded Accounts Payable process improvement market there are numerous opinions and approaches vying for attention and adoption.  Each stands on its own merits, but ultimately metrics around adoption tend to tell a clear picture.  For some reason, eInvoicing, despite its advanced features and efficiency still lags far behindtraditional AP automation even after years of promotion.  According to Invoice Receipt Management by Paystream Advisors in 2015, eInvoicing adoption is lagging significantly behind traditional front end OCR capture processing scenarios.

Accounts Payable automation stats!



While the chart suggests that eInvoicing as a trend could increase in the future, it’s at a statistically similar pace to front-end imaging and OCR capture.  We believe that it is unlikely for this trend to materialize because people are abhorrent to change.  Essentially eInvoicing, despite its technical advantages, is a complete bear to deploy.  It is expensive, time consuming, and an enigma to many suppliers who will need to interact with it.  Left to their own devices, people are averse to change.  That’s why in the countries where this methodology has flourished, it has always taken some kind of centralized governance initiative by the federal government to force adoption.  Unfortunately, for those in the west, this is not going to happen any time soon, especially in the wake of the deregulation trends of the Trump administration.

 

This is not inherently a bad thing either.


From our perspective Accounts Payable automation leveraging dynamic front-end invoice capture and data validation represents the most flexible way to ingest invoices of all formats and get high rates of data accuracy and efficient throughput.  Once you’ve got invoices in and converted to data, you have to harness intelligent workflows, and reverse lookup matching capabilities to get rid of manual process, whether traditional approval processes or all the manual matching that has to occur for PO based invoices.  Then you’ve got dynamic data release to the back end system where the transactions will reside and ultimately invoke payment.  Now, we get that the approach has been around for some time and isn’t necessarily the newest tech on the block, but why fix what isn’t broken?


In fact, if you’re savvy and you start connecting an automated ePayments approach, you can monetize the process quite a bit, leverage the cash returns to fund automation, improve and optimize the process for more gains (ie. early payment discount capture) and achieve maximum process value.


The key from our perspective is harnessing the delivery infrastructure in the cloud instead of the older method of deploying everything onsite.  Fewer businesses today are interested in maintaining additional systems in house on servers because it requires capital investment and administration, which just ties up human resources and cash.


So, in wrapping it up, it’s not that eInvoicing is inferior to Accounts Payable automation, it’s just that it has so many more barriers to adoption and nothing pushing it forward from a mandate standpoint.  In other words, if you can streamline your process by upwards of 80%, monetize it and flip it from a cost center to a profit center that is tied in tightly to your Treasury function, have immediate visibility to anything in your system, and do all this without having to solicit your vendor base and force your AP team into a quasi sales/evangelism role, why wouldn’t you?

 

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Topics: eInvoicing, Accounts Payable Automation, Accounts Payable Process, ap automation, accounts payable manager

The Biggest Problems Accounts Payable Process Managers Face

Posted by Chris Cosgrove

Nov 16, 2015 6:30:00 AM

The biggest issues accounts payable process manager face in a nutshell!

 

 

Leading is never an easy thing, perhaps now more so than ever.  

 

Decisions, right, wrong, or indifferent are made at increasingly rapid rates, and the backlash to those are visceral, real, and proliferated across all manner of social media...at least in the public light.

 

What goes on behind closed doors within companies is certainly somewhat murkier, but is one of the things that can make or break a corporate culture.  This is just one of the reasons that being a leader (or Manager, though not all managers are leaders I’m sorry to say) comes with a price tag.  Basically, you are on the firing line from an executive management perspective if you own a certain process in your organization, and you’re faced with the natural pressures that come from having to achieve certain goals and benchmarks within your subject area.  The accounts payable process is no different.

 

Here, in our humble opinion, are the three biggest problems that Accounts Payable process managers face today!



The lack of tools necessary to transform a process.

 

Now this is no shock for those who read our accounts payable process improvement posts or anyone who is in tune with leading market research.  All told, probably less than 40% of the corporate B2B market has actually done something meaningful about improving their accounts payable process.  Why?  Because it’s messy, costly, time consuming, challenging, and difficult to prioritize among other competing interests in the corporate landscape (from a cost justification standpoint).  Therefore, because fewer Accounts payable process managers have the tools necessary to undertake process transformation, it’s impossible for their respective organizations to realize any of the tangible impacts.



Lack of executive sponsorship as it pertains to process improvement.

 

Again, executives are hard-pressed for time when it comes to innovating and leading their businesses forward.  As such, they tend to focus on top-line initiatives.  People’s attention tend to be drawn to the new and exciting, meaning that new products, markets, emerging technologies, and other hopeful areas obfuscate the attention of said executives from looking at internal areas of improvement.  In many cases the dollars for the tools to improve a business are allocated to support the top-line growth or innovation initiatives.  Sadly, this leads to the detrement of the business of the whole and in a sense leaves the accounts payable process manager (in this case) in the lurch, because they can’t typically exercise the authority required to spearhead an ap process initiative (costs too high, human resources required, sponsorship across the organization is lacking, etc, etc.).  If this epitomizes your experience in tendering ap process improvement initiatives, then we have some guidance we’d like to give you that you can access here!

 

People Pressure

 

This is broad and may seem generic, but the Accounts Payable process management role is really a thankless one that is perpetually under the gun from outside and inside pressure.  Treasury and Finance executives want to know what their payables exposure is at any given time, which is a guess-timation process for most business because that data is generally not available dynamically, and as such most businesses tend to look historically to find their answer, which is not optimal.  Vendors increase pressure on AP managers as invoices do, don’t, or need to get paid for a variety of reasons.  These dealings can strain relations with procurement personnel as well as departmental approvers who may have to provide say-so before an invoice can be coded, approved, and paid.  Finally, there’s AP staff that create pressure.  AP staff, in a non-automated environment often have mundane roles due to the nature of what is required to advance an invoice transaction (data entry, manual validation, troubleshooting, etc.).  This, along with managing performance standards, leads to a scenario that often has high turnover rates in this specific field of endeavor, therefore, the AP manager is essentially taking heat from all sides.



Many of these issues can be improved or eliminated through an intelligent automation approach as well as by embracing a mindset of total process transformation and value creation.  In fact, we’ve seen scenarios where sharp AP Managers and Finance Directors have leveraged a broken accounts payable process turnaround as the poker chip so to speak, which affords them the opportunity to cut their teeth on major process improvement and ultimately career advancement.

 

We hope you found this post useful and encourage you to continue your education on how to transform a transactional document process and monetize for you and your business!

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Topics: Accounts Payable Process, AP Process, Invoice Processing, accounts payable manager

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