The best accounts payable departments are 50 times as productive as the least effective, and using a purchase-to-pay process that combines e-invoicing, integrated procurement and finance solutions, leads to AP excellence and increased productivity, says a Forrester Consulting study conducted for Basware, a vendor of purchase-to-pay solutions.
The findings revealed a significant disparity between those accounts payable departments that are still relying on paper-based processes and those organizations that have adopted automated processes and e-invoicing. Forty-seven percent of the organizations surveyed still receive more than half of their invoices in paper form, which leads to increased errors, delays and costs resulting from manual processes. According to the study, "the worst-performing AP departments don't seem to realize how far they lag behind their peers. In contrast, 60 percent of those in the top quartile saw further scope for improvement. The least-efficient departments can't move forward until they realize just how far they lag behind their peers."
Combining invoice automation with e-invoicing and e-procurement doubles the chances of achieving AP invoice-processing excellence and maximize straight-through processing (STP). Eliminating human intervention in the invoice handling and approval process cuts manual data capture tasks such as document scanning and data entry, thus not only increasing the speed of the process but also providing cost savings within the business. By implementing purchase-to-pay solutions, organizations can gain control and visibility over finance and procurement processes and improve overall process performance.
The integration of e-invoicing and e-procurement works in parallel with the need to centralize responsibility in accounts payable departments to enable process improvements. Finance managers with pan-division responsibilities were found to be more able to invest in better technology and processes than their colleagues operating at a business unit level. Persuading suppliers to send invoices electronically and offering them incentives for e-invoicing was also found to correlate strongly with excellent performance. Eighteen percent of the companies surveyed were processing more than 40,000 invoices annually per full time equivalent (FTE), while 25 percent of respondents needed one FTE for every 4,000 invoices or less per year.
