The paper chase is always hard. For cash flow management, it’s especially hard: Businesses must juggle manual processes, multiple documents and sometimes even contend with the vagaries of inaccurate data.
To that end, research from Wax Digital released last month shows that in the United Kingdom, supplier invoice processing is, well, a chore, to say the least. In a survey of 200 finance professionals across several industry verticals, executives said that issues abound when it comes to grappling with invoices.
As noted by Wax Digital, 60 percent of respondents to the study, which was conducted by Sapio Research on Wax’s behalf, said that dealing with supplier invoices is the most “hated aspect” of their jobs, with 70 percent calling it laborious and tedious and frustration bedevilling 69 percent of those queried.
The impact can be significant, as 82 percent said that poor invoice process management affected job performance, with the end result being poor job satisfaction.
Among other findings: More than half of those surveyed said they saw regular incidents of suppliers issuing invoices with incorrect financial values. Another 37 percent said they’d seen erroneous purchase order and non-matching line items as common problems on statements. At other times, said 31 percent of the finance managers, invoices arrived at the wrong legal entities within their businesses.
The errors are not all coming from outside their respective firms, as roughly one-third of the people surveyed by Wax said they fear individuals on their own team will make additional errors by dint of manual processes.
In an interview with PYMNTS, Daniel Ball, director of Wax Digital, noted that 97 percent of managers said they knew that eInvoicing would salve some of that tedium. But as to why more firms don’t embrace automation, he told PYMNTS that “it’s probably a combination of the perceived pain of change.”
“Even though existing processes are difficult, the potential pain of change may hold people back,” Ball explained. Invoices, he said, are rather complex in terms of the number of different formats available. And complexity rarely stays static.
“As organizations grow, processes scale and the complexities creep up on them,” said Ball. “A process that was once manageable has gotten out of hand,” he added, “but it takes time to make the necessary changes.”
Against that backdrop, he noted, there is indeed room for improvement. In boosting automated processes, staff would be free to do other things to streamline operations. There would be “much more time to be strategic with suppliers,” he said, and firms could “understand performance, better address ongoing issues, spend more time on reporting and business intelligence and introduce aligned initiatives such as early payment discounting.”
Technology previously unavailable can make it easier to manage and process invoices, he said, noting that sophisticated mailroom and scanning services, coupled with integrated purchase-to-pay and eInvoicing systems, make it far easier to automate heretofore manual activities.
He cautioned, “if you have a diverse supply base, you need to give suppliers options. Some will adopt eInvoicing portals, but others will want to follow their own existing processes, which could be paper invoices. A solution needs to map onto the dynamics of the supplier base and make it possible to automatically process all types of supplier invoice — whether paper, email, PDF, fax or electronic.”
The financial impact could be significant: Wax Digital estimated that cost savings on automation per order, from purchase order requisition through to payments, can range from £25 to £45. “With all data being automated, it is easier for the business to look at the true cost of delivery to customers and measure how profitable their products and services are based on this,” Ball told PYMNTS.
In response to a question about cross-border transactions, the executive stated that regulatory landscapes are shifting, helping spur the adoption of electronic invoicing. “Interestingly, we see a lot of the drivers from developing countries in places like South America mandating electronic invoicing as a way to combat tax fraud,” said Ball. “This kind of prescriptive legislation will become much more common globally as governments look to drive electronic invoicing first through the public sector and subsequently for all business.”
Cross-border supply chain management, he said, creates some additional challenges for eInvoicing, “since there is little consistency in invoice legislation from one country to another and systems therefore have to be able to handle and manage a complex and ever-changing set of global rules. But where that is in place, then there is much less room for error,” he said, as there remains no added need to have multiple processing centers across far-flung locations.