Supplier Invoice Inefficiency: The truth behind the AP process and how automation can fix it

Supplier Invoice Inefficiency: The truth behind the AP process and how automation can fix it

01 Picture this: Scenario 1: Your supplier emails their invoice directly to your online invoice system. It s automatically routed to the correct individual for review and then on for approval. Everything is coded correctly. The risk of duplicate payment has been eradicated and you have total visibility into your outstanding liabilities. Fast Fact: 89% of companies believe that automating business processes will enable their company to grow 1 Scenario 2: Invoices are sent to you via post or email sometimes to you, sometimes to the person who ordered the goods/services. Coding is sometimes correct, but you re never quite sure and the invoice gets stuck on the review and approvals merry-go-round sitting on peoples desks too long or getting buried in their inbox. Suppliers chase for payment, sometimes sending in duplicate invoices so they could quite feasibly be paid twice. You re never completely sure you re accruing the right things, your visibility of cash flow feels a bit blinkered to say the least and the team spend far too much of their time rekeying in data. Now if you were building your finance function today, which scenario would you choose? If your current situation is more like the latter scenario, then you are just like most UK companies out there. After all, AP automation has always been associated with large companies those that have lots of employees, complex approval workflows that make investing in a robust supplier invoice management system a priority. But what if you could have a solution like in Scenario 1 with no upfront costs, a quick installation (just a few hours) and low ongoing usage fees? A solution that is built on best practice and that can scale quickly and easily as your company grows? Finally the finance function can step up to being the strategic partner it s always wanted to be and that the business is increasingly demanding them to be. And, imagine the productivity gains that would be achieved. So, if you are still being chased by suppliers regarding the status of invoices, chasing employees for approvals, unable to answer questions about the outstanding liabilities of your company or not sure if you have a clear grasp of cash flow then perhaps now is the time to consider investing in AP Automation?

02 Top Gremlins in a paper based system Years ago, all supplier invoices that came to a company arrived via the post. Nowadays, 99.9% of all invoices are prepared electronically 2, yet still the vast majority are processed manually they are posted or emailed from the supplier and then copied, scanned or printed out when they arrive. Then the physical document gets sent around the building or more than one office for review and approval and eventually makes it to finance for payment. This system has some inherent failings that make it difficult for the finance team to optimise cash flow and operate efficiently. Gremlin #1: Paper Paper is the enemy of process efficiency and visibility. Every time you have a piece of paper somewhere floating around in a process, no one else in that process knows exactly where it is so, suppliers call to get a payment status and you have no way of checking where the invoice is in the review and approvals process. Perhaps this means the supplier will call again, perhaps they ll send a copy invoice, perhaps they ll also call the person who ordered their product or service either way, there is likely to be additional time wasted and increased probability of paying a duplicate invoice. Paper also means the grip you have on cash flow is compromised if you don t know which invoices are out there because suppliers send them directly to the person who ordered, how do you know what to accrue for or what your outstanding liabilities might be? Gremlin #2: People When you are reliant on people to perform a process without much guidance, errors always creep in. Whether that s a wrong person approving an invoice, a wrong code put on the invoice, or the data keyed into the finance system inaccurately, unintentional errors sneak in that someone eventually finds and has to correct taking additional time.

Fast Fact: Main drivers for automating business processes? Top 3 are: 1) reducing operating costs 67% 2) reduce employee admin time 60% 3) help the organisation make Gremlin #3: Process Frustration abounds in manual processes. Suppliers are frustrated they can t find out when they will be paid, approvers are frustrated at the pile of paper on their desk, requestors are frustrated that they don t know if their supplier has been paid risking their relationship and the finance team bear the brunt of the majority of this pain they get the calls chasing up from everyone, run the risk of duplicate payment and don t even know enough to be able to predict cash flow clearly for the company exposing even more risk..and the Gremlins are growing! As your company grows, so does the number of suppliers you have, the number of people buying goods and services on behalf of your company, the number of approvers needed and the number of invoices floating around. The control you have today won t be the control you have tomorrow. And all of that gets even more complex if you grow internationally too. Waiting is not a solution to this problem unfortunately! revenue gains 44% 3

03 But there s good news the game has changed There s never been a better time for companies of all sizes to consider automating their AP process and here s why: Fast Fact: 96% of companies that have automated invoice management have seen positive impact. 4 Technology makes it efficient: With technology in place, the paper element of the AP process is eliminated. Suppliers can email their invoices directly to your invoice inbox removing any need for printing, faxing, scanning or copying paper invoices. OCR (Optical Character Recognition) can read the invoice and pre-populate all the required fields and you can opt to have that checked for you by our team of auditors who will ensure the data is captured accurately and coded correctly before sending it on. Once the invoice is in the tool, you can check on its status at any time some systems can even give suppliers access to see where their own invoices are in the process if you prefer. The coding of the invoice is already done for the requestor and approver and they can review and approve with just a couple of clicks - all the information they need to see is on one screen or on a couple of mobile app screens. Finally, finance can review and do the final approval as well as posting the payment to their ledger without any manual rekeying. Cloud makes it affordable: The old guard of on premise solutions that required on site installations, huge IT effort, expensive support contracts and regular hefty upgrades are a thing of the past. Cloud solutions level the playing field for companies of all sizes. They typically allow data to be quickly and efficiently transferred to ERP and payment solutions thereby removing the need for valuable internal resources to spend time rekeying information. Additionally, the pricing model for cloud solutions means that there are regular payments based on usage whether that s per user or per transaction these can be scaled up or down depending on what happens with your business too. Mobile makes it user friendly: AP automation solutions are also leveraging mobile apps to make the process more streamlined. Typically those in companies that have budget approval authority, and as such invoice approval authority are the people that are out of the office most the Sales or Marketing Director, the MD etc. By furnishing them with a mobile app that allows them to review and approve invoices on the go, you no longer have to wait for them to be in the office for the process to continue.

Are you ready to lead the change? With 80% of the accounts payable function associated with invoice processing, isn t now the time to change? 5 The technology is ready, the implementation is easy and doesn t require intensive internal resourcing. You have the chance to change how the finance department is viewed within your company, as well as help your employees have more fulfilling jobs too. Help your team become controllers and co-ordinators of a key business process - providing analysis and insight that enables the company to better manage its cash flow and bottom line and being true partners to the business leaders. Take the first step and see Concur in action: All of the functionality you ve read about in this whitepaper is part of the Concur Invoice Management solution we d be happy to show it to you in action, provide a quote or provide more information call +44 (0) 1628 645 444 or visit www.concur.co.uk. About Concur Concur, a part of SAP, imagines the way the world should work, offering cloud-based services that make it simple to manage travel and expenses. By connecting data, applications and people, Concur delivers an effortless experience and total transparency into spending wherever and whenever it happens. Concur services adapt to individual employee preferences and scale to meet the needs of companies from small to large, so they can focus on what matters most. Learn more at www.concur.co.uk. 1. Vanson Bourne and Concur Automation Survey - February 2015-600 UK finance decision makers surveyed across companies of all sizes. Further details available on request. 2. http://apn.today/ap-automation/reasons-to-automate/191-five-reasons-to-automate-your-ap-processes.html 3. Vanson Bourne and Concur Automation Survey - February 2015-600 UK finance decision makers surveyed across companies of all sizes. Further details available on request. 4. Vanson Bourne and Concur Automation Survey - February 2015-600 UK finance decision makers surveyed across companies of all sizes. Further details available on request. 5. http://apn.today/ap-automation/reasons-to-automate/191-five-reasons-to-automate-your-ap-processes.html 2015 Concur, all rights reserved. Concur is a registered trademark of Concur Technologies. All other company and product names are the property of their respective manufacturers. Specifications and other details listed are accurate as of printing, but may change without notice. WP AP INEFFICENCY UK 2015/05