Five Simple Steps to Increase Supplier Adoption of einvoicing Jeff White Director, Implementations & Integration ADP Procure-to-Pay Solutions
Agenda Trends in invoice automation Barriers to einvoicing adoption Simple steps to engage suppliers Key metrics to track progress Questions 2
Trends in Invoice Automation 3
Challenges with Current AP Operations More than 40% of business-to-business invoices within the United States are still traded in paper format Paper-based invoices result in a number of challenges including high costs, errors and exceptions and lost discounts Source: PayStream Advisors Invoice Automation Adoption Survey 2012 4
Top Financial Automation Goals for 2012 Increasing electronic invoicing emerged as the top priority for almost a third of companies that participated in PayStream Advisors survey Source: PayStream Advisors Invoice Automation Adoption Survey 2012 5
Benefits of Electronic Invoicing Source: PayStream Advisors Invoice Automation Adoption Survey 2012 6
7 Barriers to Adoption
What s Holding Back Adoption? When the benefits of electronic invoicing is so clear, what is holding back adoption? Why only a quarter of companies in the US are currently using an electronic invoicing solution? How come 40 percent of B2B invoices are still in paper format? What factors are holding are limiting the adoption of einvoicing solutions? 8
Barriers to einvoice Adoption Source: PayStream Advisors Invoice Automation Adoption Survey 2012 The biggest challenge to the adoption of electronic invoicing is organizations concern that suppliers will not change their process and move from paper to electronic invoices 9
Planning for Success Plan your Implementation Thoroughly Today s systems are powerful, so design for the future Ensure sponsorship of the program at appropriate levels Ease employees/users into adoption start with the basics and introduce new features and functions over time Gaining Internal User Acceptance While planning for implementation and roll-out, also plan on how you will bring employees on-board Communicate to employees how the system will improve their experience. Managing Supplier Behavior Supplier enablement and change management cannot be an afterthought to implementation Plan for bringing suppliers on-board as a strategic part of initiative 10
Simple Steps for Supplier Adoption 11
Simple Steps to Ensure Supplier Adoption Engage with your suppliers from the beginning; not after implementation Segment your vendor base to identify suppliers that are most likely to participate Develop a comprehensive supplier enablement strategy and plan Offer suppliers multiple options to transact with you electronically Provide ongoing support as suppliers migrate from paper to electronic invoicing 12
Engage Supplier Proactively Supplier recruitment needs to go hand in hand with evaluating einvoicing options Survey your strategic suppliers to understand their willingness to shift to einvoicing Do most of your key suppliers already use a specific einvoicing solution you will have more success by implementing that solution than forcing them to use something else If the einvoicing vendor you choose charges fees for suppliers to transact, will your suppliers be willing to pay those fees? 13
Segment your Supplier Base Not all of your suppliers are good candidates to migrate from paper to electronic invoices; segment your supplier base to identify suppliers that you are going to target Segmentation can be done using annual invoice volume or spend as criteria Focus on your strategic suppliers to drive the most value from einvoicing Identify and communicate incentives to enable these suppliers to migrate from paper to electronic 14
Develop a Comprehensive Strategy Develop a comprehensive plan to enable suppliers to your einvoicing platform of choice Depending on the nature of your relationship with specific suppliers, identify how to communicate with them phone, email or direct mail Develop activation campaigns using a combination of these communication methods Limit high-touch communication options (eg: phone) for strategic suppliers and leverage mass enablement tactics (eg: email) for the smaller suppliers Have a clear understanding of the support provided by your einvoicing vendor in this area: Will the vendor help with developing the communication materials? Will the vendor administer the activation campaigns and train suppliers? What is the cost of this support? Do you have the internal resources to manage this process? 15
Offer Suppliers Multiple Options Not all suppliers are alike; to increase usage of einvoicing offer multiple options and allow suppliers to choose the einvoicing method that makes most sense for them When evaluating einvoicing solutions look at the different options available for invoice submission High volume suppliers would prefer a hands-free approach to submitting invoices (system-to-system integration) Mid tier suppliers may agree to log into a portal and key in invoice information or drop off a file Some suppliers will never switch from paper to electronic does the einvoicing vendor offer scanning and indexing services to complement einvoicing? 16
Ongoing Support for Suppliers Once suppliers are enabled, you need to support them on an ongoing basis to ensure that they continue to use the einvoicing system and not switch back to paper invoices Some questions to consider: Will the einvoicing vendor provide the required training and support for suppliers? If not, do you have the internal resources to manage this process? What kind of support is available phone, email? What is the typical response time? Is there an additional cost for support or is this included in the contract price? 17
Metrics to Track Progress 18
Metrics to Measure Success Key Metric Percentage of invoices being submitted electronically Percentage of suppliers that are sending electronic invoices Percentage of invoices that have an error or exception Percentage of available discounts that are captured Average time to process an invoice from receipt to payment Average cost to process an invoice Percentage of payments that are late Number of invoices processed per month per FTE Indicator 19
20 Questions?