LOSING THE OPERATOR: HOW EIPP SOLUTIONS CHANGE THE FACE OF PAYABLES

You know when you have an argument and it just sort of sits with you for a while?  Like a berry seed stuck in between your teeth?  I’m still stuck on these quasi-automation solutions I see in the ELECTRONIC INVOICE PRESENTMENT AND PAYMENT marketplace.  I was reviewing an ELECTRONIC INVOICE PRESENTMENT AND PAYMENT (EIPP) application that had developed all these great tools for the AP CLERK.  It’s irritating.  Why are we enabling an obsolete position?

Yes, everyone loved the elevator operator.  And it was a pretty important position when elevators were operated by gears and levers, but does anyone really think that position is relevant today?  Once the technology advanced to the point that anyone could operate it, the need for the elevator operator disappeared.

The fully automated EIPP solutions of today are like elevator buttons.  Yes, you still need an administrator for the whole system the way you still need elevator technicians that make sure everything is working.  However, there’s really no need to have an AP CLERK looking at every invoice and clicking on the screen on behalf of the supplier and buyer who can click on the screen just as easily themselves.

EIPP has gotten that simple.

Fully AUTOMATED PAYABLES with EIPP enables the buyer and the supplier to complete the INVOICING process without a PAYABLES clerk (assuming we’re excluding inferior solutions).  With a fully automated EIPP solution, any of the processes you’ve taught your AP STAFF can be configured into your EIPP system.  A fully automated EIPP solution knows your PO MATCHING rules and tolerances, it knows your APPROVAL ROUTING rules with exceptions and special processing, it knows how to re-route approvals based on vacation and proxy situations even better than your AP CLERK knows.

And a fully automated EIPP solution doesn’t do anything on accident.  It doesn’t mis-key an amount after everything’s approved.  It doesn’t forget that the particular project code needed additional approvals.  It doesn’t just bypass duplicate detection rules when it’s “pretty sure” it’s not a duplicate invoice.  It can calculate DYNAMIC DISCOUNTS and offer them to qualified suppliers.  It’s available 24/7 to give suppliers and buyers status of any invoice as well as a description of all MATCHING activities and all approvals processed and pending.

Creating tools for the AP CLERK is akin to manufacturing elevator chairs for the elevator operator to sit on.  For the AP CLERK, it’s really just insulting. If they’ve been around a while, chances are they can think of much more productive things to do than keying, stapling, and answering supplier inquiries.  Automate the mundane tasks and let them work on contract audits.

Move them to another department.  Train them in asset management. Try them in other accounting positions. Just make sure that if you’ve received mandates from your executive team to cut costs and eliminate waste that they don’t show up and see an elevator operator sitting in a chair asking them “what floor?”

 

ELECTRONIC INVOICING- THE TIME HAS ARRIVED

I was speaking at a conference recently on ELECTRONIC INVOICING, and a question was posed to me, “Doesn’t this mean that we will lose head count in my department?” an AP SUPERVISOR asked.  This is a question that often arises, and it is truly a worthy consideration.

ELECTRONIC INVOICING will necessarily reduce the effort in a typically AP DEPARTMENT (assuming you are using a quality ELECTRONIC INVOICING provider).  These efficiency gains are in the area of keying data into an ERP, communicating with vendors over when they will get paid, or what the check number for the remittance was, answering questions regarding PURCHASE ORDERS that do not match up with the invoice, etc.

These are good things to have removed from ACCOUNTS PAYABLE, but that can often lead to not needing as many people in that department.  Typically this is handled with moving the valuable individuals to other areas to work, but they are still no longer under the hierarchy of the AP MANAGER. Most people would see this as a good thing, but there are a few that will avoid ELECTRONIC INVOICING initiatives solely because they do not want to lose staff.  They view the number of people they have working for them as a status symbol or even a job security issue.

In reality, these individuals are looked at with a target on their back due to a lack of forward thinking and resourcefulness that companies require in this economy. By looking into finding and implementing a great ELECTRONIC INVOICING solution, they are actually growing their stature in their organization and well as receiving all of the benefits that are obtained through receipt of ELECTRONIC INVOICES.  This will give them the ability to rise in the organization, or at least ensure their value to the organization, which equates to job security.

Conversely, those who choose not to look into ELECTRONIC INVOICING may be significantly limiting their usefulness to their company.  Executive are looking to make sure that they have the right individuals in the key positions in their company, and those who have initiated an ELECTRONIC INVOICING measure are typically recognized as having a solid impact on the organization.  Not just in efficiency gains, but in cash opportunities that would never be realized otherwise.

I spoke with an AP MANAGER after my last post and they informed me that they had heard that the Finance Director that they fell under was going to be leaving the company.  This individual is now up for a promotion, (as well as their superior) due in no small part to the success of their IMPLEMENTATION of ELECTRONIC INVOICING (E-INVOICING) with IPAYABLES. This project touches many in the organization, and truly made AP stand out as a group that is helping the company achieve their goals!

 

DYNAMIC DISCOUNTING – IT’S NOT ROCKET SCIENCE

Going back to one of my EARLIER POSTS, I talked about the numerous benefits that ELECTRONIC INVOICING brings.  One of these benefits is called DYNAMIC DISCOUNTING. ACCOUNTS PAYABLE in the past was seen as primarily an expense area and not as a profit center. ELECTRONIC INVOICING and the new opportunities it provides are helping to change SUPPLY CHAIN FINANCE. Traditional paper-based invoicing can result in invoice processing delays which can make it nearly impossible to take discounts. When terms are 2%10, what are your options when the invoice isn’t approved and processed until day 30 or even day 11?  This isn’t to say you have to take the discounts but having the option allows your organization greater flexibility to maximize the value of the terms already in place and allow more discounts and profits to accrue to you.

So let’s take a step back to the basics.  DISCOUNT TERMS.  Take that ever popular 2% 10 Net 30.  It’s a great deal.  If you have another place to put your money for an extra 20 days that provides a better return, I would really like to be your friend.  This is just one of many DISCOUNT TERMS available. Discount terms are really a win-win for both parties. SUPPLIERS get paid early and you get a discount.  Our friends in PROCUREMENT have negotiated this discount so let’s enjoy the benefits of their labor. Now I do understand the importance of CASH FLOW FORECASTING and maintaining the appropriate WORKING CAPITAL.  I’m not suggesting one raids working capital in order take discounts on everything putting your CASH FLOW in jeopardy.

Prudence and balance are always in order. But why leave money on the table? With that being said, so what is DYNAMIC DISCOUNTING? Standard Discounting is rather rigid.  You get a 2% discount if you pay before 10 days and 0% after 10 days.  It is the all or nothing deal.  Miss the train and you’re out of luck.

DYNAMIC DISCOUNTING however provides greater flexibility and more options in case you miss the 10 days but would still like to take advantage of the DISCOUNT.  This discount percentage is on a sliding scale which decrease with time so both the benefits are still available but on a flexible (A.K.A DYNAMIC) scale.  It also provides a more reasonable approach for suppliers where 2% at day 10 is ok but not 2% at day 20 or 25.  The more suppliers which agree to offer up discounts, on this sliding scale, the more opportunities ACCOUNTS PAYABLE has to add PROFIT CENTER into the benefits they provide. The great thing about DYNAMIC DISCOUNTING is that it isn’t rocket science or a complex Derivative trying to securitize a revenue stream from your grandma’s cookies.

It’s the same DISCOUNTING you have been doing for years but with a lot more flexibility. In addition, you will not be the first to use this as many companies are currently increasing their capturing of DISCOUNTS via DYNAMIC DISCOUNTING. So rise up and take those DISCOUNTS. Watch FORECASTING CASH FLOW’ In’ instead of ‘Out’.  Seize the opportunities that are available to SUPPLY CHAIN FINANCE in greater abundance today than yesterday because of ELECTRONIC INVOICING.

Tags: ACCOUNTS PAYABLE, CASH FLOW, DI

 

OUTSOURCE ACCOUNTS PAYABLES? OUTSOURCE YOUR CEO INSTEAD.

So you really can’t outsource your CEO, but today as we chatted here at iPayables about AP OUTSOURCING our CEO, Ken Virgin, was being a smart aleck so I jokingly said “We should outsource you.” OUTSOURCING your CEO, VP of Sales or COO is laughable on its face (we did have a good laugh) because these positions are valued for their strategic thought, determined execution and the leadership they bring to the organization.

Even if one of these positions is costing you a lot of money and could be done more efficiently elsewhere you’re not likely to even consider it.  The same is true to the majority of the folks working in ACCOUNTS PAYABLE DEPARTMENTS in most companies.  It’s just sometimes hard to tell since they are buried under a mountain of paper and inundated with endless vendor phone calls.

The rationale usually goes something like this:  If I SCAN all my PAPER INVOICES and have folks in Bangalore or Shanghai key them and reroute the phones to India or China I’ll save a bundle of money. The truth is you will save some cash.  The question is at what cost to vendor relations, company reputation and overall efficiency. ACCOUNTS PAYABLES can be like veins in the circulatory system. Not always valued for their contribution, vital to overall health and quite a pain if something goes wrong.  The real question that smart companies are asking themselves is “why is there cost and inefficiency in AP and what can I do about it”.  Especially companies that already travelled the AP OUTSOURCING road.

The answer of course lies in the AUTOMATION of ACCOUNTS PAYABLE.  More and more companies are untying the PAYABLES OUTSOURCING knot; automating the capture, WORKFLOW, MATCHING, and payment of invoices and unlocking the intelligence and capabilities of their AP staff.  These companies have realized that paying someone to key invoices – even at outsourced rates – is not the answer.  AUTOMATE, AUTOMATE, AND AUTOMATE.

 

PLEASE DON’T PRETEND IT’S ACCOUNTS PAYABLE AUTOMATION

I’ve heard a few awkward stories of people “pretend automating” their payables department.  Their people are still doing basically the same jobs and they still face most of the same challenges that they always have.  My fear is that many ACCOUNTS PAYABLE groups today feel that PAYABLES AUTOMATION consists of one or two tools you buy: a SCANNER, a WORKFLOW solution, a place for vendors to look at their invoice status.  Maybe they feel pressure to tell their boss that they’re AUTOMATED or maybe they really just don’t know what it means. There is a cold, cruel way to tell if you’re automated.  Think of what automation means in the auto industry.  It’s not factory workers wearing robot costumes or walking around with special tools.  The cold truth is if someone’s job is automated, they’re not there anymore.

Any ACCOUNTS PAYABLE GROUP that still has basically the same clerks as before entering data, coding invoices, reviewing signatures, MATCHING PURCHASE ORDERS, or answering invoice status calls, just can’t claim to be AUTOMATED.  I’ll also call out ACCOUNTS PAYABLE DEPARTMENTS that switch people from keying into SCANNING, or OUTSOURCING the whole department to a different group of people.  Not PAYABLES AUTOMATION.  Even if you have everything imaged and your clerks don’t have paper, they have images that they’re coding into the AP SYSTEM. Not AUTOMATED. Also, while using some efficiency tools are a great start, tools by themselves are not ACCOUNTS PAYABLE AUTOMATION.  I knew a company that received a large number of EDI INVOICES, which was great.  They printed them out on paper and keyed them into their payables system, which is not so great.

A fully AUTOMATED SOLUTION should start with ELECTRONIC INVOICING from as many suppliers as possible (so include EDI, WEB ENTRY, FILE UPLOAD,PO FLIP) and throw in a scanning post office box to catch the remaining paper scraps.  PO MATCHING should happen as the supplier is entering the invoice so they can resolve issues before they even submit the invoice.  Status of the invoice is available to the supplier through every step of the process.

WORKFLOW routes invoices to the person who order the goods for coding with all the validations and controls necessary to ensure it is done properly and is forwarded to the various approvers after that based on the controls defined by the company.  Disputes are resolved online between the supplier and the buyer. In an AUTOMATED environment, ACCOUNTS PAYABLE DEPARTMENTS don’t touch invoices, they don’t look at invoices.  They monitor the flow, administrate the system, maybe handle exceptions, but all of the traditional clerk activities are automated. Maybe payables automation isn’t for everyone.  I worked with one company that turned it off after the epiphany.  In their words, “If we do this, she won’t have anything to do”.  Not until after they implemented, did they really understand what real AUTOMATION meant.

PAYABLES AUTOMATION doesn’t need to be cold and cruel.  Most of our clients have created internal audit groups or just moved people into unrelated positions.  Every organization needs to determine when they want to AUTOMATE PAYABLES. Eventually, it will be an efficiency requirement of every organization. It is wonderfully efficient and provides visibility and control as never before. However, there will be companies that just aren’t comfortable with it yet.  Or the companies that aren’t comfortable yet, I can understand, but please, don’t pretend to be automated if you’re not.

 

AP AUTOMATION: ADVICE FOR BEGINNERS

Researching ACCOUNTS PAYABLE AUTOMATION or complete ELECTRONIC INVOICING, can be a little overwhelming.  You start out wanting to learn about how a supplier can key an invoice into a portal and soon discover that WORKFLOW, SUPPLIER STATUS DISPLAY, and DISPUTE RESOLUTION can really change your world for the better.  Then you hear about the great adoption success that comes with professional SUPPLIER ADOPTION services and how remaining paper is sent to a PO Box where it is converted to electronic and you begin to see the big picture of how pretty much everything in PAYABLES can be automated.

Along with your research you may hear warnings about the negative impacts of SUPPLIER FEES or the complexities of setup or configuration.  Throw in some discussion of DYNAMIC DISCOUNTING and it can lead to a realization that this is going to be a bigger project than originally anticipated. So what are your options now that you really want this, but it’s a bigger scope than you originally anticipated?

  1. That’s what a large number of companies do.  It’s not that the price tag for AP AUTOMATION has changed, just the effort and buy-in required to get it done.  Maybe you’ll have enough time next year.  (Hint: this isn’t the best strategy)
  1. Go with a well-marketed do-it-yourself solution.  This is better than the first idea, but there’s a good chance it’s going to take a lot longer to get setup and probably even have to hire a consultant.  And what sort of impact are the SUPPLIER FEES going to have on the supplier adoption efforts you have to do yourself, not to mention the supplier relationship?  The problem with the heavy marketed solution is that the cost of that marketing shows up in higher price and less service.
  2. Go with the full-service solution.  Oftentimes, the full-service solutions (such as IPAYABLES) are growing on reputation instead of marketing.  This is great for the companies that can find these solutions.  The cost is usually less, and the service provider basically runs the project until you’re up and going.  The full-service solutions will often also contractually guarantee time lines and adoption rates.  But because there is less marketing material about them, it’s a good idea to check references to validate their offerings.
  1. Obviously, I push for the third option.  The second option can work, but it can be a little riskier and usually quite a bit more expensive.

ACCOUNTS PAYABLE AUTOMATION has so much to offer.  Delaying is just not a reasonable option.  If you’re experienced with PAYABLES AUTOMATION, and you’re being pressured into the higher priced do-it-yourself solutions, it’s not the end of the world.  You can still make them work, it’s just more effort.  But if you’re new to PAYABLES AUTOMATION or if no one is trying to force you down one path, then go with a full-service solution that will guarantee your success.

 

THE ULTIMATE CASH DEVISE WITH E-INVOICING

DYNAMIC DISCOUNTING or EARLY PAYMENT can be the ultimate cash management device when using E-INVOICING.  As described in Wikipedia, cash discount reduction is “a price given by the creditor to the debtor is known as cash discount. This discount is intended to speed payment and thereby provide LIQUIDITY to the firm. They are sometimes used as a PROMOTIONAL device.” An example of a discount is as follows 2/10 net 30 – this means the buyer must pay within 30 days of the invoice date, but will receive a 2% discount if they pay within 10 days of the invoice date.

6 COMPELLING REASONS FOR EARLY PAY:

  1. BETTER DISCOUNTS – APPROPRIATE COSTS ARE DETERMINED FOR EARLY PAYMENT WHICH COORDINATES WITH SUPPLIER’S REQUIREMENTS.  SUPPLIER AGREES TO THE DISCOUNT AND CAN LOOK FORWARD TO A PAYMENT THAT MEETS THEIR SCHEDULE.
  2. GUESSWORK IS ELIMINATED – A SCHEDULED PAYMENT IS SUBMITTED IN A TIMELY MANNER.  THE DATE THE PAYMENT WILL BE MADE IS SELECTED AND CARRIED OUT.
  1. STRONGER BUSINESS RELATIONSHIPS ESTABLISHED -BUYER AND SUPPLIER ARE ABLE TO WORK TOGETHER WHILE IMPROVING CAPACITY FOR FUTURE AFFILIATIONS.
  1. IMPROVES EQUITY – IN THE ABOVE EXAMPLE RETURN ON CAPITAL IS 36%.
  1. REDUCES THE COST OF DOING BUSINESS – FOR SUPPLIERS CREDIT IS EITHER DIFFICULT TO SECURE OR EXPENSIVE.  BY LEVERAGING THE POWER AND FLEXIBILITY OF DISCOUNTING, THEY CAN CREATE AN OPTION THAT REDUCES PRICES, REDUCES THE COST OF BORROWING AND ULTIMATELY – REDUCES THE COST OF DOING BUSINESS.
  1. CUTS OUT THE MIDDLEMAN COSTS – BY DEALING DIRECTLY WITH SUPPLIERS ALLOWS A DISCOUNT WITH NO MIDDLEMAN INVOLVED.

Recently one of the World’s Largest Restaurants was asked to give their feedback on how well they were able to incorporate EARLY PAY into their ELECTRONIC INVOICING system.  Included are some of the questions and answers. Just a follow up to the conference, here are some comments from attendees:

  • IT WAS TIME WELL SPENT.
  • EXTREMELY BENEFICIAL AND VERY INFORMATIVE.
  • I THOUGHT THE CONFERENCE WAS GREAT AND IT WAS NICE TO HAVE OTHERS INVOLVED.
  • I CAME AWAY FEELING VERY POSITIVE AND MOTIVATED!
  • THE INFORMATION YOU GUYS PROVIDED WAS VERY USEFUL AND HAVING THE OPPORTUNITY TO NETWORK WITH OTHER USERS OF THE IPAYABLESSYSTEM WAS EXTREMELY VALUABLE TO ME.  I HOPE YOU KNOW HOW MUCH WE APPRECIATE THE SUPPORT WE GET FROM THE FOLKS AT IPAYABLES, AND THE VALUE I PLACE ON OUR PARTNERSHIP.

Again, if you are a client the missed the conference, or if you are considering doing PAYABLES AUTOMATION and just want to see what discussions we had, let me know and I’ll send the conference notes.

 

BEST PRACTICES FOR ACCOUNTS PAYABLE AUTOMATION FROM REAL CUSTOMERS

A few weeks ago, we held our 2012 User IPAYABLES Conference in Dana Point, California.  It was a great event with beautiful weather and great discussions about best practices in PAYABLES AUTOMATION. The focus of the conference was a discussion of best practices around the following topics:

  • INTERNAL CHANGE MANAGEMENT
  • SUPPLIER ADOPTION
  • DYNAMIC DISCOUNTING AND CARD

I liked that one customer described approvers and suppliers as “non-compliant” if they weren’t invoicing electronically.  It was in all their communications, so it was very clear that the PAYABLES AUTOMATION initiative was not voluntary. I’m actually compiling all the best practice discussions into a short white paper.  If you’re interested in ACCOUNTS PAYABLE AUTOMATION best practices, you might want to request a copy from me (KEN.VIRGIN@IPAYABLES.COM).

 

YUM! BRANDS & ELECTRONIC INVOICING

I had the pleasure of co presenting a webinar this week with Dave from YUM! BRANDS (they are better known by their companies KFC, TACO BELL, and PIZZA HUT).  Dave spoke about how they have been extremely successful with ELECTRONIC INVOICING and DYNAMIC DISCOUNTING. They have seen great improvements in their overall processing of E-INVOICES as well as getting invoices approved on an average of less than 5 days. They are able to accomplish this through INVOICEWORKS and our ELECTRONIC INVOICING and WORKFLOW tools.  This has enabled them to reach their goals in converting their suppliers from PAPER CHECK to ACH TRANSACTIONS, which was an executive initiative.  All of these have enabled the ACCOUNTS PAYABLE DEPARTMENT to be viewed as innovators and forward thinkers as opposed to a back office necessity.

Another HUGE advance that they have made is with the DYNAMIC DISCOUNTING tools.  They are now bringing in more in rebates than their department spends.  This is key when you are trying to show value as a shared service department. An unexpected perk was the fact that the Restaurant General Managers are no longer having to field calls from vendors about invoices and if they were paid or not.  This is not one of the job functions that YUM! are looking for their RGMs to do, they want them to manage profitable stores long term.

Dave did an awesome job, and I am glad that we were able to share what one of our clients is doing with ELECTRONIC INVOICING and how it has impacted the organization.

 

GOOD DISCUSSIONS ON PAYABLES AUTOMATION BEST PRACTICES

At our user conference in July, we presented a few topics for discussion.  The goal was to let customers share their experiences on IMPLEMENTING ELECTRONIC INVOICING and PAYABLES AUTOMATION.  It was a great discussion of the following topics:

  • INTERNAL CHANGE MANAGEMENT
  • SUPPLIER ADOPTION
  • DYNAMIC DISCOUNTING AND CARD

The first discussion dealt with training and encouraging employees to use INVOICEWORKS.  Most of the comments dealt with using executive management mandates, newsletters and mass emails, and training sessions. My favorite takeaway was how one group called paper “out of compliance”. So any department that was not using the new ELECTRONIC INVOICE/PAYABLES AUTOMATION SYSTEM was out of compliance. Obviously, nobody likes to be out of compliance, so employees and key players changed their behavior and started using INVOICEWORKS to receive and approve invoices.

The second discussion dealt with encouraging participation from SUPPLIERS.  Aside from the various comments on how to get suppliers to send INVOICES ELECTRONICALLY, it was good to see the success rates customers had.  Over 78% of customers were near or had exceeded their supplier adoption targets.  The other 22% walked away with some best practices to incorporate. The third discussion point was more like two mini-case studies from YUM and DELTA AIR LINES.  YUM shared their stories of success with IPAYABLES ELECTRONIC INVOICING and DYNAMIC DISCOUNTING and DELTA AIR LINES talked about their success using INVOICEWORKS to pay ELECTRONIC INVOICES with AMERICAN EXPRESS.

The comments from the conference seemed so valuable that I compiled them into a white paper.  It’s only about four pages long, but it gives good insight into how these companies really made ELECTRONIC INVOICING and PAYABLES AUTOMATION work for them.

 

E-INVOICING, ARCHIVING AND REPORTING

While the main reason to ARCHIVE invoices deals with regulatory and audit issues, having a separate and long-term storage of invoices and related data enables a much sought after and complimentary product, AD-HOC REPORTING. Ken Virgin, CEO, who introduced the new system said, “With the traditional PAYABLES AUTOMATION system, you are limited on the reporting you can do. Transaction processing systems have restrictive parameters that restrict reporting capabilities.

In other words, good reporting used to mean a slow system.  By introducing online ARCHIVE, IPAYABLES offers users the ability to create any report, as simple or complex as desired, with no performance impact on the original system.” IPAYABLES ONLINE ARCHIVE is offered as a service, so there is no hardware or large technology effort.  “IT departments look like the bad guy for not letting authorized employees get to the data they need, but, in reality, they have to protect the performance of their systems. “IPAYABLES ONLINE ARCHIVE is an affordable and easy way to protect the system performance while allowing authorized employees the complex reporting access to data they need.” said Jon Titel, CTO iPayables.

The web interface allows for a simple search of the original invoice and related data (invoice image if applicable, audit trail, approval/processing time stamps and supporting documentation), as well as the more robust ad-hoc reporting capabilities where users can use query tools or even direct SQL queries to create complex reports.

Data is archived close to real time, so reporting can be applied for audit or for more current needs such as liability reporting.  Because it is web-based and is not user seat priced, any authorized user in the organization can access it and/or export it.

KEY FEATURES:

  1. SECURE, FAST and ALWAYS AVAILABLE.  Designed to ensure maximum availability as well as excellent performance.  Standard backup processes deliver the security and peace of mind that your data will be available when you need it.
  2. ARCHIVEonly what is required. With IPAYABLES ONLINE ARCHIVING the data is only kept for the duration of time you request.  If internal auditing or regulatory requirements are necessary, you can quickly make the adjustments by eliminating or start retaining those documents whenever needed.
  3. AFFORDABLE.IPAYABLES economies of scale and expertise allow for premium features at a reasonable price.

 

EIPP AND P2P – THAT LAST “P” IS FOR “PAYMENT”, RIGHT?

EIPP is ELECTRONIC INVOICE PRESENTMENT AND PAYMENT. P2P is PROCURE TO PAY.  Sounds simple enough that you would want to automate the entire ACCOUNTS PAYABLE process.

Unfortunately a recent independent market survey found that many EIPP or P2P providers don’t actually provide payment services or even connects to payment services as part of their standard business model.  The response most often received was “If the customer really presses we could partner with so-and-so.”

This glaring omission from the EIPP feature set is pretty surprising.  It is true that many enterprise customers are not looking to outsource payment processing but to not have an integrated, robust payment offering as part of your EIPP toolset is short-sighted.

One of the first indirect benefits of automating the ACCOUNTS PAYABLE process is the decreases approval or match time and hence the larger window for discounts or P-CARD payments.

This expanded window of opportunity enables both customers and suppliers the chance to negotiate real time discounts that meet their business needs.  SUPPLIERS are much more willing to take PURCHASING CARDS as PAYMENT, even though they pay a transaction fee, because they are confident that those payments will be significantly early.

Unfortunately ERP SYSTEMS are not built to take advantage of these advanced payment options and this is where a robust EIPP provider can step in with their payment capabilities and deliver the added value.

An EIPP provider that hasn’t integrated payment into its software, services and processes is going to have a hard time delivering these benefits, even if the “customer really presses”.

IPAYABLES advanced payment capabilities have been used by its customers for almost a decade.  If complete ACCOUNTS PAYABLE AUTOMATION is what you’re looking for then make sure that last “P” in EIPP and P2P is real.  No sense in going with a pretender.

 

EARLY INVOICING TO 21ST CENTURY E-INVOICING

Today I wanted to explore when INVOICING first started way back in the 1st Century. I’ll also take a brief snap shot of what one of George W’s INVOICES looked like in the 18th century and then discuss what an EINVOICE can do for an organization in the 21st Century.

INVOICING CAN BE TRACKED ALL THE AWAY BACK TO THE MESOPOTAMIAN CIVILIZATION (THE CRADLE OF CIVILIZATION) WHERE THEY KEPT TRACK OF BUSINESS CODE STRUCTURE AND GOVERNMENT REGULATIONS FOR COMMERCE. EXPERTS HAVE EVIDENCE THAT PROVES 4,000 YEARS AGO, THE MESOPOTAMIANS CREATED THE CONCEPT OF factoring. FOLLOWING MESOPOTAMIA, THERE IS EVIDENCE THAT THE ROMANS SOLD PROMISSORY NOTES AT DISCOUNTED PRICES. ROMAN MERCHANTS ALSO ENLISTED THE SERVICES OF COLLECTORS TO SETTLE TRADE DEBTS. BUT FACTORING AS WE KNOW IT TODAY GOT ITS START IN THE MIDDLE AGES.

Fast forward to 1768 and see an INVOICE that George Washington used to order supply’s for himself and Martha. GEORGE WASHINGTON sent this INVOICE, written in his own handwriting, to his agent in London, Robert Cary & Co., on June 20, 1768. Washington requests nails, buttons, scissors, linens, sugar and spices, fishing equipment, red sealing wax, gloves, shoe buckles, dress-goods, and similar items. One of the more stylish items on the list is, “1 Mans best Beaver Hatt.” And for Martha he orders a green satin quilted petticoat and a handsome winter silk, in a color other than yellow, to be made into a “Sacque & Coat for a middle sized Woman.”

This INVOICE is published in W. W. Abbot and Dorothy Twohig, eds., THE PAPERS OF GEORGE WASHINGTON: COLONIAL SERIES, vol. 8 (Charlottesville: University Press of Virginia, 1993), 100-102. Fast forward again to 2010 as the major Fortune 500 Companies are saving millions of dollars each year doing E-INVOICING. E-INVOICING automates ACCOUNTS PAYABLE departments with quality technical solutions.  These solutions ELIMINATE PAPER from purchasing to payment reconciliation.  What used to be manual now is automated. Information is captured and recorded online.

They are either uploaded into ELECTRONIC INVOICE files or sent to PO boxes for ELECTRONIC conversion.  Either way you never get paper INVOICES.  It’s clean and fast with ELECTRONIC INVOICES being matched for approval.  It’s just that simple.

The Mesopotamians started many systems that have shaped our way of life and our way of thinking.  Mesopotamia was the “Cradle of Civilization”, so whatever they did people watched and listened.   During the 18th Century and now into the 21st Century organizations have also observed and taken heed to improving their bottom line.  Today people are watching and listening as E-INVOICING makes new inroads and helps improve ACCOUNTS PAYABLE department’s ROI into the next Century.

 

VISIONS OF AP AUTOMATION DANCING IN THEIR HEADS

TWAS THE NIGHT BEFORE MONTH END and all through the office,

Not an invoice was coming through AP AUTOMATION.

Sticky Notes were stuck on the invoices with care,

In the hopes that an approving signature soon would be there.

The approvers were all snug in their tight little cubicles,

While visions of AP AUTOMATION danced in their heads.

And the CFO in a tie, and me with my clip board,

Had just settled into a meeting on ACCOUNTS PAYABLE AUTOMATION.

When out in the hallway there a rose such a clatter,

We sprang from our chairs to see what was the matter.

Away to the Accounting department we flew,

To see what the heck was so exciting and new.

When what to my wondering ears should I hear?

But chants of “AP AUTOMATION,” to help silence our fears.

When I spied a jolly little elf, from IPAYABLES.

He was jolly and nice and kindly said, “We can help fix your ACCOUNTS PAYABLES.“

“Now Ariba, Xign, Basware and Prodigia, none of them can help you with your AP AUTOMATION the way that we can.”

“We will get rid of your paper, and put in the best work flow. We will get your invoices approved before you can know.”

“Now this is all fine A P AUTOMATION, but” I said, “Let’s talk about the things we are most fearing.”

“Control, or the lack of it, is our biggest fear,

What can iPayables do about that here?”

“Well” said the jolly ole elf, “let’s talk about baseball and put that on the shelf.

Just kidding, just kidding, what I meant to say,

With InvoiceWorks we can come in and save the day!”

ACCOUNTS PAYABLE AUTOMATION is all about efficiency and cost,

It should not include invoices getting lost.”

I said “AP AUTOMATION sounds like the way to go,

And IPAYABLES is definitely the best that we know!”

He left us in good cheer and went to the door,

And entered the elevator to exit our floor.

He waved through the air, and drove out of sight,

“Happy INVOICING to all, and to all a Good Night!

 

PAYABLES, PAPER AND PURCHASE TO PAY

PURCHASE TO PAY, PROCURE TO PAY, PROCUREMENT TO PAY, P2P, ORDER TO CASH; there is a lot of terminology which can get confusing, especially when they all refer to the same thing.  At times I feel like I am back at Andersen Consulting (now Accenture) with all of the various terminology and acronyms which I then needed to explain to clients.

PURCHASE TO PAY essentially covers the world of PROCUREMENT, TIME AND EXPENSE, ACCOUNTS PAYABLE and PAYMENTS.  It’s your FINANCIAL SUPPLY CHAIN. In today’s environment, companies need to be able to do more without adding additional resources.  Initiatives to drive costs down, improving their processes, reviewing and consolidating their purchases, managing existing contracts, capturing discounts, etc are common at most companies. The challenge can seem a bit daunting.  You may ask yourself, where do I start?  Is this an all of nothing effort?  Can I do this in phases?  Can this be done in a few months instead of years? My recommendation is to start with the invoices coming into ACCOUNTS PAYABLE.

 

PURGE THE PAPER

Paper is neither very manageable nor visible.  By offering up options which allow suppliers to provide invoice electronically is the most effective approach.  The following options used together allow 100% of your current paper invoices to be delivered ELECTRONICALLY in a very short period of time.

  • WEB PORTAL FOR ONLINE ENTRY
  • FILE UPLOAD FOR VARIOUS COMMON FORMATS
  • EMAIL ACCEPTANCE OF PDFS
  • IMAGING TO SCAN AND INDEX THE REMAINING PAPER

Now that the invoice is ELECTRONIC, additional tools can be added such as PURCHASE ORDER MATCHING.

PURCHASE ORDER MATCHING:

Why wait until the INVOICE has been sent by the supplier and is being processed by your ERP to find out there are match exceptions?  The majority of the match exceptions can be handled up front by the supplier before the invoice is even sent.  Now I’m not suggesting that you eliminate or stop the matching that is performed by your ERP SYSTEM as it serves a very important purpose.  The only issue is that match exceptions are found after the invoice is submitted by the supplier and requires ACCOUNTS PAYABLE and/or PROCUREMENT to deal with the exceptions. Why not have the match exceptions handled up front by the supplier? Consider this upfront activity a ‘PRE-MATCH’.

  • INVOICE TO PURCHASE ORDER (2-WAY)
  • INVOICE TO PURCHASE ORDER TO RECEIPT (3-WAY)
  • OR THE MANY VARIATIONS AND CRITERIA THAT CAN BE APPLIED TO MATCHING (BLANKET, CONTRACT, PLANNED, ETC).

As part of the supplier submitting the PO-BASED INVOICE, such as via a web portal, file load, email, etc., apply your 2, 3 or other- way match criteria.  That way if there is an issue, the supplier can review and correct it prior to the invoice being submitted.   They may need to adjust the unit price for example or that the quantity being invoiced, therefore freeing up both PROCUREMENT and ACCOUNT PAYABLE from having to research, call and track down these exceptions. Plus the supplier experience is improved as they have less payment delays and issues that they also must work to resolve.

Tackling the whole PURCHASE TO PAY process can best be accomplished by taking these two steps first.  From here additional opportunities will present themselves regarding increased visibility, workflow, analytics, greater control, etc.  Now you have the appropriate tools to achieve your goals and move your organizations and company forward.

 

WHY SHOULD YOU CARE ABOUT ELECTRONIC INVOICING – IT’S YOUR JOB!

There are a lot of people out there that can’t be bothered with the topic of ELECTRONIC INVOICING. They are set in there ways and things are working as they always have, not perfect but manageable.  You have your AP MANAGER or CONTROLLER thinking that having ELECTRONIC INVOICES flowing through the organization may sound neat, but it is not necessary and if there are no changes to the status quo then everything is fine. The problem is that somebody will introduce ELECTRONIC INVOICING into your organization, and it better be you so that you can make sure that the ELECTRONIC INVOICES are produced, routed and paid as you want.  What I mean is that there is probably someone in your IT department who would love to make a name for themselves in the organization, and they may come up with INTERNET INVOICING as their ticket.

They will make sure that the application that they recommend will suit their needs, and not necessarily yours.  They will typically look at something that will be highly controlled by IT and will reside in their fiefdom. Purchasing holds the same opportunity to have someone sabotage your department’s goals. They will typically look into an application that is focused on PROCUREMENT, with a slight regard to ELECTRONIC INVOICING. Both of these scenarios are bad because the control is taken away from the group that needs it. A good INTERNET INVOICING solution will allow administrators in the ACCOUNTS PAYABLE DEPARTMENT, to run reports, make queries, check on statuses, etc.  AP will not need IT’s involvement to run reports to see how much was spent on de-icing last November in Maine, the AP folks will be able to do that.

This is typically a good thing from an IT perspective, since they are usually overworked and under-appreciated and are glad to have menial tasks like that off of their plate.  In reality, purchasing is probably the bigger threat to a successful ELECTRONIC INVOICE INITIATIVE.  Their goals are centered on things that they already know, and do not want to enlist the help of other departments. All in all, it is in your best interest to get the ball rolling with ELECTRONIC INVOICING as soon as possible, if you don’t, someone else will!

 

EIPP AND AP MANAGER QUALITY OF LIFE

When we discuss the benefits of ELECTRONIC INVOICE PRESENTMENT AND PAYMENT (EIPP), it is usually around efficiency gains, reduced error rates and additional tangible benefits like DYNAMIC DISCOUNTING. But one of the greatest benefits is the improved “quality of life” for the AP MANAGER.

Traditionally, the PAYABLES DEPARTMENT deals with a lot of fires that normally stem from a supplier that needs to get paid, or someone that got paid when they shouldn’t have.  There are other issues like an invoice being improperly coding, or audit questions around if all the correct signatures were all collected, but more often the panic raising issues deal with some supplier who hasn’t been paid and no one knows why, or a SUPPLIER who was paid when they shouldn’t have been.  The crisis usually starts with a conversation between some employee and a SUPPLIER where the employee is saying something like, “that should have been paid already, let me see what’s going on”, followed by some disparaging remark towards the PAYABLES DEPARTMENT and emails cc’ing everyone’s boss.

Enter EIPP.  Organizations are amazed with how smoothly PAYABLES runs when invoices are visible from day one.  When a SUPPLIER submits an invoice through a web portal, or uploads a file, the invoice is immediately visible to everyone in both organizations (at least with a high quality EIPP solution).  Anyone, including the SUPPLIER can see where the invoice is, and if it has been approved or matched or paid. All of the mystery and distrust melt away.  There’s no finger pointing of who was responsible for losing the invoice.  Did the SUPPLIER really send it?  Did the manager really approve it and forward it on?  Did a PAYABLES clerk accidentally file it in the wrong pile?  All of those issues disappear with ELECTRONIC INVOICE PRESENTMENT AND PAYMENT.

The result of EIPP is a more visible and uniform process, which in turn, means less firefighting.  As one manager after implementing ELECTRONIC INVOICE PRESENTMENT AND PAYMENT put it, “we became seen in the best light ever”.  And that’s what EIPP should do.  It should lower your per invoice cost and it should make your PAYABLES DEPARTMENT look good.  And if your PAYABLES DepartmenT looks good, the blood pressure of your AP MANAGER should drop a few points back down towards normal.

 

BUILDING A BULLETPROOF BUSINESS CASE: WEBINAR WITH IPAYABLES & PAYSTREAM

Building a solid business case is often one of the most over-looked, but important steps in launching an AP AUTOMATION INITIATIVE. Project launch success is realized or lost based on the initial strategy and roadmap you develop, so don’t miss this critical webinar where we’ll be discussing key elements to consider while building your case. PayStream has been developing AUTOMATION roadmaps for over 10 years and have the tricks of the trade to share with you in this complimentary 50-minute webinar with head AUTOMATION architect, HENRY IJAMS and PAUL KERINS from IPAYABLES. Listen in as they discuss:

  • Make your case and win upper management approval the first time.
  • Ways to get IT, PROCUREMENT and other departments on the same plan.
  • Navigate the AP AUTOMATIONtechnology jungle like a pro.
  • AP DEPARTMENTmetrics | what’s your paper quotient?
  • Review the elements of a winning AUTOMATION

 

PROMINENT E-INVOICING SPEAKERS FOR WEBINAR ON FEBRUARY 23RD

In a few weeks we are in for a real treat.  Two of the top moderators and speakers in the ELECTRONIC INVOICING INDUSTRY will be joining together for a webinar on “BUILDING A BULLETPROOF BUSINESS CASE”.THOSE TWO SPEAKERS WILL BE HENRY IJAMS FROM PAYSTREAM ADVISORS AND PAUL KERINS FROM IPAYABLES.

HENRY IJAMs (pronounced Iams) is the Managing Director and Founder of PAYSTREAM ADVISORS. As a former banker and PAYMENTS TECHNOLOGY entrepreneur, he is well-known in the FINANCIAL AUTOMATION and PAYMENTS INDUSTRY and speaks frequently at conferences. Mr. Ijams’ 20 years of experience includes key positions with Citibank and Manufacturers Hanover Trust as well as a manager of Ernst & Young’s Financial Services Consulting practice.

Mr. Ijams has developed a leadership position in the financial industry through his research publications and articles on trends and strategies on the automation of back-office financial operations such as ACCOUNTS RECEIVABLE and PAYABLES, and treasury. PAUL KERINS VP of Sales with IPAYABLES is also well-known for his expertise and speaking abilities in the

E-INVOICING INDUSTRY. He has over 20 years’ experience in the B2B market place and has spoken at the IAPP Conference for the past 4 years.  Next week he will be speaking at the Kentuckian IAPP/IARP chapter meeting on February 9th at the Papa John’s corporate offices in Kentucky.

Join Henry and Paul, for a lively discussion about “BUILDING A BULLETPROOF BUSINESS CASE”.

Utilized and used by more than 100,000 companies in over 150 countries, including over half of the Fortune 100, IPAYABLES is the leading provider of advanced ELECTRONIC INVOICE, APPROVAL WORKFLOW, AND PAYMENT SOLUTIONS.

 

AVOID SUPPLIER FEES AND GUARANTEE SUCCESS

If you’re evaluating a few different PAYABLES AUTOMATION SOLUTIONS and the topic of SUPPLIER FEES hasn’t come up yet, then chances are the AP AUTOMATION PROVIDERS don’t want to talk about it. There are two different models of ACCOUNTS PAYABLE AUTOMATION that have developed.

The first was focused on making ACCOUNTS PAYABLE as efficient as possible that is, getting as many suppliers as possible to send electronic invoices.  This means no supplier fees.  Making your PAYABLES AUTOMATION solution free for suppliers makes SUPPLIER ADOPTION fairly straightforward.  This is a great model, but because all the costs are borne by the ACCOUNTS PAYABLE DEPARTMENT, the AP AUTOMATION SOLUTION PROVIDER has to be very efficient to keep that cost low.  After all, if the ELECTRONIC INVOICE costs more than what the ACCOUNTS PAYABLE DEPARTMENT is saving, why bother? The second model was developed by companies that couldn’t make the first model work. A pretty harsh statement, but in my opinion some of the AP AUTOMATION SOLUTION PROVIDERS just weren’t that efficient.  They were forced to charge way too much for their ACCOUNTS PAYABLE AUTOMATION SOLUTION and they weren’t making sales.  They decided that they could charge the supplier for the bulk of the price and still make a business case to the PAYABLES DEPARTMENT.  Not a bad idea if your suppliers have so much extra money that they don’t mind paying a few bucks to deliver an invoice.

However, most of the suppliers I know are pretty good at somehow moving any new costs back into the price we pay (if they’re not good at it, they go out of business, right?).  One of our clients estimated their average invoice cost the supplier would pay for this type of model was $15 per invoice (the AP automation provider they were looking at charged the supplier a percentage of each invoice).

At the end of the day, we’re talking about ACCOUNTS PAYABLE here.  AP is not a department where we ignore costs because we want to buy the impressive name.  A $15 fee per invoice is ridiculous.  Depending on your volumes, you should be able to find a high quality solution with high service levels for about $1 per invoice.  That should include services like free support and FREE SUPPLIER ADOPTION.  Look for high guaranteed uptime.

If you’re feeling adventuresome, ask them to guarantee the results in the contract.  How many invoices or suppliers do you need to feel your initiative was a success?  Just make them guarantee that number.  If they can’t guarantee success, why go with them?  And lastly, make sure they guarantee that there are NO SUPPLIER FEES.

 

IMAGING IS NOT ELECTRONIC INVOICING

There seems to be some confusion in the marketplace as to what is an ELECTRONIC INVOICE.  When we speak about ELECTRONIC INVOICE PRESENTMENT AND PAYMENT (OR EIPP), we are speaking about ELECTRONIC INVOICING, not having your supplier print out an invoice, mail it to you, you scan it, and then you email the invoice to your boss for approval.  Once approved, you get to key it into your ERP.

Many companies that rely solely on imaging as a way to “ELECTRONIFY” the invoice, are the ones who are perpetrating this confusion.  Their concept of taking a piece of paper and scanning it, makes it an ELECTRONIC INVOICE.  This is technically correct, but they are missing the real point of EIPP, getting rid of the paper and speeding up the process.  When a vendor emails a pdf, and then you get it and print it out, some would argue that since it was emailed, and went over the internet, that it was an internet invoice.

I completely disagree.  There are so many benefits to having a great ELECTRONIC INVOICING SOLUTION, such as not having to key in your invoices that are just not feasible with a classic scanning solution.  When we use the term “WEB INVOICING” it should mean so much more than that the delivery method was over the internet. A true ELECTRONIC INVOICE is not only created ELECTRONICALLY, like most invoices actually are, but remains in an electronic state, and DOES NOT NEED TO BE PRINTED.  If you are truly receiving ELECTRONIC INVOICES, you should not have to key in the invoice, just provide the approval and any relevant coding.

The beauty of ELECTRONIC INVOICES is that all of the work done by the supplier to get the information onto that invoice, was not wasted effort. Over 90% of all invoices could be described as “ELECTRONIC” if we just look at the fact that they are typically spit out of a computer in an electronic format, and sent to a printer, that takes the electronic data and prints it into something we all recognize as an invoice. I am willing to bet there are very few people that would argue that this is ELECTRONIC INVOICING. And if anyone would like to argue it, I will be at IOFM in New York in March.

INTERNET INVOICING is a great way to get invoices approved quicker, so suppliers can get their money quicker. All of this, and an ELECTRONIC INVOICE costs about a third to process as a paper invoice. E-INVOICING is here to stay, and I think that is what is making the imaging houses nervous. They know that their solution posed as an “E-INVOICE” is old technology that had a useful place in the market, but better solutions have arrived. That is why I am trying to get the world to think of ELECTRONIC INVOICES as an INTERNET INVOICE. This may help move us along and get rid of the posers.

 

ELECTRONIC INVOICING MORE THAN JUST IMAGING

Some people would say that I am confusing matters by speaking of INTERNET INVOICING and ELECTRONIC INVOICING in the same blog. To me they are the same, but you will find far fewer companies in the INTERNET INVOICING space compared to the ELECTRONIC INVOICING or even AP AUTOMATION space. I think that this is due to the imaging provider’s effort to disguise what they are doing, and trying to compete with companies like IPAYABLES that are truly offering PAPERLESS INVOICING or INTERNET INVOICING.

Companies like ARIBA, the company formerly known as XIGN, and of course IPAYABLES, are a few of the true INTERNET INVOICING organizations, and should not be lumped into a category that also includes companies that offer far fewer services, such as the companies that only take a piece of paper, and scan it into a data base.  Come see us at IOFM in March in the Big Apple!

 

AP AUTOMATION DONE RIGHT

Every innovation takes time to mature, to reach that point when everyone looks at the end result and says “That’s it”.  From that point the innovation often continues but it’s those salient mile markers that all agree mark the arrival of a product category, industry or process.  This has been seen over and over again in the personal computing world, first with desktops, then notebook computers, and now with the iPad and iPad 2 marking the arrival of the tablets.

ACCOUNT PAYABLE AUTOMATION has been searching a long time for the ‘right’ solution to the varied and numerous problems that face AP DEPARTMENTS. ERP vendors like ORACLE, SAP and PEOPLESOFT with their E-INVOICE products and initiatives each tried to streamline the PAYABLES process.  EDI SERVICES with their focus on the supplier’s and VAN networks brought a different dimension to the solution canvas and removed some of the friction but fell short.  IMAGING with its high tech hardware and fancy OCR templates promises to ‘AUTOMATE’ the paper, but as my friend Paul wrote last week, “IMAGING IS NOT ELECTRONIC INVOICING.” So what is the “right” solution?

Has ACCOUNTS PAYABLE AUTOMATION really arrived?  The Holy Grail of AUTOMATION is not just the handling of paper but the removal of it.  This has been the short coming of IMAGING, ORACLE INVOICE, SAP INVOICE and PEOPLESOFT INVOICE and many other schemes hoping to solve the AP riddle.  The ‘right’ solution includes the best aspect of it’s predecessors and marries that with original thinking and approaches. The WORKFLOW of SAP INVOICE, the connectivity of EDI services, the paper handling of IMAGING all fail individually but when merged with fanatical SUPPLIER ADOPTION, a deep understanding of the ACCOUNTS PAYABLE process and the reach of the internet magic happens. A web driven, supplier enabled, WORKFLOW AUTOMATED, highly visible and completely controlled AP PROCESS is the result.  Don’t settle for good enough. AP AUTOMATION can be done right.  And it can be done right now.

 

THE TRUTH ABOUT AP OUTSOURCING?

In regards to processing of ACCOUNTS PAYABLE, OUTSOURCING is generally not high on their lists of things to do this year. I would agree. I’m not one to take a whole department and outsource it to another company. The term OUTSOURCING generally has a ‘not-so-positive’ connotation associated with it and I would say that it also applies to ACCOUNTS PAYABLE OUTSOURCING. The ACCOUNTS PAYABLE DEPARTMENT serves a critical function in large organizations and OUTSOURCING the whole account payable group can put those companies at a disadvantage.

I believe that ACCOUNTS PAYABLE DEPARTMENTS can achieve the same cost saving but with greater benefits by taking advantage of the many tools and services that are available today. Just like the days of paper ledgers are essentially dead, the days of paper invoice, paper checks, and paper purchase orders nearing the end.  These tools and services can help you achieve your goals without having to do AP OUTSOURCING. Numerous services which are currently available which allow ACCOUNTS PAYABLE DEPARTMENTS to maintain all of the control, visibility, accuracy, speed and compliance they require while at the same time providing the additional advantages of cost savings, maintainability, flexibility and greater compliance with no capital costs.

These tools s can provide you features such as PURCHASE ORDER PRESENTMENT, ELECTRONIC INVOICE submission via a multitude of methods, PURCHASE ORDER MATCHING, INVOICE VALIDATIONS, WORKFLOW options to handle all of your exceptions, track able disputing, invoice approvals based on your companies specific needs and rules, DYNAMIC DISCOUNTING, INVOICE STATUS, INVOICE PAYMENTS via ACH or Corporate Card, etc. The economies of scale are such that you can get all the features of a Mercedes at the price of a Focus.

Most importantly with these services is that they will work with you as a partner and in addition to the features list, they provide the CONSULTING, VENDOR ADOPTION and SUPPORT SERVICES that really make the difference. So say no to ACCOUNTS PAYABLE OUTSOURCING and take a look a the tools and services available, by companies like IPAYABLES, which keeps ACCOUNTS PAYABLE in control and expands the value that your department provides.

 

ELECTRONIC INVOICING IN THE “CLOUDS”

A friend and I were discussing IPAYABLES and our ELECTRONIC INVOICING application, INVOICEWORKS, and he was asking if it was in the “CLOUD.”  I feel that the term CLOUD INVOICING refers to any ELECTRONIC INVOICING application that is a hosted solution and is accessed from the internet.  This is not necessarily the true technical definition of the CLOUD, but it is what most non IT folks think.

So my colleague asked “Where is the CLOUD?”  Now this is a little trickier.  If your IT department is not hosting your specific data, it is in the CLOUD.  It is being hosted by another company and you are retrieving it via the internet.  It is a nebulous concept without a specific location, hence the term cloud. There is not a single CLOUD for CLOUD INVOICING, just like there is not a single CLOUD in the sky. And more importantly, not all CLOUD INVOICING is the same.  They are all different to one degree or another.  Of course this elicited the following, “Well then how is INVOICEWORKS CLOUD INVOICING different?”  To this I answered the usual string of benefits such as common functionality like PO FLIP, NOTIFICATION ESCALATION, AD HOC REPORTING capabilities, ADVANCED DUPLICATE DETECTION, etc.

Then I decided to take it a step further.  I decided to speak to the fact that our application is covered under US Patent #6,826,542.  This is a patent that allows for the customization of an INTERNET INVOICE.  In general terms, it is the patent that allows one client to present their standard CLOUD INVOICE to their suppliers with their specific and customized fields and layout.  Another client will present their CLOUD INVOICE, through the same INVOICEWORKS application, with differing fields and layouts.

This may seem like a simple thing, but we hold the patent, and have for a long time.  We are not new to the CLOUD INVOICING game; in fact, we were in the game before anyone was referring to it as CLOUD INVOICING. With all of that said, we chatted about security of data, how maintenance is handled and a few other tid bits of information.  When I felt that he had heard all that he could handle, I finally told him to get his head out of the CLOUDS, and get his ELECTRONIC INVOICING into the CLOUD with INVOICEWORKS BY IPAYABLES.

 

DISCOVERING AP WORFLOW

We are back now to the wonderful world of INVOICE MANAGEMENT and WORKFLOW.

Just a quick recap on the why we do it:

  • ENFORCE BEST PRACTICES AND PROCEDURES
  • ACCELERATE PROCESS CYCLE TIMES BY AUTOMATING REPETITIVE TASKS
  • CHANGE BUSINESS RULES AND LOGIC WITHOUT REQUIRING IT RESOURCES
  • ENSURE ACCURATE DATA ENTRY OR DOCUMENT CREATION
  • MANAGE AND MONITOR PERSONNEL AND OPERATIONS PERFORMANCE

I like to think of INVOICE MANAGEMENT and WORKFLOW a bit like driving.  The rules of the road are well defined and everyone operates, the WORKFLOW that is, operates according to these rules.  Do you recall what it was like driving when the power goes off?  The street lights are out so, in general, it is much darker than normal.  The stop lights are also out, hopefully blinking red but not working as normal. You get to a big intersection with multiple turning lanes and it is just a bit confusing on whose turn it is.  Take this a bit further for those of you who have driven in a third world country and the confusion can go up ten-fold.  (Horns essentially replace brakes.  The biggest vehicle has the right of way.) Without this established WORKFLOW, things don’t move as smoothly or as quickly. Ok, but will just any WORKFLOW do?  I say the answer is no.

We have all seen or been conscripted to participate in those processes in INVOICE DOCUMENT MANAGEMENT which just don’t make any sense.  They seem to take way too long, involve a plethora of paperwork and bureaucracy and at the end of the day may or may not even accomplish what it was that we needed done.  We walk away from our current INVOICE MANAGEMENT activities thinking that there just has to be a better way.  (Remember the process and the paperwork associated with your mortgage?).

Now would it make sense to AUTOMATE a poor process into your new workflow?  Obviously not but all too often this is what occurs.  Taking a sub-par or bad process and implementing an AUTOMATED WORKFLOW based on it will essentially just produce the same bad results and more of them.  You may ask why more bad results?  The reason is that by now enforcing the sub-par or bad process, the alternate paths that people had been using to actually get things done could now be closed forcing them back into the process they had been working around, resulting in more issues.

The point is to review any process that you are going to implement into your IMAGING and INVOICE WORKFLOW. Eliminate the steps that were put in 10 years ago that make no sense today.  Review ACCOUNTS PAYABLE WORKFLOW best practices to improve upon what you are currently doing.  Reject the idea “We’ve always done it that way” and embrace “If it isn’t broke, improve it.”  Make it ‘Better, Faster, Smarter’. Something great happened a few months ago.  My garage flooded.  You may think I sound a bit crazy but it provided me the needed impetus to revisit my garage organization paradigm.  I took the opportunity to completely redo how everything was organized and I can honestly say I am much happier as a result.

At the end of the day, we all have areas, such as INVOICE APPROVAL WORKFLOW, which need some process redesign and are currently causing us pain (i.e. my garage) and we know the benefits but we put it off.  Take the opportunity of setting up WORKFLOW to review and change things for the better.  At the end of the day we all want a solution which puts us more in control of our jobs, makes our lives easier and helps make our organization, our bosses and ourselves look good.

 

E-INVOICING IMPROVES THE ENVIRONMENT AND YOUR EQUITY

As corporations struggle to improve their financials and increase their ROI’S it would benefit them to take a hard look at what a company can do to improve the environment.  Take these facts for example, based on each Invoice it takes one average tree to produce 2778 invoices.  With this information it is easily discernible that over a million trees could be saved if most of these INVOICES were transmitted ELECTRONICALLY.

With these savings over 83,000 barrels of oil and over 171 million kilowatts of electricity needed to produce the paper, would avoid 2.5 pounds of air pollutants and keep 138,000 yards of paper from eventually landing in the landfills. A few months ago Earth Day came and left us with several promises being made by corporations to help improve the environment.  Recently I researched some of these promises and found out the following information.  Walmart has signed a 500 million dollar agreement that would “reduce greenhouse gas emissions, build more energy efficient stores and reduce packaging waste.”

Microsoft has also has become more environmentally efficient.  They are installing solar power energy cells that would produce enough power for 500 homes. Several companies have not only seen the value of becoming environmentally efficient but also the value of E-INVOICING and how it can improve their financials. Many of the corporations that do ELECTRONIC INVOICING have commented on how easily the change can take place.  A lot of them have said that the WORKFLOW has gone from sometimes waiting days to retrieve records that were archived off site, to accessing the same files in two or three seconds — saving time, creating efficiency and improving customer service.  An initial outlay of several thousands of dollars is well worth it. For every dollar that they spend, they save a dollar plus another 85 cents.

In a recent interview with one of those companies a CEO, talking about reducing paper in their office said, “I wouldn’t call it the paperless office — that’s not going to happen for a while, but the less-paper office IS here to stay.”

 

AP AUTOMATION IN 2012

So the New Year is upon us and we have a couple of weeks already checked off on the calendar. ACCOUNTS PAYABLE DEPARTMENTS all over are wrapping up 1099s and closing out the year if their fiscal calendars align. In the back of your mind are the goals for the next year. You’ve survived one more year with the mountains of paper. You’ve held together with paper clips and chewing gum a department stretched to its limit. This year really should be different. But how. The options can seem vast and wide and deep. Should you implement WORKFLOW in SAP INVOICE or ORACLE? Should you build a vendor portal? Should you push for EDI from every supplier? Should you partner with an INVOICE AUTOMATION PROVIDER? The answers are “maybe”, “no”, “probably not” and “absolutely.”

There are plenty of environments where SAP, PEOPLESOFT, or ORACLE WORKFLOW are the perfect solution.  Integrated in to SAP INVOICING, PEOPLESOFT INVOICING or ORACLE INVOICING these WORKFLOWS can reduce approval time, ease tracking and provide visibility.  You still have to figure out how to get paper into these WORKFLOWS, but it’s at least half the problem. You should definitely not build a vendor portal.  There is enormous value is providing your suppliers visibility and access online.  But unless you are willing to front end your AP process online and allow suppliers to submit invoices you’re not going to get a very rapid return on investment, if at all. EDI from everyone?  Really not 2012 kind of thinking.  EDI is great in a select number of situations. That’s it. If you’re Walmart or The Home Depot maybe you can push the EDI envelope, otherwise, forget about it.

Partnering with the right INVOICE AUTOMATION PROVIDER is the smart choice in 2012.  With the best providers including WORKFLOW, EDI SERVICES with connections to EDI VANS and online access for your suppliers, the right provider can bring the perfect blend of technology and services to the table.  Matched to your existing ACCOUNTS PAYABLE PROCESSES and up in running in a matter of weeks, the right partner can help you make the most out of 2012.

Of course IPAYABLES is just such a partner. I know of a company that receives 99% ELECTRONIC INVOICES.  They are so large that they still are processing over 400,000 paper invoices a year.  With that volume, they are a perfect candidate for our ACCOUNTS PAYABLE AUTOMATION application!

 

2011 – AN ELECTRONIC INVOICE REVIEW

2011 is now in the rear-view mirror and 2012 looms large before us. Many companies embraced ELECTRONIC INVOICING in 2011, especially those looking to leverage the internet and more advanced AUTOMATION options. EDI SERVICES continued their traditional role in the manufacturing and retail worlds, delivering a decent number of EDI INVOICES but only to a limited number of suppliers and partners. The big ERP software providers pretty much sat out 2011 with ORACLE INVOICE and SAP INVOICE offering no new ideas or capabilities. Some innovative partners have tried to move these services to the cloud, but adoption and pricing is murky. PEOPLESOFT INVOICE didn’t move much as ORACLE focuses on its core productions and tries to secure its position in a changing software environment. There was some interesting acquisitions as Ariba purchased European E-INVOICE provider B-Process, but nothing like the EIPP buying frenzy of 2007.

So what did the most forward looking companies do in 2011? They selected established, capable partners to drive efficiency and control in ACCOUNTS PAYABLE. As a result many ACCOUNTS PAYABLE DEPARTMENTS increased in visibility and stature. Many AP MANAGERS rose through the ranks and enjoyed the spotlight for bringing AP in to the 21st century. These companies did their homework and selected an ELECTRONIC INVOICING partner that had a track record of delivering the needed tools and services needed to ensure success.  In many cases the partner selected was IPAYABLES.

So here is to 2012.  Live a little.  Push the boundary a bit.  Move outside of the comfort zone just a smidge.  Dive on in.  The water is just fine. Join with us on an ELECTRONIC INVOICE adventure. You’ll be glad you did.

 

ELECTRONIC INVOICING IN 2013

Now that we are in the midst of 2013, I wanted to share what is happening in the ELECTRONIC INVOICING market space.  I see that there will be great advances in the amount of reporting from invoices that were submitted electronically.  Think about it, when a vendor submits an ELECTRONIC INVOICE, there is a wealth of data on that E-INVOICE that you should be able to analyze.  One of our customers (One of the World’s Largest Restaurant Chain) is using our AD HOC REPORTING to see how often certain ovens are repaired versus replaced. This gives them the ability to make decisions on whether they should purchase or replace that oven.

They are also using it to analyze localities and repair rates.  All of this information is available due to ELECTRONIC INVOICE submission, and advanced querying capabilities in our application.  Many ELECTRONIC INVOICING applications have reporting, but the ability to actually search the data on the invoices and make business decisions, has not been universal in its implementation in the industry. Another activity in the New Year will be a renewed sense of VENDOR ADOPTION in the ELECTRONIC INVOICING arena.  Many companies have gone with the dump and run approach in selling E-INVOICING.  They get you up and running (hopefully in less than 4 months) and then they are off to the next account, leaving AP individuals to try to become VENDOR ADOPTION experts or have the project fail.  I think there will be a shift to a more hands on approach like IPAYABLES has.

With the industry seeing that we are averaging 70% vendor submission of ELECTRONIC INVOICES within the first year, they really have no choice but to come around and become advocates of VENDOR ADOPTION, and stop charging their customers for activities that are so vital to the success of an ELECTRONIC INVOICING initiative! The final thing I think we will see is more payment options around ELECTRONIC INVOICING.  It only seems natural that people will want to submit an ELECTRONIC INVOICE, and then have the customer able to pay that ELECTRONIC INVOICE, electronically. I wish you all a Happy and Prosperous New Year!

 

THE GROWTH OF PAYABLES AUTOMATION SYSTEMS

I recently read an article discussing the GROWTH OF PAYABLES AUTOMATION SYSTEMS.  The article suggested the use of PAYABLES AUTOMATION SYSTEMS would grow 32% by 2016. Research firms have been predicting rapid growth of PAYABLES AUTOMATION for quite some time now, but the scale of the growth now seems to be hitting the mainstream ACCOUNTS PAYABLE DEPARTMENT. That’s good news for PAYABLES DEPARTMENTS that are usually a bit more conservative than other groups.  Although it’s still looked at as new technology, IPAYABLES has been offering PAYABLES AUTOMATION SOLUTIONS since 1999 with large customers like AMERICAN AIRLINES using the technology for more than a decade now. So the PAYABLES DEPARTMENT that is considering AP AUTOMATION can feel a bit more comfortable that many of these solutions have been around for a long time now and have a good track record with reference-able clients.

PAYABLES AUTOMATION SUPPLIERS are becoming more popular and more competitive.  Providers who once offered only a small portion of functionality have a more complete offering than before.  The pioneers of PAYABLES AUTOMATION are creating functionality that goes beyond the basics and have some really fun aspects of their solutions.  All in all, it’s an exciting time to be implementing PAYABLES AUTOMATION. If you’re ready to start researching an AP AUTOMATION project, I would suggest a few guiding principles:

  • TALK TO A FEW PROVIDERS (INCLUDE IPAYABLES, OF COURSE) TO UNDERSTAND THEIR PAYABLES AUTOMATIONSOLUTION BEFORE YOU START LISTING WHAT YOU’RE LOOKING FOR.  WE HAVE MANY PEOPLE WHO WILL BUILD A PROJECT AROUND A COUPLE OF REQUIREMENTS, FORM A PROJECT, AND THEN DISCOVER THAT THERE IS A LOT MORE TO PAYABLES AUTOMATIONTHAN THEY ANTICIPATED.  IT IS VERY COMMON TO HAVE A PAYABLES AUTOMATION PROJECT THAT IS LOOKING FOR ONLY SCANNING ANDWORKFLOW.  WHEN THEY DISCOVER THE ELECTRONIC INVOICING, MATCHING, DYNAMIC DISCOUNTING AND COMPREHENSIVE NATURE OF A TRUE PAYABLES AUTOMATION SOLUTION, THEY SOMETIMES FEEL LIKE THEY NEED TO START THE PROJECT FROM SCRATCH.
  • LOOK FOR AN ENTERPRISE-WIDE SOLUTION (AND PREPARE OTHERS FOR IT).  YOU MIGHT BE TEMPTED TO GO WITH A SOLUTION THAT DOESN’T IMPACT THE ORGANIZATION, SOMETHING YOU CAN QUIETLY IMPLEMENT WITHOUT DISTURBING ANYONE.  HOWEVER, PAYABLES AUTOMATIONDOES CHANGE HOW THE ENTIRE BUSINESS DOES PAYABLES.  YOU CAN’T TRULY CHANGE HOW THE ENTIRE BUSINESS DOES PAYABLES WITHOUT IMPACTING THE ENTIRE ORGANIZATION.  YES, YOU WILL HAVE PEOPLE WHO LIKE SIGNING THEIR NAME TO APPROVE AN INVOICE AND THEY MIGHT COMPLAIN ABOUT CHANGE, BUT AUTOMATION IS CHANGE.  CHANGE IS THE GOAL.
  • BE PREPARED TO CHECK REFERENCES.  SOME SOLUTIONS ARE A BETTER FIT FOR YOUR ORGANIZATION THAN OTHERS.  TALK TO A COUPLE OF THEIR CLIENTS TO SEE HOW THEY USE THE PAYABLES AUTOMATIONSOLUTION.  ASK WHAT THE PAYABLES CLERKS THEY HAD BEFORE THEY IMPLEMENTED ARE DOING NOW.  (IF THEY STILL HAVE THE SAME CLERKS DOING SIMILAR WORK, THEN THEY REALLY DIDN’T AUTOMATE ANYTHING).  TALKING TO A SOLUTION PROVIDER’S CLIENTS MIGHT BE DIFFICULT, BUT IT IS REALLY IMPORTANT.  DON’T SKIP THIS STEP!

There are other items to consider, but the above bullet points are things that I’ve frequently seen missed.  If you have PAYABLES AUTOMATION on your list of New Year’s resolutions, then be excited about it.  It’s a great time to automate your PAYABLES DEPARTMENT!

 

AP WORKFLOW – A LITTLE GOES A LONG WAY

Like many best practices, moderation is the best implementation practice.  Instead practitioners take the “if a little is good, a lot must be great” approach and end up drowning in the thing that was supposed to make life easier. This is often the case with ACCOUNTS PAYABLE WORKFLOW.  The promise of being able to route invoices electronically paints a sparkling picture of documents zipping around the organization at light speed, all under the watchful eye of ACCOUNTS PAYABLE. This is exactly how WORKFLOW is supposed to work but often, given the ease of manipulating the WORKFLOW routes become too complex or AP becomes a bottleneck in the flow.

The first problem of complexity usually comes about because insufficient attention is given to exceptions.  Instead of addressing an underlying business process problem related to exception handling the “just add another rule” mentality leads to a maze of conflicting and often compounding WORKFLOW rules.  The awesome ability to direct the flow invoices on the fly is now the source of many problems. ACCOUNTS PAYABLE sometimes take the somewhat opposite approach.  “The field is too busy/stupid/lazy to properly handle these invoices. We’ll take care of it.” Routing every INVOICE to AP in organizations of any significant size is the death nail of workflow. Out the window go 90% of the benefits and efficiency that might have been gained. Of course there are plenty of reasons INVOICEs get routed to AP. Yes new rules are needed to handle those special cases.  The road to logjam is paved with good reasons. Follow these simple rules to make sure your ELECTRONIC WORKFLOW delivers:

  1. Follow the 80/20 rule.  Maybe even 95/5.  The vast majority of invoices should enter the organization using a simple key. Either Requestor, Buyer, Location or some other value that the supplier may know. Relate this key to the starting point in the organization. Don’t start INVOICESin AP and send them out from there.
  1. Utilize some kind of hierarchy to advanceINVOICES along the route as needed for additional approvals.  This may be reporting structure based or business based. Again, 80% of invoices should follow this structure without fail.
  1. Utilize a matrix of approval limits to determine when an INVOICE is finally approved for payment.
  1. Limit APreview of INVOICES to actual trouble suppliers, business units or spend.

Of course, AP WORKFLOW included in IPAYABLES INVOICEWORKS helps enforce all of these best practices and includes all the bells and whistles (Vacation Reroute anyone?).

 

TAKE CHARGE OF YOUR FUTURE, OR LOSE IT AP AUTOMATION VS PROCURE TO PAY

Every customer using IPAYABLES INVOICEWORKS has one thing in common; they are in control of the function they provide to their organization.  Not only do they understand well the benefits they provide (as I believe most payables managers do), but they have the clout and respect needed to control the future of that function on behalf of their company.

A PAYABLES DEPARTMENT that has implemented AP AUTOMATION (aka ELECTRONIC INVOICING, INTERNET INVOICING, EIPP, or pick your favorite buzzword for automating the paper invoice process) have their house in order. The per-invoice processing cost is low, visibility and control is high, and generally they are viewed in a very positive light by the organization. They are in control of their function.

A PAYABLES DEPARTMENT that still receives a lot of paper invoices is still dealing with paper related problems and the associated high costs.  In that case, a procurement department may look at a PROCURE TO PAY solution (PURCHASE TO PAY, PROCUREMENT TO PAY, ETC.) and feel that they might be able to do a better job at payables than the PAYABLES DEPARTMENT.  In some aspects, they are probably right. A PROCURE TO PAY solution will automate that process for those invoices coming from procurement and will eliminate paper related problems.

The problem (at least for the payables manager’s career) at that point is PROCUREMENT becomes the owner of an AUTOMATED PAYABLES process and payables becomes a subset of PROCUREMENT. This works for some companies (perhaps those where 90% of invoices come from purchase orders), but for most companies, payables is a separate group for a good reason.

The wiser move is for the PAYABLES MANAGER to AUTOMATE the payables processes today (preferably with IPAYABLES INVOICEWORKS). With the paper related problems gone, there is very little reason for PROCUREMENT to want to take over payables processes.  Payables is efficient and can provide much better payables expertise than PROCUREMENT in managing suppliers, payments, and all the associated processes and regulations. Don’t get me wrong, I like PROCUREMENT and the function they provide. However, I know the value that payables groups bring to organizations and I hate the thought of PROCUREMENT taking over that area only because a payables group didn’t get around fast enough to selecting a payables oriented automation solution.  My advice to the PAYABLES DEPARTMENT: take charge of your future or lose it.

 

E-INVOICING IS LIKE FINDING MONEY IN THE CUSHIONS

Have you ever been moving around furniture or trying to find the remote between the cushions and found other, unexpected things? Sometimes it is a pleasant surprise like a cell phone vibrating where no one could hear it, a missing wallet or enough change to buy a sundae.  Other times the surprise is less inviting like an empty Doritos bag of your son’s, a school of fish (the crackers) or sandwich from the playground.  Whether pleasant or not, I would say it is a good thing.  You’ve ‘cleaned house’ and things are better.

ELECTRONIC INVOICING has some of the same ‘cleaning house’ benefits which are good to help your department and company.  I have had the benefit of being in the front row and participating with some of these benefits as customers have both prepared and gone live with their ELECTRONIC INVOICING initiatives.  To highlight just a couple areas:

‘Actual’ WORKFLOW processing:

  • COMPANIES DISCOVER HOW INVOICESARE ‘REALLY’ PROCESSED AND APPROVED IN THEIR COMPANIES.
  • WORKFLOWS THAT STILL SHOW USERS APPROVING INVOICESTHAT NO LONGER WORK AT THE COMPANY OR HAVE CHANGED POSITIONS, OR PAPER-BASED FLOWS THAT DON’T PROPERLY REFLECT COMPANY’S ACTUAL CONTROLS.

VENDOR and/or PURCHASE ORDER information not as clean as you expected:

  • 14 ACME VENDORSWITH ALL THE SAME INFORMATION WITH INVOICES APPLIED TO MULTIPLE ACCOUNTS
  • VENDORSWHO HAVE NOT SUBMITTED INVOICES SINCE CLINTON WAS PRESIDENT
  • PURCHASE ORDERSCREATED AFTER INVOICES ARE RECEIVED
  • PURCHASE ORDERSMISSING DESCRIPTIONS OR ASSIGNED TO OLD OR INCORRECT VENDORS

ELECTRONIC INVOICING helps companies identify areas that may be holding them back, causing delays, frustration or productivity issues, and provides tools to either eliminate, resolve or minimize these surprise discoveries. Companies can now have better controls and simplification of what otherwise could be out of control or overly complex processes. Better, cleaner data means fewer calls from vendors regarding purchase order discrepancies or duplicate payments to the same vendor with multiple vendor numbers. One of the things I enjoy most about working with various companies is helping them solve problems and discover better ways of doing things. You too can find those hidden items in your cushions and with E-INVOICING realize the extra benefits of a ‘cleaner’ and better running house.

 

E-INVOICING – NO SUPPLIER FEES

There are many aspects that should to be considered when running a successful ELECTRONIC INVOICING initiative. Including a SUPPLIER ADOPTION PLAN that will help keep adoption rates at a maximum level is paramount.  This can be done with an effective policy concerning suppliers.  With a dedicated SUPPLIER ADOPTION TEAM the transition for suppliers becoming an effective user can be smooth with training support for suppliers at virtually no cost.

The biggest setback that Corporations have is an initiative for E-INVOICING that brings suppliers on board with a proficient SUPPLIER ADOPTION PLAN. When implementing a successful E-INVOICING initiative it is highly recommenced that suppliers have NO SUPPLIER FEES for submitting their invoices. A no charge supplier policy will help to increase your SUPPLIER ADOPTION RATE. By charging the suppliers and loading up on implementation fees Corporations are limiting the opportunity for future growth.

Suppliers need to be able to have options that will improve their efficiency. The end results are being able to provide suppliers the largest range of tools for ELECTRONIC INVOICING.  As suppliers are able to identify those tools and options the opportunity for an ADOPTION PLAN to becoming a success can be realized. According to a recent study conducted by IPAYABLES, IPAYABLES surpasses major competitors in the area of number of vendors adopted per customer.

The research compared the published number of vendors and customers for major players in the PAYABLES AUTOMATION field. The study shows over 3,350 SUPPLIERS per customer participating in the IPAYABLES INVOICEWORKS ELECTRONIC INVOICING solution. The next closest competitor in the study shows only 620 SUPPLIERS per customer.

 

50% ADOPTION RATE, NOT JUST A DREAM

I was chatting with some folks this week, and we were talking about ELECTRONIC INVOICING, and the vendor adoption rates that are associated with E-INVOICING. I was stating how IPAYABLES averages over 70% of INVOICES being received electronically within the first year of go live, and the people were shocked.

They had been to an ELECTRONIC INVOICING forum the other week and they heard that in the EU, 20% adoption of ELECTRONIC INVOICING was standard. They were surprised and thought that it must be even lower in the states because so many people were touting how well Europe has embraced E-INVOICING. In the good ole US of A, we hold ourselves to a much higher standard. It is not enough to just implement an ELECTRONIC INVOICING solution and call it a day.  No, we must get the vendors to stop printing invoices and send them electronically (hence the term ELECTRONIC INVOICING).

If they are printing paper, we have not succeeded and we will continue to strive as a nation to save our trees and resources and provide ELECTRONIC INVOICING to the masses. Now sure it is just a few days before the fourth of July, so I may be a tad American centric, but with where our postal service is headed, I think the less we need to rely on it the better. Let’s make sure that we are doing all that we can to eliminate the paper process and go to true ELECTRONIC INVOICING, and not be satisfied with puny adoption rates, or adoption rate$ (that is when an e-INVOICING provider charges the suppliers for the right to send you an invoice).

So, good for you for thinking about ELECTRONIC INVOICING, and good for you for actually going about finding the correct E-INVOICING provider, but don’t be fooled by those who tell you that VENDOR ADOPTION RATE will be less than 50%, or that it is up to you to do your own VENDOR ADOPTING. That just sounds un-American to me.

 

ELECTRONIC INVOICING AND 70% ADOPTION RATES

I was speaking with someone who read my previous blog on ELECTRONIC INVOICING ADOPTION RATES, and they asked me if the 70% figure that I used in the blog was real or was it simply marketing hype.  I let them know that 70% is not only achievable, but it is our average ADOPTION RATE for the first 12 months of go live from ELECTRONIC INVOICING IMPLEMENTATION.

We have had customers reach 100% of their internal goal within a year.  Obviously when speaking of averages in the ELECTRONIC INVOICING world, there are ups and downs.  One of our clients took 3 years to get to 85% of their invoices coming in electronically, but they are the exception, most achieve this much quicker.

Ultimately, the point I was trying to make was that ELECTRONIC INVOICING is exactly that, ELECTRONIC INVOICING.  It is not SCANNING or SENDING PDFS via email.  If you are committed to going with an ELECTRONIC INVOICING provider, make sure that they can achieve the goals that you have set out, and are not simply window dressing!

 

ELECTRONIC INVOICING IS ONLY A PIECE OF EIPP

I have been spouting off for a while about the virtues of ELECTRONIC INVOICING.  I have stated how ELECTRONIC INVOICING can make an AP DEPARTMENT, and a whole organization, much more efficient as well providing for a better planet for our children. EIPP is ELECTRONIC INVOICE PRESENTMENT & PAYMENT. With ELECTRONIC INVOICING, invoices are presented, coded and approved in a very rapid fashion.  This enables a company to be able to view there liabilities and accruals much farther out than they were able to before.  It also enables them to have the ability to take discounts like never before as well!

Being able to have better insight and control of your payments is the oft overlooked benefit of EIPP.  DYNAMIC DISCOUNTING can be a huge boon to an organization that is cash rich, and the ability to change that discounting rate puts control in the Treasurers hands, which they love.  For organizations who are not cash heavy, (or who are straight out cash strapped) PAYMENT CARDS are a great vehicle to further enhance the roll of ACCOUNTS PAYABLE, and is another benefit to EIPP.  EIPP, if done right with a provider like IPAYABLES, can have invoices approved in less than 5 days as an average.

When INVOICES are approved that fast, SUPPLIERS are more apt to accept card as a payment because they are getting their funds quicker, and they are guaranteed the payment.  Certainly not all vendors will take card, but there definitely is a subset of your VENDOR base that will.  You get to use the card as float, and get a nice rebate to boot!

EIPP, ELECTRONIC INVOICING & PAYMENT, will elevate the stature of the ACCOUNTS PAYABLE DEPARTMENT in an organization.  If done with the correct group, it will open up various options for your organization that could never be dreamt of with paper processing.  This is the wave of the future folks, it is time to get on board!

 

IPAYABLES 2012 USER CONFERENCE

This week we had our 2012 User Conference in Dana Point, California.  Laguna Cliffs Resort is a pretty nice place, on the bluffs in Dana Point overlooking the ocean.  Weather was perfect and we enjoyed a nice dinner at the end of the conference.

We set aside some time during the conference to talk about new ELECTRONIC INVOICING functionality and upcoming enhancements to our PAYABLES AUTOMATION solutions, but most of the time was devoted to user discussions. Users discussed Change Management strategies and there was quite a wide array of ideas on how best to implement ELECTRONIC INVOICING and APPROVAL WORKFLOW in large organizations. VENDOR ADOPTION strategies also varied widely, from contractually requiring ELECTRONIC INVOICING and withholding payment from non-compliant suppliers to much softer approaches.  A discussion of Ad-hoc reporting allowed users to discuss what reports other companies had created and how they were using the ELECTRONIC INVOICING DATA, from AUDIT COMPLIANCE to DISCOUNT TRACKING to EMPLOYEE APPROVAL times.  A discussion of DYNAMIC DISCOUNTING and CARD PAYMENTS allowed users to compare the mix of payment options other users were using based on their organization’s cash position.

The conference concluded with industry break-out sessions where users discussed functionality specific to their industry and added input on what might be beneficial future additions. To those who attended, a heart-felt thank you for your contributions.  To those who didn’t, let me know if you want notes from the conference.  The discussions were quite valuable.

 

MOVING YOUR INVOICES INTO THE CLOUD

It seems like you can’t mention a technology or business topic without someone suggesting you move it to the CLOUD.  PUBLIC CLOUDS, PRIVATE CLOUDS, private clouds inside PUBLIC CLOUDS, it really is getting a bit ridiculous. It is unfortunate that the hype obscures the benefits and the problems with any given approach and makes the decision process unnecessarily painful.

So what does this have to do with INVOICING?  Can you really move your INVOICING into the CLOUD?  The answer is a bit complicated but the short of it is “sort of”.  For my purposes today we’ll limit the definition of “CLOUD” to mean those internet based set of virtual server and storage resources offered by the likes of AMAZON, MICROSOFT and ORACLE.  These resources can then be utilized by other software or service companies to build and host applications that actually do things – like INVOICING – on the internet.

Are there companies that AUTOMATE ACCOUNTS PAYABLES built on these CLOUD SERVICES? Maybe?  Kind of?  Not really?  One company did tout at the recent IFO FUSION CONFERENCE that they use MICROSOFT’S AZURE CLOUD SERVICES but I’m not sure how that helps them automate the invoice process. CLOUD SERVICES are used because they scale rapidly, they are efficient in the sense that you only pay for what you need as a consumer and they are supposed to be rock solid reliable. But…both MICROSOFT and AMAZON have had major outages in the last 18 months. IPAYABLES on the other hand, has not.  When we started the company in 1999 the buzzword was ASP – APPLICATION SERVICE PROVIDER.

Then came SAAS – SOFTWARE AS A SERVICE.  Now ASP and SAAS are out and CLOUD is in.  But they really are different things.  Can you move your INVOICES into the cloud?  You could certainly try. Instead automate your invoicing process with the tried and true leader of INVOICE AUTOMATION.  On the internet since 1999, solid, fast, reliable technical services with hands on, knowledgeable and capable people services built to automate every vendor and every invoice.  If it helps, you can tell your friends your INVOICES are in the CLOUD.

 

E-INVOICING, E-SCANNING, EDI OR E-PROCUREMENT: WHAT’S THE ANSWER?

Corporations are looking for a number of ANSWERS about running their business more efficiently. Dealing with invoices and how they are processed has become a major topic.

KEN VIRGIN CEO from IPAYABLES was asked about his opinion on this subject-matter.  Here are some of his responses. “Some of the common technologies that have adopted the term “ELECTRONIC INVOICING” include traditional EDI, SCANNING SOLUTIONS, E-PROCUREMENT and AUTOMATION SOLUTIONS.”

“Many accounts payable managers who presenting proposals for full automation and elimination of paper are met with resistance from IT departments that claim, “We already do ELECTRONIC INVOICING with EDI, just tell your suppliers to do EDI”; or from procurement departments that have an E-PROCUREMENT solution they feel eliminates all invoice processing (while, depending on your company, it may only affect 15% of paper being handled by your accounts payable department); or the SCANNING provider who promised everything would be electronic, but in reality just moved your clerks from data entry to SCANNING.”

E-SCANNING.

“It is often hard to justify the up-front costs in equipment and the team of SCANNING employees required when those efforts are so easily outsourced for so much less. The only time this would really make sense is when low skilled labor is a core competency of your company.” EDI “For some companies, EDI is enough of a solution.  Such companies can mandate compliance and they don’t have too many small suppliers where EDI would create a burden.  They also have a complex system setup internally to properly process all of the invoices without too many exceptions.  For the company that has the right supplier base and the IT team to support it, EDI can be very economical.”

E-PROCUREMENT

“For companies where most all payments have  a purchase order associated with it, the PAYABLES DEPARTMENT is usually absorbed by the purchasing department and an E-PROCUREMENT solution can in theory, eliminate the PAYABLES DEPARTMENT altogether (or at least this is the vision of the purchasing manager).” Oftentimes, the payables department continues to process just as much paper as always, but gets shot down every time they mention payables specific solutions because the E-PROCUREMENT SOLUTION is “almost there”. But for those organizations that really have moved purchase order processes throughout the entire organization (value still debated), E-PROCUREMENT can be very effective.”

“When I hear the term ELECTRONIC INVOICING, or INTERNET INVOICING, I think of the supplier entering or uploading invoice data into some form of vendor portal or network solution (at least as it pertains to the receipt of INVOICES in PAYABLES DEPARTMENTS). These solutions are very payables focused and aim to eliminate paper completely from the PAYABLES DEPARTMENT.”

“They provide or tie into WORKFLOW systems and MATCHING systems to AUTOMATE most manual functions while recognizing the role of the PAYABLES DEPARTMENT in controlling those functions. Tie real ELECTRONIC INVOICING with outsourced scanning (for the remaining paper invoices) and you have a completely PAPERLESS PAYABLES DEPARTMENT with all the controls.  Most of these providers call themselves PAYABLES AUTOMATION.”

 

ARE YOU READY FOR E-INVOICING?

Today’s post will be centered on being prepared and ready for the day that E-INVOICING will become a part of your world (if it hasn’t already). Recently a question was asked to several ACCOUNT PAYABLE MANAGERS, “What was the turning point with your department when you started to see success with your E-INVOICINGIMPLEMENTATION?” FTE (Full Time Equivalent) reduction during ramp-up was realized, was one of the prominent answers.  Another words due to reduction of staffing the company was able to save money.

One of the classic responses  that I chuckled about, was the answer that I got form one manager that said, talking about why his department decided not to do ELECTRONIC INVOICING, ” they are not willing to start E-INVOICING. They feel that they will be losing control if they are not able to touch the paper that is drowning the AP DEPARTMENT.” Another question that was asked was, “what are some of the challenges that you deal with to become PAPERLESS? Answer from a Controller said, “the challenges for my company is having supervisors, managers and department heads unaware of what it really takes to process AP and how it can be done with logical controls.”

Here a few of success stories that I wanted to share.  One from a Healthcare Company. “Besides the cost savings, our staff will be able to devote more of their time to our patients which is our top priority.” Another from a Hospitality Company. “Making payments used to be time consuming.  We had to manually create tasks, use SMART cards etc. Now, as soon as we get the go-ahead from clients, we click a few buttons and have confirmation in minutes. The key benefit of AUTOMATING our payments process has been the amount of time saved, especially at the month end, when we can process up to 350 payrolls in an afternoon.”

Again I pose the Question.  Are You Ready for E-INVOICING?

 

THE END IS NEAR FOR AP OUTSOURCING

I was reading a blog by Vinny Patel today about how the SAP purchasing of ARIBA may spell the end for AP OUTSOURCING. (My initial question has to be will this purchase be handled by the ARIBA NETWORK, and who will be footing the enormous fees associated with anything going through Ariba) I think that this may be a dramatic over simplification of the impact of this deal, but the crux is accurate, AP OUTSOURCING is not a cutting edge or even best practice any more. The same can be said about folks calling scanning ELECTRONIC INVOICING.

AP OUTSOURCING had its place in business; it is just that the time has come where it is no longer relevant.  When manual processes are too costly for organizations, the first inclination is “Can someone else do this for less?”  And next is the question of “Can technology fix this?” When there is enough critical mass in the marketplace, technology will come and save the day. This is what has happened with AP OUTSOURCING and ELECTRONIC INVOICING. AP OUTSOURCING was a solution to a problem, dealing with the high cost of labor, and ELECTRONIC INVOICING is the solution to AP OUTSOURCING, getting rid of the paper in the first place.

The funny thing is hearing someone refer to ARIBA and its INVOICE MANAGEMENT tools as the solution. In my opinion, charging suppliers to invoice you is a way to ensure lousy vendor adoption rates. One of my clients recently remarked that if she had her vendors submitting invoices through the ARIBA NETWORK, it would cost the suppliers over $15 per invoice!  That is insane, and probably why IPAYABLES has such a great vendor adoption rate (at NO CHARGE to the customer mind you) and such high customer satisfaction. AP OUTSOURCING was a great tool, its time has just run its course, and there are better, less expensive and much easier to maintain solutions in the market today, and of course the most effective is IPAYABLES

 

AND ANOTHER ONE BITES THE DUST

Those who look into the crystal ball and try to divine the future really only have to turn around and look over history to foretell what’s coming. The names are different, the places different and sometimes there is an interesting twist or two, but history really does repeat itself.

The IPAYABLES CEO Ken Virgin discussed last week how the absorption of ARIBA into SAP would NEGATIVELY IMPACT THE E-INVOICING MARKET. Today I want to explore how ARIBA’S death as an independent company may affect current and future customers.

A lot of that impact is determined by SAP’S true motives in buying ARIBA. Are, as stated by SAP, they truly looking for a company that has the technical know-how and experience to deliver cloud based services to enterprise customers?

Does the value of ARIBA to SAP lie in the supplier network or in the data exchanged on the network? Are the tools and services offered by ARIBA excellent extensions of the software already offered by SAP, expanding the depth and breadth of SAP’S reach?

Unfortunately only the last option offers any hope that the value customers once sought from ARIBA will continue. Our friend History is full of examples of the failed grafting of organizations together; include mergers in the AP AUTOMATION space. Large Company A buys Small Company B and within a few years there isn’t any trace of the vision, innovation or spark that brought success to ACCOUNTS PAYABLES DEPARTMENTS and businesses as a whole. Customers are either left holding the bag or figure out that Large Company A isn’t the same as Small Company B and looks elsewhere for their AUTOMATION needs.

SAP will probably get what it wants or needs out of the acquisition, but what customers of ARIBA will get is less certain and if history is an indicator it won’t be great. Oh yeah, almost forgot to mention that ORACLE finally released their CLOUD Apps/Solution/Environment/Architecture/Kitchen sink stuff this week. Of course they acted like they invented the internet and the cloud and no one could do it right before they came along (Salesforce anyone?).

Anyway, there wasn’t anything in ORACLES announcements that I saw that indicating they were moving ISUPPLIER more into the cloud or offering a better ACCOUNTS PAYABLE AUTOMATION service. ORACLE is great at software, but don’t get fooled into thinking that an ERP tool – of any variety – will AUTOMATE ACCOUNTS PAYABLE by itself. But that’s a topic for another day…

 

PAYABLES AUTOMATION/EIPP. JUST DO IT!

About five years ago, a large PAYABLES group was searching for an ELECTRONIC INVOICE PRESENTMENT AND PAYMENT (EIPP) solution and selected our competitor.  They paid a large IMPLEMENTATION FEE, high monthly and per INVOICE FEES, but the competitor had a decent product and they were able to reduce the paper in their PAYABLES department and gain efficiencies and overall cost reductions.  At a certain point, the payables group felt it was prudent to look for a different EIPP solution and after a rigorous selection process, they selected IPAYABLES.

After switching to IPAYABLES, they were very happy with the fact that the fees were so much less, there was more functionality and the service levels were higher.  But were they sorry that they had originally selected the other EIPP provider? No.

Even though the other provider had been more expensive and had less functionality, the solution had reduced much of their paper.  They had reduced costs and increased visibility.  They agreed it wasn’t the best choice, but it was still a good choice.

So why would I tell you that some of our competitors are still a good choice?  Because it’s just the truth.  Yes, I think we’re a better choice and have a lot more to offer, but there are too many PAYABLES groups that are afraid to make any choice.

Granted, it’s a pretty big decision.  Some solutions are fairly expensive and all of them should be very high profile projects.  But making a good choice, even if it’s not the best choice, is better than doing nothing.

I can offer some tips, though:

  • SHOP AROUND FOR LOWER IMPLEMENTATION FEES.  THERE HAVE BEEN A LOT OF IMPROVEMENTS IN THE EIPPAREA AND THE COST TO IMPLEMENT HAS DROPPED SUBSTANTIALLY IN THE PAST FIVE YEARS.
  • DON’T GO WITH A SCANNINGSOLUTION POSING AS EIPP.  ASK THEM TO GUARANTEE THAT 50% OR 60% OF INVOICES WILL BE SUBMITTED ELECTRONICALLY AFTER THE FIRST YEAR.  THAT WILL WEED OUT THESCANNERS WHO USUALLY MAKE MORE MONEY KEEPING THE INVOICES ON PAPER.
  • TALK TO REFERENCE CUSTOMERS.  IT MAY NOT BE THE BEST CHOICE, BUT IF THEIR CUSTOMERS LIKE THEM, IT’S PROBABLY AT LEAST A GOOD CHOICE.

I’m happy to discuss what I know about the various players that provide ELECTRONIC INVOICE PRESENTMENT AND PAYMENT solutions.

 

BRINGING JOBS BACK HOME THRU E-INVOICING

Today many Companies and Manufacturers are faced with a major question.  Do we outsource or do we keep jobs here in America?  About six months ago Pres. Obama in one of his weekly radio talks said, “We should be using our tax dollars to reward companies that create jobs and businesses within our borders.”

Researching this topic even further there have been both pros and cons. A few month ago Robert Kuttner, discussed his thought on outsourcing in his article AN AMERICAN INDUSTRIAL Renaissance.  He is the co-founder and co-author of “The American Prospect” stated that, “As industry becomes more automated (ELECTRONIC INVOICING), it takes fewer workers to manufacture a product.  So even if a Chinese worker is paid just one-twentieth the wage of his or her counterpart, there is only so much that can be saved by moving production abroad.”

In the same article it said that, “India’s outsourcing giants-faced with rising wages at home-have looked for growth opportunities in the United States.  But with Washington crimping visas for visiting Indian workers, some companies such as Aegis are slowly hiring workers in North America, where their largest corporate customers are based.  In this evolution outsourcing has come home.”

To go along with this thinking a few ACCOUNTS PAYABLE MANAGERS and CONTROLLERS responded to a survey that they were given recently.  Several mentioned that they are still outsourcing, but the trend is to bring back jobs here to the USA. Outsourcing and in-house automation (E-INVOICING) is changing very quickly. A VP of finance from a medium sized national corporation summed it up and said that, “we’ve been testing efficiency and crunching numbers and are planning to bring everything-in-house again. We would rather hire people internally than pay another company to do the work we could handle ourselves.”

 

E-INVOICE INITIATIVE CHAMPION QUALITIES

In a just a few weeks March Madness will be in full swing with division-1 basketball teams fighting for the prestigious position of playing in the final four. Will it be Duke with Nolan Smith? Or Kansas with Cole Aldrich? Or Ohio State with Jared Salinger?   Whoever makes it to the final four will have to be unselfish, focused, relentless, work together as a team and have a belief that they will be there no matter what it takes.

The same holds true for all ACCOUNT PAYABLES DEPARTMENTS that implement an E-INVOICING INITIATIVE.  They need to work together as a team, be unselfish, relentless in what they are doing and have a strong belief that what they are doing will be implemented for the good of the company, without fail. Besides having all these traits there are seven others that I would like to discuss that I believe will either make or break an initiative. These QUALITIES will help to CHAMPION any AP DEPARTMENT into being a STAR for your company:

  1. CREATE A ROAD MAPTHAT IS EASY TO FOLLOW.  ASSESS WHERE YOU ARE TODAY.  IDENTIFY WHERE YOU WANT TO BE.  WHAT TECHNOLOGY FITS YOUR NEEDS?  DEFINE PROJECT.  INVOLVE RIGHT PLAYERS AND JUSTIFY THE INVESTMENT.
  1. LOOK AT THE TOOLSFOR THE QUICKEST EINVOICE  COMPLETE ACCURATE VENDOR MASTER CONTACT INFO.  NUMBER OF INVOICES PER VENDOR.  DOLLARS SPENT PER VENDOR AND ANY “SPECIAL HANDLING” VENDORS.
  1. BUILD A COLLABORATIVE RELATIONSHIPWITH PURCHASING.  TRAIN PURCHASING BEFORE”GOING LIVE”.  PUT CONTROL IN PURCHASING HANDS.
  1. STRATEGIZE TO GET YOU OVER THE 50% THRESHOLD. COMMUNICATION AND MESSAGING CRITICAL INTERNALLY AND EXTERNALLY.
  1. DECIDEON YOUR
  1. DESIGNTHE SYSTEM.
  1. IMPLEMENT AND EXECUTE PLANS AND DESIGNS IN ORDER TO “GO LIVE”.

Just like the teams that worked together and fought their way to be in the final four so too must ACCOUNT PAYABLES DEPARTMENTS work like a CHAMPIONSHIP TEAM in order to come out on top with an EINVOICE VICTORY!

 

HAS THE TIME FINALLY COME FOR DYNAMIC DISCOUNTING?

Cash is king in today’s market place. Suppliers want to get paid as fast as they can so that they can turn their inventories quickly, and maximize profits. A typical scenario is where a manufacturer sells at a 30% margin. His cost on an item that he sells for $100 is $70.  When he sells this to his customer, he then invoices (electronically we hope!) and waits to get paid, on average 40 days later. This means that he is out the $70 in capital until he receives payment.  Therefore he can’t buy the materials necessary to sell another widget. This phenomenon is why FACTORING has become quite the buzz in the 80’s and 90’s. This has been modernized to a small degree by the advent of PURCHASING CARDS and SUPPLY CHAIN FINANCE.

PURCHASING CARDS allow for better CASH FLOW FORECASTING by allowing suppliers to get paid quickly for an interchange fee of around 3%.  Many companies are utilizing this as a means to get their cash quicker, and the customer is happy because they are reaping the benefit of the rebate on the card. This is all fine and dandy, but who is getting that interchange fee?  The banks and card providers are! What if there was a way to get the same benefits for all parties, without the middle man? Enter the world of DYNAMIC DISCOUNTING, often referred to as EARLY PAY DISCOUNTING.

This works exceedingly well when you have an excellent ELECTRONIC INVOICING provider working with you.  By having the invoices electronically, they are able to be approved much quicker, typically within 4 days. This gives ample time for the supplier to be notified that the invoice is approved and can be paid early with a discount. The discount in controlled by the customer, and is typically much less than the interchange rate that the Card providers have out there.

Suppliers can either opt for the discount, or select a date to be paid and the application will let them know what the exact discount will be. This makes CASH FLOW FORECASTING more accurate, and the treasury department is happy all the way around because their cash is working for both of them! This really is s simple concept and the application of this concept is pretty simple, as long as you have the correct ELECTRONIC INVOICING and EARLY PAY DISCOUNTING provider, like IPAYABLES!