Despite advances in technology, much of the work done by corporate accounts payable department’s remains manual, handled through paper. There are a number of reasons why this is so, but chief among them is that suppliers have displayed a remarkable lack of interest in switching to electronic invoicing for the goods and services they supply.
To date, on average, a corporate AP department still receives some 70% of its invoices in paper format. This means that AP automation in the form of E-invoicing amounts for less than a third of total invoices processed. This creates a cumbersome AP workflow, which effects most organizations profits.
In response to this, most AP departments have taken the intermediate step of investing in scanning and imaging, which allows them to take the paper invoices, regardless of the format they’re delivered in, and convert them to digital invoices. While this is a move in the right direction, it is still substandard, when compared to a true e-Invoice, whose life cycle is in the digital realm, never actually becoming a paper copy.
The reasons that suppliers have traditionally been resistant to switching from paper to accounts payable automation are as varied as the suppliers themselves, but the three major reasons most often are a general resistance to change (“we’ve just always done it this way, so why switch now?”), potential lost revenue while the new system is being mastered, and the costs involved in making such a switch.
The advantages of electronic invoicing are vast, including lower processing costs, greater overall visibility, efficiency, and ultimately, higher profits for those companies that do make the switch. In reality, scanning and conversion technologies should not be regarded as the final solution to the matter. What is vital in the long run, is for corporate AP departments to open and maintain good lines of communications with suppliers, educating them on the many tangible benefits of E-Invoicing with the end result of helping them to decide for themselves to make the switch.