Every crisis is a chance for a fresh start, enabling organizations to take stock of what’s working and what should be changed. As painful as the pandemic was, it has made companies of every size and in every industry aware of how critical many of their back-office functions are to keep their business going.
Faced with the biggest disruption in recent memory, the majority of accounts payable teams embraced digital transformation from purchase to payment. The AP profession adopted electronic invoicing in record numbers in 2020, demonstrating an amazing level of creativity, efficiency and resilience to process, approve and pay invoices on time. By doing so, the AP function is at the height of its game.
And change is just beginning to pick up speed. 2021 is set to see accounts payable teams get the recognition they deserve, says Ardent Partners in its latest report “The state of ePayables 2021: Operating in the New Normal.”AP leaders are well on track to “become an operational engine that quickly processes transactional activity while focusing its resources on providing deep financial intelligence that can be leveraged for critical enterprise decision-making.”
Businesses Win With New Tools For Electronic Invoicing
End-end-end AP automation has many tangible benefits with a direct impact on the bottom line, as close to 200 respondents across 20 different industries told Ardent. “The industry has reached its highest technology adoption rates yet, while also seeing an increase in those that plan to deploy solutions in the near-term,” the report says. “A majority of accounts payable teams will be operating with new tools at hand. Many more will be operating with a new mindset.”
Companies that master seven key technologies to handle invoices will reap the biggest efficiency and productivity gains:
Document imaging and scanning
Automated routing and approval workflow
Automated data capture and extraction
Electronic B2B payments
Complete procure-to-pay solution
Self-service supplier portal
A platform such as Yooz enables the “holy grail” of electronic invoicing: straight-through processing from purchase to payment with no human intervention required. Electronic invoices just flow freely through the AP process and are ingested, coded, routed, approved and paid in record time. It’s an approach that has been winning over more and more companies, as Ardent points out: “For a majority of leaders overseeing AP, the pandemic made it patently obvious that manual processes are no longer acceptable and must be stricken from the workplace.”
Six Ways Electronic Invoicing Futureproofs Every Business
Companies that innovate along their entire invoice workflow can almost immediately unlock all that digital transformation has to offer.
- Slashing processing cost and cycle times. While the average total cost to handle a single invoice stood at 0.95 in 2020, best-in-class players only paid .25 per invoice. Likewise, they were able to cut processing time from 11.9 to 3.3 days, realizing discounts for early payment and optimizing cash management for the entire company.
- Getting a handle on costly exceptions. Usually, 1 in 4 invoices is flagged as an exception and needs human review, while best-in-class organizations report only 1 in 10 exceptions. That’s due to features such as the capability to automatically perform two- or three-way matching for every invoice to weed out duplicates or outright fraud. “The amount of staff time dealing with invoice exceptions is costly, but it also delays payments, disrupts cash flow, and keeps the AP team from focusing on higher-leverage/more strategic activities,” according to Ardent.
- Enabling suppliers to become part of your business network. Setting up your vendors and other partners to send and receive electronic communications, most importantly invoices, is a game-changer. Yet while almost two-thirds of AP automation leaders have onboarded their partners, only slightly more than a third of all other companies support this function. It´s a “critical gap that most organizations still need to address,” the report warns.
- Mastering electronic payments as a win-win. B2B payments offer financial and other benefits to both sides of a transaction. While the majority of companies surveyed (51%) support B2B payments, there is still room for improvement. Companies that actively try to optimize how they pay their suppliers via digital and electronic means will not only boost their visibility into cash and spend and reduce payment fraud. They’ll also get more support from key vendors if invoices are processed and paid through their desired channels. A platform such as Yooz lets companies initiate seamless electronic payments through its partners through transfers or electronic checks.
- Turning the AP function into an intelligence hub. Having various pieces of technology up and running covers only one core competency of electronic invoicing. Putting it all together unlocks the next level of successful AP automation. It makes the AP function with its rich real-time data gleaned from invoices a hub of financial intelligence.
“The most intelligent teams rely upon a few common elements: collaboration, communication, best practices, automation, data, data management hubs, algorithms, and analytics,” according to Ardent Partners. “AP sits on a goldmine of data… the downstream flow of invoices and payments is an incredible channel for transactional data that can paint a vivid picture of what is happening across the organization.”
- Earning the recognition the AP team deserves. As dispersed AP teams kept their businesses going, working remotely in challenging times, companies discovered the inherent value of electronic invoicing. As Ardent reports, two-thirds of enterprises now recognize their AP team as either very valuable or exceptionally valuable.
“The pathway for AP in 2021 and beyond is clear,” the report summarizes: “Become a self-sustaining engine of intelligence and operational prowess, ready to support strategic enterprise endeavors while serving as a source of financial knowledge that can impact heavy, mission-critical corporate decision-making.”
The Gig is Up. With Electronic Invoicing, Any Business Can Handle It
There’s another urgent reason why it makes sense to embrace a solution like Yooz to read and route invoices in record time so they can be approved, paid and analyzed for maximum productivity. It’s a massive disruptor called the gig economy. Almost half the workforce of all companies Ardent surveyed in 2020 was classified as “contingent” or “non-employee.”
As more enterprises rely on an agile workforce to quickly find the skills they need, electronic invoicing is a key component to better manage and pay those gig workers. The pandemic taught companies that they need to improve their workforce flexibility and scalability. Ardent sees a golden opportunity to get even more out of end-to-end automation powered by Yooz: “AP can play a pivotal role in not only ensuring that payment data is leveraged in workforce planning, but that key gig workers and contractors are paid quickly and efficiently for the sake of the talent experience.”