By Susan Avery
The top financial priority for companies in 2011 is improving operational efficiency, surpassing a focus on increasing profits and top-line performance. That’s according to a new report sponsored by Basware and conducted by The Institute of Financial Operations.
The majority of organizations surveyed recognize the importance of electronic invoicing (e-invoicing) in helping achieve this objective and realize negative consequences that come from relying on manual processes.
Results of the 2011 e-invoicing survey show that one-third of respondents report their employers do not use e-invoicing. That compares with a similar question from last year’s survey in which 58% responded that their companies use a manual data capture and approval process for receiving invoices.
The majority, however, says there’s room for improvement in how companies leverage technology to implement invoicing processes. Despite an understanding of the benefits of e-invoicing in terms of cost savings and increased efficiency, many companies have been to slow to adopt it.
The survey queried accounts payable (AP) managers, supervisors, chief financial officers (CFO) and others working in finance roles.
"The research shows how much promise the technology has, but also how far we have to go in educating financial leaders to make the investment and commitment,’’ says Thomas M. Bohn, president and CEO of The Institute in Orlando, Fla.
The survey also identifies challenges respondents face in sending and receiving non-electronic invoices, including time spent entering and scanning invoices and securing approvals, as well as misplaced or lost invoices.
“The results of this survey are revealing, and they underscore the significance that companies place on automating their key financial processes,” says Bob Cohen, vice president of Basware in Stamford, Conn. “The insights help us better meet the needs of our customers as we partner with them to achieve excellence in procurement and finance.
“Organizations that have low levels of automation in capturing, transmitting, and processing invoices lack real-time visibility into expenses, making it difficult for them to manage spend, cash flow, and working capital,” he says. “Without visibility, it’s also hard for procurement and finance departments to share information, further clouding the financial picture.”
Survey respondents note that speeding up invoicing processes and reducing costs are compelling reasons to implement e-invoicing.
Almost half say they are able to receive and process invoices electronically, and a quarter are able to send invoices electronically. However, 76% indicate they receive e-invoices as e-mailed PDFs and 50% print e-invoices for further processing, which does not allow them to take advantage of the benefits of true e-invoicing, such as increased AP automation, improved invoicing quality and reduced manual errors.
Supporting survey findings that e-invoicing adoption is growing, the U.S. federal government has mandated that by the end of 2012 all treasury bureaus must implement the Internet Payment Platform (IPP), an electronic invoicing processing solution, and that all its commercial vendors submit invoices by IPP by the end of 2013.
These initiatives, implemented to cut taxpayer costs and increase efficiency, are expected to save $450 million annually.
In an interview on the government’s announcement, Basware’s Cohen told My Purchasing Center, “I think it’s great that the government is taking this initiative. It may be the boost that e-invoicing needs.
“In the U.S., about 10-20% of invoices are currently sent electronically,” Cohen says. “There’s hesitation for a number of reasons. Old habits die hard. People don’t like to change. They’re used to printing and mailing. It’s the way it’s always been done.
“Once these companies see how easy it is and the benefits that will create a groundswell for them to send invoices electronically not only to the government but to all their suppliers,” he adds.”
Susan Avery is Editor-in-Chief at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates roundtable discussions, podcasts, webcasts and video interviews. Susan has 30 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com.
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