Accounts Payable (AP) processes at many companies continue to be seriously hampered by grossly inefficient invoice processing and management capabilities, according to a Feb 2010 report, Taming Invoice Processing: Still Work To Do, by analyst firm Forrester Research (you can purchase the report here. Yakidoo does not receive any compensation). In June 2010, Forrester produced a follow up podcast summary of the report which you can download and listen to here.
Below is a summary of what is covered in the podcast and a timeline that you can use to follow along.
Many accounts payable departments continue to struggle with overwhelming paper volumes, surging document-handling costs and numerous process inefficiencies because of their failure to automate invoice processing functions.
The Forrester report is based on a survey of companies that were at various stages of automating their accounts payable departments. It showed that invoice processing continues to be a largely chaotic and untamed function that is full of non-value added activity and non-standard processes.
In many cases, a company’s ability to pay invoices on time, or to take advantage of early payment discounts or to effectively manage the people and cash flow related to the accounts payable functions continues to be compromised because of weak invoice processing.
Over the long-term, Electronic Invoice Presentment and Payment (EIPP) technologies will likely become the gold standard for addressing such issues, according to Forrester.
However, many companies are far from being in a situation where they can implement EIPP because many of their business partners and suppliers simply do not support the level of process automation required for the electronic presentment and payment of invoices.
For such companies, Electronic Content Management technologies, document and image capturing tools and document processing services can play a big role in corralling untamed invoice processing.
Companies looking to automate their invoice processing functions have a plethora of vendors and technologies to choose from, according to Forrester. Some products, such as those from Kofax fall under the document capture category and are designed to help companies electronically capture paper invoices at the front end.
Some products such as those from EMC feature full fledged enterprise content management capabilities and adapters that allow businesses to hook their invoice processing environment with broader ERP suites. Meanwhile, vendors such as Xerox let companies completely outsource their document management requirement if they choose to.
So while invoice processing remains a largely untamed process, enterprises have numerous opportunities to identify their pain points and to get it under control via automation, according to Forrester.
Go to Taming Invoice Processing - Still Work to Do to download and listen to this podcast.
(NOTE: There is a 20-second lead-in music segment that precedes the interview)
00:22 Craig Le Clair from Forrester Research identifies himself and says he will be talking about Taming Invoice Processing: Still work to do. Le Clair says that untamed processes are shaking confidence in the accounts payable function and that ECM and EIPP tools can help corral those processes.
01:05 Mr. Le Clair defines what Forrester means by ‘untamed processes’. These are processes that tend not to be large enough in focus to be captured by the core ERP, or CRM or PLM system, he says. They tend to be chaotic and involve lots of non value-add work. Invoice processing is a classic untamed process.
02:10 Mr. Le Clair says that for many companies, the problems caused by inefficient invoice processing are clear and devastating. The problems include massive paper volumes, and surging document handling costs. He provides one example of company handling 200,000 to 300,000 paper invoices annually.
03:15 The ability to effectively manage the people and the cash flow related to account payables is a big concern for many businesses, Le Clair says.
04:50 Mr. Le Clair says that enterprises which fail to automate invoice processes face four key consequences: inconsistent processes, high transaction costs, too much time spent on paper processes, high degree of non-value added activity.
05:50 EIPP is the gold standard where all companies will eventually need to get to eventually, says Le Clair.
06:30 He adds that paper and faxes are still the reality for most companies. So, many companies are implementing ECM to corral their invoice processing.
08:05 Implementing ECM would allow companies to cut paper off at the periphery of the accounts payable process.
09:00 Vendors which can help companies automate their invoice processing fall into three categories: document capture vendors, vendors of enterprise class ECM products and providers of outsourced document management services.
Yakidoo offers data capture and ECM solutions that help companies address these problems. Please feel free to contact us if you'd like to discuss how to improve invoice management.
Alfredo De Vanna is CTO of Yakidoo. He has over 10 years of international experience deploying over 80 critical information technology and enterprise content management systems. He is fluent in English and Spanish.