I recently hosted a webinar on “How to Achieve High Performance in Accounts Payable” with long-time ePayables analyst Henry Ijams, managing director of PayStream Advisors. As someone who has been monitoring developments in accounts payable automation for many years, Henry considers e-invoicing a key enabling technology for corporate finance… and not just for the operational cost savings. As Henry explained in the webinar, e-invoicing can trigger a working capital transformation that extends far beyond AP.
It all starts with compressing the invoice processing cycle, and that’s where e-invoicing shines. According to PayStream research data that Henry shared with our audience, the average company takes about 21 days to approve an invoice, and that’s not good enough to capture early payment discounts. So what does Henry encourage an organization to do? Move more suppliers off paper to an electronic process.
Henry sees electronic invoicing picking up steam, and his research backs him up: 20 percent of organizations he recently surveyed reported using electronic invoicing and more than 50 percent are evaluating solutions. We took a poll of the more than 80 attendees on our webinar, and 72 percent of respondents indicated that electronic invoices were less than 25 percent of their total invoice volume. Only about 10 percent claimed electronic invoice volume greater than 50 percent of total invoices, which is what Henry considers a best practice. The many questions at the end of the sessions suggest that attendees are eager to shift their invoice volumes to more electronic processing.
Henry brought up another aspect of a successful e-invoicing initiative: supplier adoption. For organizations that don’t have this expertise in house, he recommends leveraging a firm with supplier recruitment experts such as Ariba to assist in a paper-to-electronic conversion effort.
“In our latest survey, we asked more than 300 corporate managers about their perception of ePayables providers and Ariba was mentioned more than any other provider,” Henry reported. In addition to Ariba’s supplier enablement expertise that can help organizations achieve their supplier enablement objectives, Henry mentioned other advantages that Ariba offers for automating accounts payable operations: our “giant” supplier network with more than 300,000 suppliers and end-to-end ePayables coverage that includes e-invoicing, e-payment and robust working capital management solutions.
For anyone that missed the webinar, you can hear the replay at:
And you can see Henry Ijams present at our Ariba Live 2010 Conference, May 24-26 in Orlando, FL.