In last week's webinar, "Don't Touch That Invoice: Strategies to Achieve 98% Touchless Processing," Institute of Financial Operations President Tom Bohn conducted a poll with attendees that ranked solutions by their ability to transform the AP function. Here are the results:
ERS/3-way matching: 6%
E-invoicing/payables automation: 50%
P2P end-to-end automation: 27%
Clearly, the drivers of AP transformation are automating the invoice or broader procure-to-pay process. The payback is much greater than other options; not only from the process cost savings, but also from the substantial additional cost savings from driving compliance of purchases to preferred suppliers and negotiated prices, and the ability to expand early payment discounts.
Often an after-thought of an e-invoicing initiative, more organizations are recognizing the substantial value of early payment discounts, from lowering the costs of goods and services to increasing the earnings on short-term cash. At double-digit annual cash returns, and risk-free, there are no comparable short-term investments that can match the return from these discounts. As more corporate finance professionals recognize that by combining payment terms strategies with early payment discount programs, they can capture more discounts while maintaining or extending their days payable outstanding (DPO), expect that more treasurers and cash managers will be drivers of e-invoicing initiatives.
Is transformation happening within your accounts payable organization? Is your corporate finance group aware of how they can leverage e-invoicing to manage cash better? I'd welcome your comments and feedback.