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Keywords: OB10, APQC, e-invoicing, electronic invoicing, accounts receivable, EDI, invoice submission, DSO
Susie West | News | 14 June 2012
OB10, the e-invoicing network, and APQC, the benchmarking and research firm, have collaborated to produce a best-practices-focused white paper: Accounts Receivable Performance: Doing OK is No Longer Good Enough. The paper reveals the hidden costs associated with AR practices and highlights the solutions used by top-performing companies to refine processes and improve performance.
Based on this year’s APQC AR Benchmarking Survey of 154 accounts receivable professionals, the white paper shows that top-performing organizations spend $1.17 to process a single invoice; this is a dramatic 97% less than those at the bottom of the scale where the cost reaches $39.61 per invoice. This disparity indicates that automation, process refinement, and redeploying staff to more value-added responsibilities can have a significant impact on the bottom line.
The report shows that many organizations still submit paper invoices via regular mail, e-mail and fax. While they may believe that these processes are sound, transitioning to electronic solutions such as customer or supplier portals, EDI, or third-party e-invoicing networks can generate major efficiencies, reduce errors, decrease invoice disputes and increase the speed of collections.
As illustrated in the report, streamlining the AR process can reduce days sales outstanding (DSO), leading to a significant financial impact. The example demonstrated that for a $31bn organization at the industry median for DSO, cutting DSO by half a day can add a one-time boost of $34m to the balance sheet. Although the impact on a smaller organization will be relative to its size, DSO reduction can result in significant improvement to the cash balance of any organization.
Mary Driscoll, Senior Research Fellow for APQC said, “There is ample evidence to show that organizations must pay close attention to their invoice submission processes and explore solutions that will boost productivity, increase efficiency, and potentially liberate millions of dollars trapped in accounts receivable.”
OB10 CEO, Luke McKeever, shares his views on the findings, “This report reinforces what the companies transacting on our network have come to know: there are many concealed costs associated with submitting invoices via paper, e-mail and fax. Through streamlining and automating the accounts receivable process, more organizations can eliminate these costs, and give their employees more meaningful and value-added tasks.”
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