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Keywords: e-invoicing, electronic invoicing, einvoicing, Shared Services Leaders’ Summit, Atlanta, Supply chain, SSO, accounts payable
Susie West | Article | 19 October 2012
At the Shared Services Leaders’ Summit in Atlanta this October, one company shared their invoicing scenario with the audience.
They divulged that they currently process six million invoices annually. And every one of these six million documents is paper.
I dug a little deeper. This was clearly not the response I was expecting.
Being in the tourism and entertainment business, they receive and enter invoices locally. “So the business case just isn’t there” came the line.
I understand the reticence here. It's not the first time I have heard such a cry. But choose to defend the other corner of the ring, from where e-invoicing insists the returns from e-invoicing are compelling.
Here is why:
Going are the days where shared services base their business case inputs on head count reduction alone.
And even if they did, joining one of the various networks available is relatively inexpensive. Improved technology bases, network provider operations setting up part of their operations in low cost locations, and the forces of competition in the market have all resulted in more attractive rates for the end-user.
So even in a decentralised environment, with six million invoices, you’d have a business case for e-invoicing on head count alone.
However, what is now taking e-invoicing into the ‘ROI super-league’ is discount capture, supply chain financing, and supplier risk management. This is where companies look beyond the headcount saving, and treat e-invoicing as an enabler to harvest powerful analytics, on which to base business decisions. This suite of information, which provides a full and meaningful picture, is hard to build and access without e-invoicing.
Let's look at discount management.
The rules are changing:
If you are one of the companies that think ‘I don’t need e-invoicing to make me pay early and take the discount! I pay late and take the discount any way!” think again.
So managing your discounts properly lends itself to ethical, financially beneficial and strategic vendor management.
Once you factor in the savings that come from capturing discounts, your ROI mushrooms. A business case return of a few hundred thousand in the first year, becomes a few million.
It’s not ambitious to suggest that your ROI can see a multiple of ten when discount capture is factored in.
How to start:
The company in question should think about centralising accounts payables, and introducing e-invoicing. From the stories they shared, they are clearly best practice in a number of areas. Centralising and the eliminating invoices will make them an all-rounder and proffer exciting results across finance and procurement.
Photo credit: Anuj Biyani
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