While automation tools like e-invoicing have been around for decades, important developments are making automating Procure-to-Pay more crucial than ever.
The sudden need to work from home and operate in challenging conditions showed us that agile businesses with accurate information about their financials performed better than those struggling with manual processing and inaccurate forecasts.
Governments are also mandating e-invoicing and real-time financial reporting at an unprecedented pace to collect more indirect tax from businesses. Continue reading to find out how to achieve the next level of automation in your company.
Three reasons to automate your financials now
- Automation boosts operational resilience: The pandemic pushed operational resilience and disaster readiness up the agenda. AP and P2P professionals need to plan how they can best protect their future organisations against disruptions — and automating invoice processing and supplier communication are the top priorities.
- E-invoicing mandates are coming into force: Governments around the world are implementing e-invoicing and real-time reporting requirements rapidly. Regulations vary among countries, but most mandates require companies to submit invoices in real-time. It will be essentially impossible for enterprises to remain compliant with a manual system. Automation is key.
- Automation gives you a competitive edge: While some businesses will be focusing on keeping the lights on and reducing costs in the aftermath of the pandemic, this isn’t sustainable forever. By investing in simple but critical changes now, finance leaders can optimise their organisations’ financial health in ways that better equip them to navigate any disruptions ahead.
What’s stopping businesses from automating?
While high levels of automation and e-invoicing are certainly possible and can help transform organisations, it’s far from the norm. So, what’s holding companies back?
Problem one: Many underestimate that change management is a journey
Leaders may have a vision of what they want to achieve, but sticking to long-term goals in times of turbulence requires real leadership and change management skills.
Solution: You need proactive, persistent and passionate process owners. Driving change requires someone with a vision who understands the business and is determined to keep projects moving forwards.
Problem two: A lack of high-quality data
Businesses often have the data they need to make automation happen, but it’s rarely organised or fully accurate.
Solution: It may not be the most glamorous task, but cleaning your data is a crucial step on the road to digital transformation, and building good data governance will help you maintain it in the long run. Essential steps include:
- Assessing your vendor database
- Validating addresses, registration numbers, bank details, etc.
- Analysing active vendor records and completing missing information
Problem three: Low levels of supplier adoption of e-invoicing
E-invoicing is only successful if suppliers onboard to your chosen solution. This may mean changing the supplier’s behaviour.
Solution: Resist implementing mandatory e-invoicing as it could provoke a negative reaction from your suppliers (with whom you need to have a strong relationship). Instead, try to win them over by communicating the benefits of e-invoicing, person-to-person.
Problem four: Low levels of straight-through processing
Many companies implement e-invoicing but still receive invoices in PDF or paper formats.
Solution: As PO issues and Price and Quantity discrepancies are the main causes of exceptions that require manual intervention, alignment between finance and procurement is critical. Consider the following:
- Align AP and Procurement KPIs
- Embed e-invoicing best practices throughout the entire procure-to-pay process
- Procurement can work to help manage expectations when it comes to invoicing
Accelerate your automation journey with Tungsten Network
Ease your transition to the next level of automation. Access industry-leading finance software and expertise using Total AR and Total AP from Tungsten Network.
Want to learn more about how automating P2P processes can save your finance department money and time? Download our full white paper here.
You can also get in touch today by requesting a call with us.