Although we are finally seeing some sunshine here in the UK, in the last year hundreds of people have had their homes, businesses and communities devastated by flooding. Arguments remain over whether this is as a result of global warming or other variations in the meteorological cycle. One thing is certain though, human interventions upstream can have unintended consequences for those further down a water course.
Procurement and finance are comparable – the actions of individuals in the procurement process have a consequence for their colleagues in accounts payable.
Automating accounts payable through the adoption of electronic invoicing is a key objective for many finance departments. Why? Because it cuts out unproductive clerical work, administrative errors, duplication and rework. With today’s technologies, achieving 80% ‘touchless’ transactions is a realistic objective. For an organisation processing 100,000 transactions each year that means moving 80,000 purchase invoices out of the in-tray and into the cloud.
Sadly, such dream figures are rarely achieved with up to 80% of automated invoices still requiring manual intervention. The reasons are many but usually include:
- There’s no corresponding purchase order (PO) to match the invoice against.
- There’s no evidence that the goods or services have been received.
- A matching PO number exists but other components (line description, value) don’t match.
- The vendor details aren’t on the system or company name and address information differs.
Arguably, all of these arise from a lack of procurement control upstream. Implementing an automated invoicing solution without sorting procurement process and control is tantamount to building new housing on a floodplain – it’s an accident waiting to happen.
But where do you start with cleaning up procurement? Read my next blog post for a few tips on how to weigh up different procurement solutions and achieve automated invoicing.
By Dr. Jonathan Betts, Market Development Director at Science Warehouse
Jonathan has spent his career developing and marketing new technologies. As co-founder of Science Warehouse, the last 15 years have been devoted to liberating value in the procurement space. His leisure time is parsed between trail running and channelling his inner Robert Plant via a Martin D35.