Combining e-invoicing and eProcurement doubles chances for achieving AP invoice processing excellence
Best AP departments 50 times as productive as the least effective
Basware, the global leader in purchase-to-pay solutions, today announced the findings of a commissioned study conducted by Forrester Consulting1 on behalf of Basware, examining the performances of accounts payable departments in relation to the levels of efficiency within their invoice handling processes. The study finds that the best AP departments are 50 times as productive as the least effective2. Applying a complete purchase-to-pay process combining e-invoicing, integrated procurement and finance solutions, is found to lead to excellence in accounts payable departments, and increased productivity for organizations.
Examining the AP departments’ performance in terms of how many invoices each AP employee processed annually, the study measured the gulf between best and worst performing AP functions to determine what defines AP invoice processing excellence. The findings revealed a significant disparity between those accounts payable departments that are still relying on paper-based processes and those organizations that have adopted automated processes and e-invoicing. 47 percent of the organizations surveyed still receive more than half of their invoices in paper form which leads to increased errors, delays and costs resulting from manual processes. According to the study, “the worst-performing AP departments don’t seem to realize how far they lag behind their peers. In contrast, 60% of those in the top quartile saw further scope for improvement. The least-efficient departments can’t move forward until they realize just how far they lag behind their peers.”
Combining invoice automation with e-invoicing and eProcurement within organizations was shown by the research to double the chances of achieving AP invoice processing excellence and maximize straight-through processing (STP). Eliminating human intervention in the invoice handling and approval process cuts manual data capture tasks such as document scanning and data entry, thus not only increasing the speed of the process but also providing cost-savings within the business. By implementing purchase-to-pay solutions, organizations can gain control and visibility over finance and procurement processes and improve overall process performance.
The integration of e-invoicing and eProcurement works in parallel with the need to centralize responsibility in accounts payable departments to enable process improvements. Finance managers with pan-division responsibility were found to be more able to invest in better technology and processes than their colleagues operating at BU level. Persuading suppliers to send invoices electronically and offering them incentives for e-invoicing was also found to correlate strongly with excellent performance. 18 percent of the companies surveyed were processing more than 40,000 invoices annually per full time equivalent (FTE), while 25 percent of respondents needed one FTE for every 4,000 invoices or less per year.
“Organizations are paying dearly for poorly performing processes, with each invoice costing more than USD 50 to process at the organizations in the poorest performing quartile,” said Steve Muddiman, SVP at Basware. “We believe these study findings reflect the evidence we have seen in our own customer base. Integrated purchase-to-pay process combined with best practices such departmental collaboration between finance and procurement enable organizations to transform their AP departments to top performers, delivering cost savings and ultimately boosting the bottom line.”
To download the study, please visit: www.basware.com/forrester-report
1“Finance And Procurement Work Together To Achieve AP Invoice Processing Excellence. AP Departments That Combine Technology With Best Practices Are Most Likely To Get Top Results”, A commissioned study conducted by Forrester Consulting on behalf of Basware, April 2010.
2In this study, Forrester conducted an online survey of 100 large organizations in the US, the UK and France.
Basware is the global leader in purchase-to-pay solutions with more than 1,500 customers and 1,000,000 users in over 50 countries around the world. With Basware, organizations can reduce the cost of buying and paying for goods and services and gain visibility and control of their entire spending process by automating manual processes, from sourcing, contract management, purchasing and supplier collaboration to invoice automation. Basware solutions and services enable substantial cost reductions across businesses and deliver value by providing compliance and control, as well as fast return on investment. The solutions are distributed and implemented, either on site or as a service, in Europe, the US, and Asia-Pacific through an extensive network of Basware offices and business partners. www.basware.com
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