+ All Categories
Home > Documents > Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal...

Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal...

Date post: 11-Jul-2020
Category:
Upload: others
View: 0 times
Download: 0 times
Share this document with a friend
23
Six Promising Trends in Accounts Payable An IOFM white paper Sponsored by
Transcript
Page 1: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

Six Promising Trends in Accounts PayableAn IOFM white paper

Sponsored by

Page 2: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

2

Change comes slowly to accounts payable (AP).

For too long, AP has suffered from stubbornly high paper invoice volumes, inefficient manual keying and routing, fragmented systems and processes, and cost-prohibitive approaches to automation.

But IOFM’s 2015 AP technology survey uncovered six promising trends in AP:

1. Decline in paper invoice volumes

2. Wider adoption of workflow

3. Growth of mobile capture and document access

4. Better alignment of procurement and AP

5. Tighter integration between AP and enterprise resource planning (ERP) systems

6. Adoption of cloud-based AP solutions

These trends are enabling AP organizations to reduce costs, improve return on system investments, better control spend, strengthen supplier relationships, and enhance working capital management.

This special report details how these six trends impact AP.

Decline in paper invoice volumesToday, invoices arrive in different formats and media.

Many organizations still receive the majority of their invoices as paper. But IOFM’s research shows that invoices increasingly arrive via e-mail, fax, electronic data interchange (EDI), Extensible Markup Language (XML), through a supplier portal, and as images from a smartphone or tablet.

Only 21 percent of respondents to IOFM’s 2015 AP technology survey indicated that they receive the majority of their non-PO invoices as paper. More than one-third of survey respondents (37 percent) reported that they receive the majority of their PO-based invoices via paper, while 15 percent of respondents stated that they receive the majority of their check requests for vendors as paper.

Six Promising Trends in Accounts Payable

Page 3: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

3

Which invoice types are you processing, and what is the estimated percentage of each in your overall operation?

Over the past one to three years, 21 percent of AP organizations have experienced a “moderate” decrease in the volume of paper invoices they receive, while 18 percent of AP organizations have experienced a “substantial” decrease in the volume of paper invoices they receive, IOFM reports.

Conversely, 36 percent of AP organizations report a “moderate” increase in the volume of invoices they receive electronically compared to three years ago, and 23 percent of AP organizations say their volume of electronic invoices has increased “substantially” over the past three years, IOFM finds.

None of the AP organizations surveyed by IOFM report a decrease in electronic invoice volumes.

Similarly, one-third of AP organizations (33.3 percent) say the volume of invoices they process electronically has increased “moderately” over the past one to three years, while 21 percent of AP organizations say the volume of invoices they process electronically has increased “substantially.”

The rise in the percentage of invoices processed electronically has resulted in 18 percent of AP organizations reporting “moderate” growth in the percentage of invoices processed straight-through, and 10 percent of AP organizations experiencing a “substantial” increase in the percentage of invoices processed straight-through, according to the findings of IOFM’s 2015 AP technology study.

Electronic (e

-invoices)

Electronic data in

terchange

(EDI)

Paper with

purchase order

(EDI)

Paper, non-PO (E

DI)

Paper, check re

quests

for vendors

(EDI)

Paper, employee

expense claims

Email atta

chmentFax

Web form

invoice

submiss

ion

■ Less than 5 percent

■ 6 to 10 percent

■ 10 to 25 percent

■ 26 to 33 percent

■ 34 to 50 percent

■ 51 to 66 percent

■ 67 to 75 percent

■ 76 to 100 percent

100908070605040302010

0

Page 4: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

4

In the past one to three years, have you seen an increase, a decrease or little movement in each of the following items:

0

10

20

30

40

50

60

70

80

90

• Total number of invoices processed

• Number of invoices processed via paper

• Number of invoices processed electronically

• Number of employees on AP team

• Average amount of time to process an invoice

• Average cost to process an invoice

• Total number of payments issued

• Number of payments issued via paper

• Number of payments issued electronically

• Number of payments issued via P-card (Including ghost card, single-use card, AP card)

• Average size of purchase made via P-card

• Average monthly P-card rebate

• Number of invoices processed electronically

• Number of invoices processed straight-through with no human touch

• Number of discounts taken on invoices

• Average size of discount taken on invoices

• Quantity of metrics used to evaluate AP effectiveness

• Quality of metrics used to evaluate AP effectiveness

• Number of exceptions or errors handled by AP team

• Number of IRS notices received about issues or errors (such as B-Notices)

• Number of T&E reimbursement requests processed

In the past one to three years, have you seen an increase, a decrease or little movem

ent in each of the following item

s:

Substantial increase

Moderate increase

No change

Moderate decrease

Substantial decrease

Don’t know

Total number of invoices processed

Number of invoices processed via paper

Number of invoices processed electronically

Number of employees on AP team

Average amount of time to process an invoice

Average cost to process an invoice

Total number of payments issued

Number of payments issued via paper

Number of payments issued electronically

Number of payments issued via P-card (Including ghost card, single-use card, AP card)

Average size of purchase made via P-card

Average monthly P-card rebate

Number of invoices processed electronically

Number of invoices processed straight-through with no human touch

Number of discounts taken on invoices

Average size of discount taken on invoices

Quantity of metrics used to evaluate AP effectiveness

Quality of metrics used to evaluate AP effectiveness

Number of exceptions or errors handled by AP team

Number of IRS notices received about issues or errors (such as B-Notices)

Number of T&E reimbursement requests processed

■ Substantial increase

■ Moderate increase

■ No change

■ Moderate decrease

■ Substantial decrease

■ Don’t know

Page 5: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

5

Despite this progress, organizations have a long way to go towards touchless processing. Some 56.6 percent of respondents to IOFM’s 2015 AP technology survey stated that their organization processes less than 6 percent of their invoices straight-through. More than three quarters of respondents to the IOFM survey (78.4 percent) said they process less than half of their invoices straight-through.

Not surprisingly, organizations are planning to deploy technology to digitize paper invoices and extract and validate data from all invoices. Front-end imaging, back-end imaging and automated data capture are the top automation priorities of organizations surveyed by IOFM in 2015.

Which automation projects are considered operational priorities for your organization in 2015? (Please rank in order of priority with 1 = highest.) 4+5+5+5+5+6+8+7+10+13+11+12+13+13+14+15+17+16+19+19+20+18Front-end imaging

Back-end imaging/archivingData capture/OCR

Automatic matchingWorkflow/invoice approval

E-invoicingEDI

ACHT&E automation

OutsourcingERP integration

Automated tax/legal complianceAutomated T&E expense management

P-card rebatesAP card rebates

Dynamic or variable discountingSupply chain financing

Vendor portalBusiness commerce network

Cloud servicesOutsourcingDon’t know

0 5 10 15 20 25

3.9 5.0 4.9 5.5 5.2 5.9 7.5 7.0 9.6 12.6 10.7 12.0 13.0 12.8 14.2 15.1 16.6 15.7 19.0 18.6 20.4 18.1

Page 6: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

6

Organizations also are migrating to electronic submission of invoices via a self-service portal.

Sixty-two percent of respondents to IOFM’s 2015 AP technology survey said their organization has deployed electronic invoicing, or plans to within three years. Additionally, 51 percent of survey respondents said their organization has deployed a supplier portal or plans to within three years.

Which of the following solutions do you use now and intend to use in the future?

0  10  20  30  40  50  60  70  80  90  

•  Front-­‐end  imaging  

•  Back-­‐end  imaging/archiving  

•  Data  capture/OCR  

•  AutomaFc  matching  

•  Workflow/invoice  approval  

•  E-­‐invoicing  

•  EDI  

•  ACH  

•  T&E  automaFon  

•  Outsourcing  

•  ERP  integraFon  

•  Automated  tax/legal  compliance  

•  Automated  T&E  expense  management  

•  P-­‐card  rebates  

•  AP  card  rebates  

•  Dynamic  or  variable  discounFng  

•  Supply  chain  financing  

•  Vendor  portal  

•  Business  commerce  network  

•  Cloud  services  

•  Outsourcing  

Which  of  the  follow

ing  solu0ons  do  you  use  now  and  intend  to  use  in  the  future?  

Use  now

 

Plan  to  implem

ent  -­‐  within  6  m

onths  

Plan  to  implem

ent  -­‐  within  1  year  

Plan  to  implem

ent  -­‐  within  3  years  

No  plan  to  im

plement  

Don’t  know  

Front-end imaging

Back-end imaging/archiving

Data capture/OCR

Automatic matching

Workflow/invoice approval

E-invoicing

EDI

ACH

T&E automation

Outsourcing

ERP integration

Automated tax/legal compliance

Automated T&E expense management

P-card rebates

AP card rebates

Dynamic or variable discounting

Supply chain financing

Vendor portal

Business commerce network

Cloud services

Outsourcing

■ Use now

■ Plan to implement – within 6 months

■ Plan to implement – within one year

■ Plan to implement – within three years

■ No plan to implement

■ Don’t know

0 10 20 30 40 50 60 70 80 90

Page 7: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

7

Self-service invoice submission, such as through a portal, reduces costs for suppliers and buyers.

A portal is used by suppliers to submit invoices, track invoice status and collaborate with buyers. Qualified vendors are provided a login URL (by the buyer) for access to the portal, where they can self-register, create a branded home page and gain access to their personal dashboards.

Portals enable suppliers to eliminate the costs, labor and delays associated with invoice printing and mailing. Suppliers also eliminate the risk of payment delays due to lags in invoice receipt. Buyers eliminate mailroom costs of invoice receipt, handling, sorting and scanning. Submitting invoices electronically through a portal also reduces supplier inquiries. As an added benefit, both suppliers and buyers achieve increased invoice accuracy while reducing their impact on the environment.

Shifting invoice volumes require organizations to aggregate and process invoices from any paper and electronic channel. Automation addresses this challenge by providing a single, consistent, business process for all invoice types (paper, fax, EDI, e-invoicing, etc.), encompassing all user roles, locations and operating models. Sticky notes, highlights, comments and actions are placed on the electronic document. Web-enabled access to these documents, for those both inside and outside the company, extends involvement in the process beyond the AP department. And since all information sources are captured and interacted with using a familiar interface, the business process is consistent.

Capture solutions enable organizations to scan all paper invoice documentation index into the ERP system using the image instead of the actual paper document. Electronic invoices and EDI transactions also are captured. Central receipt of all invoices coupled with immediate front-end capture enables the earliest possible recording of liabilities and gives finance executives the highest, most accurate visibility into AP accruals. Extracted information is automatically verified against vendor/supplier master data records, PO and general ledger account information. Costs are reduced because the solution enables companies to reduce data entry, decrease approval and review cycle times and eliminate rush invoices, allowing early payment discounts and avoiding late payment penalties. Additionally, audit trails of who did what and when are maintained continuously.

Industry research shows that organizations that deploy technology such as automated data capture:

• Process invoices at an average cost of $3 per invoice

• Process an invoice within four days on average

• Capture 90 percent of early payment discount opportunities

• Take near real-time actions for improved productivity and cash management

Page 8: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

8

Wider adoption of workflowManually routing invoices is time-consuming, costly and vulnerable to delays and lost invoices.

Automated workflow reduces cycle times, resulting in increased internal and external customer satisfaction and maximized cash flow. Prompt payments enable early payment discounts, eliminate late fees and reduce the likelihood of duplicate payments caused by vendors resending invoices.

Automated workflows also enforce control policies such as the segregation of invoice processing. AP has a clear line of sight into processes that can help prevent and detect losses due to fraud.

And automated workflow and routing capabilities drastically reduce a myriad of error types – data entry, lost or misfiled documents and/or poor approvals – greatly improving accuracy rates.

Additionally, workflow provides visibility and insight to every stage of an AP process, from receipt through validation, approval and posting. Organizations can use historical data to improve future processing; take manual or rules-based actions, such as approval or escalation based on near real-time feedback; leverage historical and current data to optimize performance and manage spend.

It is for these reasons that workflow/invoice approval ranks sixth among the top automation priorities of AP organizations that responded to IOFM’s 2015 AP technology survey.

Which automation projects are considered operational priorities for your organization in 2015? (Please rank in order of priority with 1 = highest.)4+5+5+5+5+6+8+7+10+13+11+12+13+13+14+15+17+16+19+19+20+18Front-end imaging

Back-end imaging/archivingData capture/OCR

Automatic matchingWorkflow/invoice approval

E-invoicingEDI

ACHT&E automation

OutsourcingERP integration

Automated tax/legal complianceAutomated T&E expense management

P-card rebatesAP card rebates

Dynamic or variable discountingSupply chain financing

Vendor portalBusiness commerce network

Cloud servicesOutsourcingDon’t know

0 5 10 15 20 25

3.9 5.0 4.9 5.5 5.2 5.9 7.5 7.0 9.6 12.6 10.7 12.0 13.0 12.8 14.2 15.1 16.6 15.7 19.0 18.6 20.4 18.1

Page 9: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

9

Moreover, an eye-popping 88 percent of respondents to IOFM’s 2015 AP technology survey stated that their organization has deployed an AP workflow solution or plans to within three years.

Which of the following solutions do you use now and intend to use in the future?

0  10  20  30  40  50  60  70  80  90  

•  Front-­‐end  imaging  

•  Back-­‐end  imaging/archiving  

•  Data  capture/OCR  

•  AutomaFc  matching  

•  Workflow/invoice  approval  

•  E-­‐invoicing  

•  EDI  

•  ACH  

•  T&E  automaFon  

•  Outsourcing  

•  ERP  integraFon  

•  Automated  tax/legal  compliance  

•  Automated  T&E  expense  management  

•  P-­‐card  rebates  

•  AP  card  rebates  

•  Dynamic  or  variable  discounFng  

•  Supply  chain  financing  

•  Vendor  portal  

•  Business  commerce  network  

•  Cloud  services  

•  Outsourcing  

Which  of  the  follow

ing  solu0ons  do  you  use  now  and  intend  to  use  in  the  future?  

Use  now

 

Plan  to  implem

ent  -­‐  within  6  m

onths  

Plan  to  implem

ent  -­‐  within  1  year  

Plan  to  implem

ent  -­‐  within  3  years  

No  plan  to  im

plement  

Don’t  know  

Front-end imaging

Back-end imaging/archiving

Data capture/OCR

Automatic matching

Workflow/invoice approval

E-invoicing

EDI

ACH

T&E automation

Outsourcing

ERP integration

Automated tax/legal compliance

Automated T&E expense management

P-card rebates

AP card rebates

Dynamic or variable discounting

Supply chain financing

Vendor portal

Business commerce network

Cloud services

Outsourcing

■ Use now

■ Plan to implement – within 6 months

■ Plan to implement – within one year

■ Plan to implement – within three years

■ No plan to implement

■ Don’t know

0 10 20 30 40 50 60 70 80 90

Page 10: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

10

Automated workflow solutions help organizations better manage PO and non-PO transactions.

With preapproved and PO invoices, the usually cumbersome dispute resolution process is optimized, as all invoice information is automatically captured, extracted and validated before being delivered to the user responsible for resolving the dispute. Automatic matching of invoice lines to purchase order (PO) receipts, as required, greatly reduces manual intervention. Enhanced integration with a capture solution supports matching line item details to multiple POs. With automated workflows, all of the information and tools are at the user’s fingertips to resolve the hold/block and approve the invoice for payment. If individuals require information from the invoice or PO, access to all of the associated information is provided online, reducing the cost and time for AP to retrieve such information.

With non-PO invoices, automation brings supplier invoices directly into AP and optimizes the coding and approval process. Automated solutions can leverage an ERP system’s security and approval hierarchies to route the invoice to the appropriate line of business manager via an email with a link. When the manager clicks on the link, the invoice is displayed in a browser for the manager to review, code, and approve. Cost center codes, which can be very lengthy and difficult to remember, are entered accurately the first time with an automated solution and are crosschecked and validated against the ERP tables in real time. The manager simply clicks on “approve” or “reject.”

Growth of mobile capture and document accessSmart phones and tablets are everywhere.

Mobile capture and invoice document access and approval increases the responsiveness of line of business employees and executives with secure access to invoice processing functions and the associated financial and business process information from virtually anywhere, at any time.

Financial Shared Services Centers can leverage mobile capabilities across the extended enterprise, integrating the lines of business with geographical hubs and smartphone users. Employees can image expense receipts with mobile capture and transmit them to an ERP expense management application. Suppliers can leverage mobile capture to image an invoice and transmit it to an enterprise with secure chain of custody and image enhancement and receive instant, secure and verified receipt. These smartphone-supplied images can be the source of the highest quality invoice processing data.

Information capture and image processing technology running on the device automatically extracts and validates information from images taken from a smartphone or tablet, eliminating the need for users to manually enter information. What’s more, mobile solutions can capture any invoice or payables document — and advanced analytics provide full visibility to enhance the user experience.

Better alignment of procurement and APAP and procurement have traditionally operated as silos. This has resulted in high purchasing costs, invoice processing errors, poor spend visibility and management, and strained supplier relationships.

Ardent Partners found in a 2015 study that 42 percent of organizations want to reduce procurement costs while 39 percent of organizations reported a desire to streamline procurement processes.

Page 11: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

11

One sure way to reduce costs is to align procurement and AP. Best-in-class companies (which have a higher level of automation than their peers and greater alignment between AP and procurement) reduced their purchasing costs from $10.04 per order in 2009 to $4.80 per order in 2013, reports the Hackett Group. Conversely, average companies pay $18 per order, according to the Hackett Group.

Aligning procurement and AP also enhances visibility into the procure-to-pay cycle.

“Improved control over cash management and spending” is the primary reason AP operations are automating the management of POs and invoices, according to respondents to IOFM’s 2015 AP technology survey. Only 50 percent of respondents to a 2015 Ardent Partners survey indicated that their organization has “strong” visibility into enterprise spend, while a slightly higher percentage of organizations (55 percent) report “strong” visibility into the percentage of spend under management.

“Improved control to ensure that purchases are made with preferred suppliers” is another reason that AP operations are automating the management of POs and invoices, IOFM survey respondents said. Sixty-six percent of organizations surveyed by Ardent Partners in 2015 indicated that “earlier engagement of sourcing opportunities” is their driver for future procurement success.

What do you see as top reasons driving AP operations to move to automating the management of purchase orders (POs) and invoices? (Please rank in order of 1 = most important)

Improved control over cash management and spending

Improved control to ensure purchases are made with preferred suppliers

Decrease in exceptions that lead to blocked payments

Simplification of invoice submission process from suppliers

Reduction in processing costs

Reduction in processing errors

Improved cash flow visibility

Improved compliance

Decreased risk of fraud

Faster reconciliation

0 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.0030+46+54+51+44+49+62+65+66+77 3.1

4.7

5.5

5.1

4.5

4.9

6.3

6.6

6.7

7.7

Page 12: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

12

Additionally, integrating procurement with AP ensures that invoices are from valid suppliers and refer to valid POs, for confidence that only legitimate invoices are processed. What’s more, invoice capture systems learn as they go, so new suppliers or new invoice formats do not disrupt business.

Eighty-three percent of organizations are using electronic procurement solutions or are planning to deploy one, according to a 2015 study by Ardent Partners. What’s more, 77 percent of organizations are using an electronic sourcing solution or are planning to deploy one, Ardent Partners found.

Forty-two percent of invoices are already PO-based, according to a 2015 IOFM study. Moreover, 14.3 percent of all spend is now catalog-based, according to research from Ardent Partners.

Tighter integration between AP and ERP systemsThe ERP is the system of record for AP. It is the source of data (e.g., POs, supplier master files accounting coding/GL tables); it encodes the organization’s policies (e.g. payment terms, approval hierarchies) and the repository for invoice data (e.g., invoice number, amount, due date, approvals, final PO and non-PO invoice posting for payment). Against this backdrop, it is no surprise that more organizations are integrating AP automation (i.e. capture, extraction, validation, approval and posting) with their ERP system and complementary procure-to-pay applications, such as electronic procurement. In this integrated environment, the AP application is delivered as an ERP module.

Fifty-one percent of respondents to IOFM’s 2015 AP technology survey indicated that their organization has either integrated their AP and ERP systems, or plan to within the next three years.

Page 13: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

13

Which of the following solutions do you use now and intend to use in the future?

0  10  20  30  40  50  60  70  80  90  

•  Front-­‐end  imaging  

•  Back-­‐end  imaging/archiving  

•  Data  capture/OCR  

•  AutomaFc  matching  

•  Workflow/invoice  approval  

•  E-­‐invoicing  

•  EDI  

•  ACH  

•  T&E  automaFon  

•  Outsourcing  

•  ERP  integraFon  

•  Automated  tax/legal  compliance  

•  Automated  T&E  expense  management  

•  P-­‐card  rebates  

•  AP  card  rebates  

•  Dynamic  or  variable  discounFng  

•  Supply  chain  financing  

•  Vendor  portal  

•  Business  commerce  network  

•  Cloud  services  

•  Outsourcing  

Which  of  the  follow

ing  solu0ons  do  you  use  now  and  intend  to  use  in  the  future?  

Use  now

 

Plan  to  implem

ent  -­‐  within  6  m

onths  

Plan  to  implem

ent  -­‐  within  1  year  

Plan  to  implem

ent  -­‐  within  3  years  

No  plan  to  im

plement  

Don’t  know  

Front-end imaging

Back-end imaging/archiving

Data capture/OCR

Automatic matching

Workflow/invoice approval

E-invoicing

EDI

ACH

T&E automation

Outsourcing

ERP integration

Automated tax/legal compliance

Automated T&E expense management

P-card rebates

AP card rebates

Dynamic or variable discounting

Supply chain financing

Vendor portal

Business commerce network

Cloud services

Outsourcing

■ Use now

■ Plan to implement – within 6 months

■ Plan to implement – within one year

■ Plan to implement – within three years

■ No plan to implement

■ Don’t know

0 10 20 30 40 50 60 70 80 90

Page 14: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

14

By integrating AP and ERP systems, the process of capturing and managing all invoice data is fully automated and accelerated, enabling organizations to completely streamline and automate procure-to-pay processes. Most ERP systems are not fully leveraged because the business processes that touch these expensive systems have not been optimized. As a result, the same volume of back and forth e-mail, faxes and paper shuffling continues well after an ERP implementation is complete.

Accurately capturing all invoice data as early as possible and integrating it with an ERP system enables organizations to achieve true end-to-end automation of the procure-to-pay process. For instance, integration enables organizations to validate invoices against ERP supplier and PO information, affirm that general ledger coding concurs with the ERP, and ensure correct invoice posting. Cross-referencing invoice data capture to ERP and master data radically reduces errors. And properly maintaining transaction-level backup by associating all pertinent data online with the ERP record provides unparalleled visibility into financial data for approvals, reviews and audits.

IOFM’s 2015 AP technology study found that organizations have deployed a wide array of ERP systems. More than one-quarter of respondents to IOFM’s survey (28.4 percent) indicated that their organization has deployed the Oracle EBS application. Some 17.9 percent of organizations surveyed by IOFM use the PeopleSoft ERP application, while 16.4 percent of organizations use an SAP ERP system, 11.9 percent use the JD Edwards ERP system, and 10.4 percent use the Lawson ERP system.

Products from Great Plains (used by 6 percent of organizations), Epicor (6 percent), and Sage (6 percent), round out the most widely deployed ERP applications, according to IOFM’s survey.

Which ERP systems is your operation using? Please check all that apply.

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0% 28+16+10+18+12+6+0+6+6+2+3+0+3+0+5+8Oracle EBS

SAP

Lawson

PeopleSoft

JD Edwards

Great Plains

Dynamix AXEpicor

Sage

Intacct

NetSuite QADInfor

iRely

Mainframe

I don’t k

now

28.4%

16.4%

10.4%

17.9%

11.9%

6.0%

0.0%

6.0% 6.0%

1.5% 3.0%

0.0% 0.0%

3.0%4.5%

7.5%

Page 15: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

15

There are two primary approaches for integrating AP processing with an ERP system:

• Purpose-built solutions

• Extensible solutions

Purpose-built solutionsPurpose-built solutions are typically specific to an ERP system. They do not integrate with multiple ERPs. They require configuration to meet customer requirements, and are configured for a specific ERP release. They require an upgrade, including testing and validation, when the ERP is upgraded. Additional functionality is provided through custom development, or is incorporated into the offering and is available via an upgrade. These solutions are not easily extensible to other processes.

Customers rarely enhance or evolve these solutions without assistance from the supplier or a partner. Purpose-built solutions automate the AP operations of hundreds of large organizations, delivering an attractive payback through enhanced speed, cost, visibility, control, quality, and cash management.

Purpose-built solutions are ideal for organizations that have standardized on a single ERP.

Extensible solutionsExtensible solutions can be integrated with multiple financial systems. They require configuration to meet individual customer requirements. They are not configured for a specific ERP release, and they do not require an upgrade when the ERP is upgraded. Configuration, enhancements, and extensions can be delivered by the customer or through a partner. Extensible solutions deliver the same benefits as purpose-built solutions: speed, cost, visibility, control, quality, and enhanced cash management. Extensible solutions deliver an attractive return on investment, and are the only practical solution for multiple ERP environments. Users also benefit from greater ease of deployment, ease of use, and ease of change. Further, their capabilities can be leveraged to automate other processes.

The majority of respondents to IOFM’s 2015 AP technology survey said their entire company uses a single instance of the same ERP system. However, 44 percent of respondents reported that their AP team uses a different ERP application than the rest of the company, 44 percent of respondents stated that their AP team uses multiple ERP systems in a single location, 44 percent of respondents reported that their AP team uses multiple ERP systems in multiple locations nationwide, and 45 percent of respondents said their AP team uses multiple ERP applications in multiple locations worldwide.

Page 16: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

16

How is your AP operation using enterprise resource planning (ERP) systems, and how many do you use?

For organizations that use multiple ERP applications, the objective should be unified AP automation across multiple AP applications residing on different ERP platforms (Oracle, SAP, Microsoft, JD Edwards, etc.), allowing for the consolidation of invoice processing and approval workflows.

Regardless of their ERP environment, organizations benefit from AP and ERP integration.

Adoption of cloud-based AP solutionsIt has taken a while but AP processing solutions are making the transition to the cloud. In the same way the cloud has transformed the business case for generic business applications, AP processing in the cloud represents an opportunity for organizations to de-risk their process improvement activities and access powerful process solutions that might have previously been cost or resource prohibitive.

“Lack of internal resources” is the top reason AP organizations do not automate, according to respondents of IOFM’s 2015 AP technology survey. “Lack of capital,” “lack of support from IT for implementation,” “concerns about managing change,” and “lack of technology among employees” are among the other reasons respondents to IOFM’s survey believe organizations do not automate.

■ 1

■ 2

■ 3

■ 4

■ 5

■ More than 5

605040302010

0

Our entire

company or organizatio

n is

on the sa

me ERP syste

m, including AP

We use a different ERP sy

stem in

AP

from th

ose in other d

epartments

Our AP te

am uses multip

le ERP

systems in

one locatio

n

Our AP te

am uses multip

le ERP syste

ms

in multip

le locatio

ns natio

nwide

Our AP te

am uses multip

le ERP syste

ms

in multip

le locatio

ns world

wide

I don’t k

now (select “1

”)

Page 17: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

17

What do you see as top reasons organizations are not switching to automated solutions? (Please rank in order of 1 = most important)

The goal of cloud computing is to reduce upfront cost, on-going costs, and take complexity out of an application’s lifecycle. The business benefits of moving business applications to a cloud-based infrastructure have been articulated at length elsewhere. In summary these benefits include:

• Faster deployment: The cloud takes significant risk out of the deployment of AP solutions by providing organizations with the opportunity to carry out rapid prototyping and testing of invoice processing, workflow and other BPM solutions. For organizations still developing their cloud strategy, AP solutions can be incubated in the cloud before bringing on premise.

• Lower costs: The cloud reduces upfront costs for both IT infrastructure as well as software.

• Capex to Opex: Cloud solutions reduce financial risks by providing a more predictable operational expenditure and eliminating large one-off software upgrade expenditures.

• No obsolescence: Users of cloud-based AP solutions can be assured that they always are using the latest software version and can rapidly leverage new features and capabilities.

0 2.00 4.00 6.00 8.00 10.00 12.00 14.00

Lack of capital

Lack of internal resources to support these projects

Lack of a compelling business case

Lack of an internal champion to push for these initiatives

Lack of support from IT for implementation

Dissatisfaction with current solutions on the market

Concerns about managing the change

Concerns about lack of security or risk of fraud

Poor past experiences with technology initiatives

Competition among other projects internally

Resistance from suppliers

Lack of tech knowledge among employee

Don’t know

Other

3.4

2.8

4.2

4.6

5.4

7.4

6.8

7.6

9.2

8.2

9.8

10.6

12.1

13.3

Page 18: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

18

• Elastic scalability: Unlike on premise business applications, the elastic scalability of cloud solutions ensure that organizations never over- or under-configure their capacity.

• Continuous availability: Cloud solutions use automatic load balancing, failover, and in-service upgrades to provide organizations with high-performance and continuous availability.

Together these benefits combine to deliver a dynamic, responsive AP processing infrastructure that can be rapidly adjusted to meet the business objectives of the AP department or the enterprise.

Respondents to IOFM’s 2015 AP technology survey identified “little to no capital investment” as the top reason that AP organizations are migrating to cloud-based or SaaS solutions. “Minimal IT involvement,” “no required software or hardware,” and “lower cost per invoice” were the other top reasons that AP organizations are migrating to cloud-based or SaaS solutions, IOFM’s survey found.

What do you see as top reasons driving AP operations to move to cloud-based solutions or software-as-a-service? (Please rank in order of 1 = most important)

Little to no capital investment

Minimal IT involvement

Lower cost per invoice

Fast ramp-up time

Reduced risk

Not sure

0 1.00 2.00 3.00 4.00 5.00 6.00

No required software or hardware

2.1

2.5

3.3

3.7

5.0

5.8

5.7

Page 19: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

19

Thirty-five percent of respondents to IOFM’s 2015 AP technology indicated that their organization has deployed a cloud-based AP solution, or plans to deploy one within the next three years.

Which of the following solutions do you use now and intend to use in the future?

0  10  20  30  40  50  60  70  80  90  

•  Front-­‐end  imaging  

•  Back-­‐end  imaging/archiving  

•  Data  capture/OCR  

•  AutomaFc  matching  

•  Workflow/invoice  approval  

•  E-­‐invoicing  

•  EDI  

•  ACH  

•  T&E  automaFon  

•  Outsourcing  

•  ERP  integraFon  

•  Automated  tax/legal  compliance  

•  Automated  T&E  expense  management  

•  P-­‐card  rebates  

•  AP  card  rebates  

•  Dynamic  or  variable  discounFng  

•  Supply  chain  financing  

•  Vendor  portal  

•  Business  commerce  network  

•  Cloud  services  

•  Outsourcing  

Which  of  the  follow

ing  solu0ons  do  you  use  now  and  intend  to  use  in  the  future?  

Use  now

 

Plan  to  implem

ent  -­‐  within  6  m

onths  

Plan  to  implem

ent  -­‐  within  1  year  

Plan  to  implem

ent  -­‐  within  3  years  

No  plan  to  im

plement  

Don’t  know  

Front-end imaging

Back-end imaging/archiving

Data capture/OCR

Automatic matching

Workflow/invoice approval

E-invoicing

EDI

ACH

T&E automation

Outsourcing

ERP integration

Automated tax/legal compliance

Automated T&E expense management

P-card rebates

AP card rebates

Dynamic or variable discounting

Supply chain financing

Vendor portal

Business commerce network

Cloud services

Outsourcing

■ Use now

■ Plan to implement – within 6 months

■ Plan to implement – within one year

■ Plan to implement – within three years

■ No plan to implement

■ Don’t know

0 10 20 30 40 50 60 70 80 90

Page 20: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

20

SummaryAP processing has long been characterized as a costly, inefficient and time-consuming function.

However, six trends are transforming AP:

1. Decline in paper invoice volumes

2. Wider adoption of workflow

3. Growth of mobile capture and document access

4. Better alignment of procurement and AP

5. Tighter integration between AP and ERP systems

6. Adoption of cloud-based AP solutions

Organizations that take advantage of these trends are able to lower operations costs, accelerate cycle times, strengthen supplier relationships, reduce risk, and improve working capital management.

Importantly, these trends also provide organizations with a competitive edge against their peers.

About the SurveySome 105 individuals responded to IOFM’s 2015 AP technology survey.

AP managers accounted for the majority of the survey respondents (52.5 percent), while AP supervisors comprised 29.5 percent of the respondents. Other job functions represented by survey respondents included: shared services manager (identified by 6.6 percent of the survey respondents), controller (3.3 percent), operations manager (1.6 percent), shared services supervisor (1.6 percent), chief executive officer (1.6 percent), auditor (1.6 percent), and finance executive (1.6 percent).

Job function

23225229262Controller, 3.3%

Finance executive, 1.6%Auditor, 1.6%

AP manager, 52.5%

Shared services supervisor, 1.6%

AP supervisor, 29.5%

Operations manager, 1.6%

Shared services manager, 6.6%CEO, 1.6%

Page 21: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

21

Nearly half of the survey respondents (44.3 percent) represented organizations with at least $500 million in annual revenues. Some 10.6 percent of survey respondents came from organizations with more than $3 billion in annual revenues, while 18.3 percent of respondents represented organizations with between $1 billion and $2.9 billion in annual revenues and 15.4 percent of survey respondents came from organizations with between $500 million and $999.9 million in annual revenues.

Company’s annual revenues

Survey respondents represented organizations in a wide range of industries. Some 16.7 percent of survey respondents represented organizations in the healthcare industry, while 13.3 percent of survey respondents came from government and non-profit organizations, 11.1 percent of respondents represented financial services companies, and 10 percent of respondents work for manufacturers.

11+18+15+14+8+8+14+12Less than $10 million, 12.5% More than $3 billion, 10.6%

$1 billion to $299.9 billion, 18.3%

$500 million to $999.9 million, 15.4%

$100 million to $499.9 million, 13.5%

$50 million to $99.9 million, 7.7%

$25 million to $49.9 million, 7.7%

$10 million to $24.9 million, 14.4%

Page 22: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

22

Which of the following best describes your company’s industry?

The majority of respondents said their organization processes between 1,000 invoices and 2,499 invoices per month with the plurality indicating that they process between 76 percent and 100 percent of their invoices as paper. One-fifth of the respondents reported that their organization processes less than 1,000 invoices per month, with 42 percent processing the majority of their invoices as paper.

How many invoices do you estimate your accounts payable department processes per month, and what percentage are paper-based?

Advertising/marketing/PR/media/entertainment

Construction/engineering/mining

Energy/utilityFinancial services (banking, insurance,

brokerage, investments)

Government and nonprofit

Healthcare (providers and payers)

High tech/telecommunications/information technology

Manufacturing (consumer goods)

Manufacturing (industrial goods)

Pharmaceuticals and medical products

Professional services (legal, consulting, accounting, architecture)

Real estate

Retail trade

Transportation (airlines, trucking, rail, shipping, logistics)

Travel and leisure (hotels)

Wholesale/distribution

0 5.0 10.0 15.0 20.0

2.2%

4.4%

7.8%

11.1%

13.3%

16.7%

1.1%

8.9%

10.0%

2.2%

3.3%

5.6%

7.8%

2.2%

3.3%

■ Less than 5 percent

■ 6 to 10 percent

■ 10 to 25 percent

■ 26 to 33 percent

■ 34 to 50 percent

■ 51 to 66 percent

■ 67 to 75 percent

■ 76 to 100 percent

35

30

25

20

15

10

5

0-1 to 999 -1,000 to

2,499-2,500 to

4,999-5,000 to

9,999-10,000 to

24,999-25,000 to

49,999-50,000+ Not sure

Page 23: Six Promising Trends in Accounts Payable Six...Outsourcing ERP integration Automated tax/legal compliance Automated T&E expense management P-card rebates AP card rebates Dynamic or

SIX PROMISING TRENDS IN ACCOUNTS PAYABLE

©2015 IOFM, Diversified Business Communications. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic or mechanical, without prior written permission of the Institute of Finance & Management.

23

Approximately 80 percent of the respondents employ between one full-time equivalent (FTE) and 10 FTEs for invoice processing, with the majority of FTEs dedicated to manual invoice processing.

How do you handle invoice processing, and with how many full-time equivalent employees (FTEs)?

About LexmarkLexmark (NYSE: LXK) creates enterprise software, hardware and services that remove the inefficiencies of informa-tion silos and disconnected processes, connecting people to the information they need at the moment they need it. Open the possibilities at www.lexmark.com/software-solutions.

About IOFMThe Institute of Finance & Management (IOFM) is the leading source of information, tools and resources for finance professionals across our focus areas. For more than a quarter of a century, our newsletters, reference publications, online information services and conferences and events have provided authoritative guidance to corporate man-agers across a wide range of disciplines. Learn more at www.iofm.com.

120

100

80

60

40

20

0

■ Manually

■ Electronically

1-10 FTEs 11-20 FTEs 21-50 FTEs 51-100 FTEs 101-200 FTEs 201or more FTEs

Not sure


Recommended