In an increasingly competitive, global economy, as companies strive for greater efficiency, lower costs and increased visibility and access to data, automating and digitizing many business functions have already taken place. Financial automation has played an increasingly important role in accounts payable (AP), accounts receivable (AR), and Treasury; that role has led to important benefits for companies overall.
Among the technologies that have proven most effective is electronic invoicing (e-Invoicing) which has lowered costs and increased efficiency for both AP and AR. On the AR side, e-invoices have led to savings of approximately €6.60 ($7.40) per invoice. But the benefits go beyond simply cost:
- For the finance functions, e-invoicing leads to improved cash flow, reduced DSO, and the ability to identify (and therefore prepare for) payment delays.
- For the company overall, e-invoicing provides the ability for business continuity and agility. That is incredibly important when one considers our current COVID crisis which has resulted in people working remotely and thus increasingly dependent on electronic capability.
- When it comes to processes, e-invoicing eliminates the need for employees to engage in the repetitive processes of creating, delivering, and tracking invoices; giving them the freedom to engage in more strategic, value-added tasks.
Corcentric has created a white paper, Building the Business Case for e-Invoicing, that illustrates why organizations that have not already adopted this technology should do so. The paper identifies a wide range of pain points that companies still relying on paper and manual processes may be experiencing, and then provides nineteen questions that AR professionals should be asking, including:
- How much does it cost to print and post each invoice, including the time spend stuffing envelopes?
- Do you have a reliable way to track the invoices that were sent?
- How much time is spent chasing late payments?
- How much time is spent on payment reconciliation?
6 steps to building your e-invoicing case
Once you answer these nineteen questions, it should become clear that e-invoicing is the right technology for your company. Once you’ve identified the need for e-invoicing, you need to build the case for adoption. There are six steps necessary to make that case.
- Identify who is experiencing the pain – Not everyone is impacted in the same way by a reliance on legacy processes. Once you know who experiences that pain, you can then identify the objectives that will best benefit those people, thus making them advocates for adoption.
- Articulate the benefits – Spell out the pain points and how e-invoicing specifically addresses and eliminates that pain at a department and company-wide level so that benefits can be seen by all. Prioritize the recommendations to identify the greatest ROI.
- Winning stakeholder buy-in – Appeal to the specific needs to whomever you are addressing: for the CEO and COO, improved cash flow, competitive advantage, and increased agility for business continuity will make the biggest impression. For the CFO, reduced DSO and improved cash flow may be the best-selling points. For those in charge of IT, the sale might even be easier as that department is well aware of the benefits technology offers.
- Consider outsourcing – Oftentimes, companies may balk at transitioning to e-Invoicing, concerned with the increased burden this may have on IT, plus the cost of creating and implementing the technology. An additional concern is a loss of control. However, working with a third-party provider eliminates a number of concerns. Control still remains with you…you set the parameters and requirements, the provider accepts the responsibility and the risk; IT has little involvement; and the ROI is realized in a timely manner. You could decide to undertake this initiative with your internal IT team, but that can end up causing considerable disruption and require significant upfront investment.
- Evaluate the market – As with any new initiative, you should do your due diligence as there are different types of e-invoicing solutions and you want to ensure the one you select will work best for your organization’s needs. Cost should not be your overriding concern; overall value when it comes to savings, efficiency, visibility, ease of use, and scalability should be.
- Set expectations – It is important to set realistic expectations for the timing of implementation. That timing may be mitigated when you work with your outsourced provider. Again, if you do this internally, the timing will be considerably longer, you may have to hire additional staff that will require training (leading to an even longer time extension.
Download our white paper, “Building the Business Case for e-Invoicing” and see how Corcentric can help make that case for you.