Electronic Invoicing Strategies for the Mid Market - Invoice Automation for Small & Medium Enterprises (SME)

Invoice Automation for WHITE Small & Medium Enterprises (SME) PAPER Electronic Invoicing Strategies for the Mid Market Featuring Insights on... Challenges with Current State Processing Factors Driving Interest in Invoice Automation Top Automation Goals for 2010 Buyer and Supplier Benefits of Automation Advantages of On-Demand Solutions Convergence of eInvoicing and Outsourced Capture Integrating Invoice and Expense Management Sponsored by BasWare Q2 2010 www.paystreamadvisors.com SME Invoice Automation Building a Case for Invoice Automation Until recently, accounts payable (AP) automation initiatives were largely limited to Fortune 1000 companies, which had the human and capital resources to implement Case for Automation and manage these applications. However, today, we are evidencing this trend trickling down to small and medium enterprises (those with annual revenues under $500 million) as well owing to two major factors: • Small and medium-sized companies are struggling with manual, paper- driven processes and are realizing that automation can alleviate most of the challenges they face in their day-to-day operations. • The availability of affordable, easy-to-implement and use technology solutions is driving a renewed interest in AP automation for these smaller organizations. Challenges Inherent to Manual Processes PayStream’s Q1 2010 Invoice Automation Survey into the AP operations of more than 200 small and medium enterprises (SMEs) revealed that these organizations are plagued by the hassles associated with manual processes: • Paper-Based Processes: Almost two-thirds (60 percent) of survey respondents stated that receiving a majority of their invoices in paper format was one of the main reasons they are unable to streamline their AP processes. • Manual Data Entry: More than half the SMEs (51 percent) stated that one of the primary challenges they face in the AP process is manual data entry and the errors and inefficient processes that arise as a result of this. • Inability to Route Invoices: Decentralized invoice receipt and lack of workflow tools have made it very difficult for 50 percent of organizations to route invoices and approve them in a timely manner, leading to late payments and missed discounts. Decentralized invoice 17% receipt Figure 1 CHALLENGES High number of discrepancies IN THE INVOICE 17% MANAGEMENT and exceptions PROCESS Lost or missing An over-reliance 21% on people and invoices paper-based processes Manual routing of invoices emerged as the for approval 50% biggest problem plaguing AP Manual data entry and departments 51% ine cient processes Majority of invoices received 60% in paper format © 2010 PayStream Advisors, Inc. • info@paystreamadvisors.com • www.paystreamadvisors.com 1 SME Invoice • High Processing Costs: Our research shows that paper invoice receipt Automation and manual routing and approval of documents adds days to the processing cycle and dollars to the processing costs, which smaller organizations can ill afford. Case for Automation Factors Driving Interest in Automation The results of the Invoice Automation survey and our research leave no doubt that paper invoices are the enemy of efficiency in the accounts payable department. The range of problems faced by AP professionals in their day-to-day operations indicates that there is tremendous potential for improvement by automating the invoice management process - namely invoice receipt, matching and approval workflow. While numerous AP automation options have been available for many years, SMEs are just now starting to dip their toes in the automation waters. What factors are driving their interest in automating AP operations? Why does it make sense to automate now? A paradigm shift is clearly underway that is shaking manual and paper-based processes. Financially savvy SMEs understand that automating the AP department has tremendous potential to not only deliver tactical benefits around cost containment and productivity enhancements but also strategic advantages around vendor relations and working capital improvements. • SMEs that were initially skeptical about AP automation are learning from the experiences of their larger counterparts and now see the tremendous potential of automating AP operations. • An interest in transforming the accounts payable department from a cost center to a profit center is driving organizations to seek out innovative means to achieve this objective. • A competitive business environment is prompting organizations, especially small and medium-sized ones, to focus on reducing processing costs and increasing efficiencies associated with invoices and employee expenses. • Streamlining the AP process has become extremely important in a tough economy where adequate cash flow and greater control over payables are critical in maintaining liquidity and sustaining business operations. • An increased interest in early payment discount capture is driving smaller organizations to investigate tools and technologies that enable them to compress their invoice receipt-to-approval cycles. • The evolution of on-demand and Software-as-a-Service (SaaS) delivery models has significantly lowered the upfront cost of implementing AP solutions and reduced the hassle of maintaining them. • SaaS solutions that defer solutions costs over a longer period of time are becoming appealing to companies that find it easier to get budgetary approval for operating expenses over capital expenditures. • The convergence of electronic invoicing and front-end invoice imaging presents organizations with a single, comprehensive solution that can manage both paper and electronic invoices through a common process. • Availability of invoice and expense management capabilities from a common platform delivers a unified view into all non-payroll spend for organizations and allows them to leverage the same solution for both processes. © 2010 PayStream Advisors, Inc. • info@paystreamadvisors.com • www.paystreamadvisors.com 2 SME Invoice • Value added-services delivered by solution providers around supplier Automation recruitment have enabled buyer organizations to bring suppliers onboard more quickly. Case for Top Automation Goals for 2010 Automation Given these factors, it is not surprising that a number of organizations, even SMEs, are taking a hard look at invoice automation tools and technologies. • Implementing or increasing electronic invoicing emerged as the most popular option for more than a third (40 percent) of SMEs stating that this was the top priority on their 2010 automation plan.