Underwritten in part by
Invoice Receipt Management
Report 2015
Increasing Electronic Invoice Adoption Through Strategic Automation
Q3 2015 | Featuring insights on...
» Current Market Trends in Invoice Receipt Solutions » Benefits of Electronic Invoice Receipt Technology » Barriers to eInvoicing and B2B Network Adoption » Strategies for Increasing Supplier Adoption and Invoice
Receipt Success
Introduction 3 Benefits of Electronic Invoice Receipt 4
Working Towards the eInvoice 6
Overcoming Barriers to Electronic Invoice Adoption 9
Strategizing Invoice Management 12
Conclusion 15
Corcentric 16
About PayStream Advisors 20
Introduction
One of the most revolutionary technologies in Accounts Payable (AP) automation is electronic invoicing. An eInvoice is one that is delivered electronically in a standardized format from a supplier to a buyer through the assistance of a network. The eInvoice’s consistent format, secure connection, and direct integration reduce process time, costs, and mistakes.
For years, research has proven the competitive advantage of
eInvoicing software, and business leaders have encouraged adoption of eInvoicing and B2B networks. However, research also shows that even after extensive onboarding efforts by both solution providers and their customers, supplier participation in eInvoicing networks has remained low. Without the suppliers’ involvement, buying organizations also hesitate to adopt these solutions, and in the end, the value of eInvoicing is lost for all parties.
Benefits of Electronic
Invoice Receipt
Electronic invoices go directly from a supplier to a buyer in 1 of 2 ways: 1. Both parties integrate with an open business network that enables the invoice (in XML or similar formats) to move directly from one AR system or ERP to another.
2. Suppliers enter invoice information into a standardized web form on a supplier portal. The invoices are then imported into a buyer’s system.
The common denominator with all eInvoices is that their data is structured. Once that structure is determined and put in place, it doesn’t change, eliminating errors in invoice formatting and removing the necessity for data entry and exception management processes. This streamlined transmission results in many benefits for buying organizations.
PayStream Advisors surveyed over 200 individuals employed in many different industries, compiling data reflecting current attitudes towards and usage of invoice receipt automation software. According to
In addition to these improvements, other benefits of eInvoicing include the ability for AP to focus on higher-value activities, improved cash management, reduced fraud, more secure payments, and improved opportunity for process analytics.
eInvoicing also offers many benefits for suppliers. These include faster payments, fewer rejected invoices, and increased productivity. Suppliers can also experience enhanced accounts reconciliation and improved customer relationships through faster, more secure payments. In addition, eInvoicing brings suppliers better cash
management and working capital, and gives them access to alternative finance options.
True eInvoicing is the most cost-effective and efficient method for AP processing overall. Because eInvoicing eliminates paper and manual data entry, it also removes the exception management process present in other methods of invoice receipt. Electronic invoices can go straight to the approver and then straight to payment, i.e., straight-through processing. This capability is one of the greatest advantages of eInvoicing.
Figure 1 Most Organizations Hope to Reduce Processing Costs, Errors, and Time “What factors are driving your organization to consider an electronic invoicing solution?” 54% Reduction in labor / processing costs 31% Fewer lost or missing
invoices
30% Quicker approval cycles
25% Better visibility across the
transaction lifecycle
24% Increased ability to capture
discounts 23% Increased on-time payments 17% Reduction in exceptions/ discrepancies 10% Fewer duplicate invoices
9% Improved vendor
satisfaction
Working Towards the
eInvoice
Despite the benefits of electronic invoices, they are among the least-received formats in invoice processing today. Instead, most organizations receive more paper, fax, and emailed invoices than electronic invoices, see Figure 2.
While eInvoices are the most efficient way to manage B2B invoicing, they are simply not widely used or welcomed by suppliers. In reality, suppliers are sending a variety of different invoice formats, and due to their fear of eInvoicing network fees, lack of education of the benefits, and other barriers, they will likely continue to do so. However, there are alternative strategies that organizations can use to successfully handle the receipt of other, paper-based invoices.
Figure 2 Organizations Are Receiving Invoices in a Wide Range of Formats “What amount of invoices does your organization receive in the following formats?”
Paper
MOST SOME FEW NONE
Emailed, scanned, and faxed invoices cannot be processed like a true eInvoice, but they can still be converted into a standardized electronic format using efficient front-end management strategies. Methods for digitizing paper-based documents include:
OCR Data Capture: In-House Scanners
Optical Character Recognition (OCR) is the electronic conversion of scanned images or text to a machine-encoded document. This conversion speeds up the transfer of information, and enables easy storage and quick retrieval of that information. The benefits of OCR are numerous—it reduces storage, paper use, and costs, improves document retention, privacy, and security, and improves vendor relationships through faster processing times.
Organizations can buy their own scanners for in-house paper invoice processing—either one with built-in OCR technology or one that routes the invoice directly to an online mailbox for data capture and validation. These scanners are beneficial for companies that have numerous paper invoices but not enough resources or bargaining power with their suppliers to switch immediately to an eInvoicing network. OCR Data Capture: Mailroom Services
Organizations can route or send their paper invoices to a designated invoice processing center, or digital mailroom, where the invoices are opened and scanned into the system with OCR technology. In addition, these mailrooms incorporate extensive data validation procedures before the invoices are put into the organization’s approval workflow, such as double-blind verification. By outsourcing paper invoice receipt, organizations eliminate the hassle of suppliers who are unwilling to move away from paper.
OCR Data Capture: Email Extraction (PDFs)
Online Portals
Along the same lines as an online mailbox, an invoice upload portal allows the supplier to load their invoice files (in PDF or other format) directly to the web. This is different from the web-based eInvoicing forms found in a supplier portal, as it still relies upon data capture technology to extract and convert the invoice content.
Multi-Method Invoice Receipt Mix
Overcoming Barriers to
Electronic Invoice Adoption
According to PayStream’s research, only 22 percent of organizations are using an eInvoicing solution, see Figure 3. OCR technology is only used by 21 percent of organizations, and front-end invoice scanning solutions are used by 49 percent. While over one-third of organizations are planning on implementing an eInvoicing solution, manyorganizations have no plans to implement invoice receipt automation at all.
Part of the reason eInvoicing solutions have such low adoption is because they are often difficult and expensive to set up. It is also difficult to get a significant amount of suppliers to integrate, unless the buyer is a very large organization with enough power to force their suppliers into participation.
In Latin American and Europe, eInvoicing adoption has been
standardized and enforced by government regulations. Transforming eInvoicing adoption from a private sector to a public sector initiative has led to much higher participation rates in these countries than among North American businesses. While eInvoicing should be the ultimate goal for any organization, there are many barriers in the current North American B2B space. Without full government Figure 3
Many Organizations Have No Plans to Implement Invoice Receipt Automation “Which of the following technologies do you currently use or are planning to implement within the next 12 months?”
49%
21% 22%
Currently Using Planning to Implement in the Next 12 Months
29% 16% 13% 49% 35% 66% Neither Front-end Imaging (Scanning)
intervention, full U.S. market adoption will not become a reality for years to come.
When asked about their largest barriers to adoption, respondents from U.S. organizations listed integration difficulties, supplier adoption, and internal change management as the greatest challenges, see Figure 4.
Today’s cloud-based eInvoicing and invoice receipt solutions are growing easier to install and customize, nullifying many of the integration issues that have worried organizations in past years. Moreover, internal change management and lack of executive sponsorship are problems that can be readily addressed with the proper education about the benefits of eInvoicing. However, supplier resistance is a more difficult battle. It involves forces that are not as firmly in the buying organizations’ control, including the lack of education among suppliers on the value of eInvoicing and the perception that adoption is not worth the trouble.
Some of the top reasons for supplier resistance include: Supplier Network Fees
Problem: For many years, supplier networks charged suppliers fees, measured either by time-based subscription or by usage. These costs created an automatic resistance from suppliers trying to protect their bottom line.
Solution: Today, the market is moving away from this model and most B2B networks are free for suppliers, greatly increasing supplier adoption.
Figure 4 Most Organizations
Struggle with Integration of In-House Systems and Poor Supplier Adoption “What are the greatest challenges within your organization around migrating invoices from paper to electronic format?”
Gaining supplier adoption 42%
Internal change management /
lack of executive sponsorship 37% Integration with in-house
and supplier systems 47%
Solution does not function
Difficult Integration Problem: Some networks
require complicated connectivity procedures, and suppliers
without the IT or cash resources steer clear of adoption
endeavors.
Solution: With technology moving steadily towards the cloud, and with the increase in many-to-many connectivity, B2B networks are becoming easier to adopt without the expense of IT and lengthy implementation times. Extensive Adoption Requirements
Problem: Many suppliers feel that the amount of information required upon network
registration is not worth their time.
Solution: Networks are now making it very simple to sign on. Many only require a little bit of information from supplier in the beginning of their involvement, and let them add more over time as they see the value of the network services.
Lack of Valuable Tools
Problem: Suppliers often believe there are not enough benefits to network adoption and eInvoicing activity, in large part because supplier networks have failed to offer a robust set of tools that actually bring real value to the supplier.
Solution: More of today’s software providers are shifting their focus towards the supplier side of B2B activity. Many solutions offer supplier self-service tools that bring more value and enable a healthlier supplier base.
Lack of Invoice Receipt Diversity Problem: By not allowing
suppliers to submit their invoices in a way that suits their needs, such as email, buyers are hurting adoption.
Solution: Solution providers are including more diverse invoice receipt options within their offerings, such as mailroom services in addition to an eInvoicing network.
Buyer-Centric Solutions Problem: For many years, the focus has been on creating eInvoicing solutions that bring cost reductions and smooth processes to buyers, while largely leaving out the needs of suppliers.
Strategizing Invoice
Management
The benefits and efficiency of eInvoicing are dependent on supplier participation, but full participation is nearly impossible without diverse, supplier-focused automation strategies. With this focus in mind, organizations can use the following steps for more successful electronic invoice management:
1. Target All Suppliers
In the past, buying organizations and solution providers have assumed that the majority of invoices come from a small portion of the supplier base. For this reason, many companies only aggressively target a small number of their suppliers for eInvoicing adoption. While this may work in the short-term, it is not a scalable strategy, and buying organizations are missing out on huge long-term savings. In addition, with the
increasing globalization of B2B activity, organizations have access to a wider and more diverse group of suppliers than ever before. The idea that a few suppliers provide most of the invoices no longer holds true for many organizations.
To adjust to this changing environment, organizations should
implement a diverse mix of invoice receipt strategies, targeting all their suppliers—not just the ones that make the most noise.
2. Implement a Diverse Mix of Invoice Receipt Methods Figure 5 illustrates a possible scenario for an AP automation implementation that incorporates a diverse mix of invoice receipt methods. The figure is based on a medium-sized investment company that receives 30,000 PO and non-PO-based invoices a year. This
3. Choose a Supplier-Focused Solution
A solution that has the needs of a supplier in mind will not only offer diverse receipt methods and a B2B network at no cost to the supplier—it will also feature Dynamic Discount Management (DDM) functionality. These solutions allow for changing discount rates based on the number of days the invoice is paid early. This ensures faster cash flow for the supplier and speeds up invoice processing as a whole. 4. Use a B2B Network with Supplier Value
Today’s supplier networks provide self-service functionality to
suppliers, such as self-registration, and they allow suppliers to initiate transactions or transmit information over the network through
catalogs, invoices, or contracts. Suppliers can use the portal to submit and check on the status of invoices, as well as increase their sales opportunities through access to tens of thousands of buyers.
They experience lower costs to service customers and improved communications with buyers through dispute resolution and help desk support. The network’s system architecture helps ensure safe communication and data exchange between buyers and sellers within the application.
In addition, supplier networks provide a many-to-many platform that enables trading partners to participate using several data and integration formats. These networks allow trading partners to engage in multi-tier, multiple-party processes. They also provide detailed analytics and benchmarking data. These features eliminate the hassle and IT difficulties that cause many suppliers to avoid participation in networks altogether.
5. Move Away from Manual Processes at a Consistent Pace While it may be most effective for some organizations to choose a solution with a strong front-end scanning component, this strategy should ideally only be a stepping stone towards a fully electronic invoicing system. Over time, organizations should consistently and proactively target all suppliers that are not in their B2B network and try to gain full eInvoicing participation.
Conclusion
Corcentric
Corcentric is a provider of cloud-based financial process automation solutions that have enabled some of the world’s largest organizations to manage and protect their financial assets. Corcentric’s Accounts Payable (AP) and Procure-to-Pay (P2P) automation solutions help reduce business costs, streamline processes, and provide the visibility needed to make critical business decisions.
Corcentric allows companies to manage 100% percent of their invoices electronically, creating a conduit between procurement, accounts payable, accounts receivable, and suppliers.
Corcentric’s COR360 AP solution incorporates multiple invoice submission and capture capabilities, customizable workflows, automated matching, and advanced reporting to help companies increase efficiency and reduce costs associated with invoice and payment management. In addition, COR360 includes a supplier
network to connect suppliers to the invoice process, enabling them to submit invoices electronically and review invoice and payment statuses via a portal.
Founded 1998
Headquarters McLean, Virginia
Other Locations Cherry Hill, NJ; Fairfield, NJ; Atlanta, GA; McLean, VA; Downers Grove, IL; Coral Springs, FL
Number of Customers N/A Number of Employees 220
Target Verticals All Verticals
Awards/Recognitions SSAE16 Type II SOC 1 certified, PCI Compliant
Electronic Invoicing and Invoice Receipt
Corcentric’s COR360 solution is offered as a hosted service, and is a multi-tenant SaaS solution that supports the full invoice lifecycle, including purchase order requisitioning, electronic invoicing,
day one with a combination of electronic invoicing and outsourcing all paper scan and capture to Corcentric.
COR360’s eInvoicing system eliminates the paper trail entirely by providing suppliers with a comprehensive supplier network for submitting eInvoices.
The solution integrates easily with any ERP or accounting system. In addition, the solution can be accessed from anywhere in the world at any time, via all smartphone or tablet devices.
COR360 allows users to go completely paperless by outsourcing scanning and data capture hassles. Corcentric’s Invoice Virtualization Center provides invoice conversion services through scanning and data capture to convert paper invoices to electronic invoices. Invoice images also can be emailed directly from suppliers to COR360
and automatically sent through the capture process after receipt. Corcentric works with suppliers to transition them from submitting paper invoices to submitting eInvoices through the Corcentric Supplier Network. Corcentric does not charge suppliers any eInvoice fees or require them to create specific EDI formats. Corcentric can accept any EDI format, converting the EDI through the Corcentric Supplier Network to the required eInvoice format.
Once invoices are submitted to COR360, data is validated against a client’s AP system/ERP to ensure that data such as supplier name, remit-to addresses, PO numbers, and GL allocations is valid. Invoices are also validated using duplicate invoice checking, and can be rejected if necessary. Delegation of authority routing is validated against
configured user hierarchies and the approval authority of the user. Additional Invoice Management Functionality
matching process can be automatically routed to the appropriate user (e.g., purchasing, receiving, etc.) for resolution based on the reason the invoice failed the match.
Clients have full capabilities to design and modify their own workflows at any time, with no IT expertise required. Invoices that require
approval can be automatically routed according to the delegation of authority rules in COR360 and can be quickly approved and GL account-coded. Electronic history of routing and user approval is maintained in the audit report for every invoice. Clients can configure escalation notifications that can alert both the user and their superior of invoices that need approval.
Approved invoices can be scheduled for payment through the COR360 solution via a dashboard for payment as a paper check, ACH, or on a p-card. Corcentric works directly with suppliers in an effort to move them away from paper checks to ACH, wire, or p-card payments. Buyers can determine which invoices to pay early to capture early payment and sliding scale discounts.
Supplier Services
There are no supplier fees to connect to the Corcentric Supplier Network for eInvoices or to access the Corcentric supplier portal. The supplier portal provides a self-service mechanism for suppliers to view payment information, resolve invoice disputes, and submit invoices. Clients have full control of exactly how much information is available in the supplier portal.
Reporting and Analytics
The COR360 solution provides real-time dashboards, including drill-down capability for complete analysis. Standard reports can monitor accruals, user metrics, system administration, and departmental analysis. Ad hoc reporting tools are also available, allowing any user to create custom reports as required for further invoice analysis, with no IT expertise needed. All reports can be exported to Excel or CSV files. Pricing and Implementation
Corcentric provides 24/7 customer support via a hotline, and provides in-depth training for both users and system administrators at no additional cost. In addition, online help is available within the COR360 product.
