New solutions mean SMEs can now reap the benefits of Purchase to Pay automation
Most small to medium-sized enterprises concluded a long time ago that financial process automation wouldn’t work for them. That's no longer true.
Large enterprises with deep pockets started down the road to P2P automation a long time ago, and have benefited from automating at least some parts, if not all of the process. For them, it made sense to invest in e-invoicing and workflow technologies that could cut these processes to size.
For companies under $250 million in revenues though, the large capital outlays required, coupled with the prospect of long and expensive implementations and the difficulty of system transitions meant the adoption of such systems was a daunting prospect and unlikely to lead to a big return on investment. So, they've sat on the sidelines, laboring under manual processes with little of the visibility that could enable them to be more strategic.
That’s changed, says a new report from PayStream Advisors, underwritten in part by Coupa. The new generation of cloud solutions are bringing P2P automation within reach of smaller enterprises.
It’s time to for SMEs to rethink the cost-benefit equation, says PayStream. While long-held concerns about affordability, scalability and time to implement may have been valid in the past, cloud software subscription models are lowering barriers to entry and making integration with ERP and other systems easy and fast.
Because these solutions are hosted, there’s no need for on-premise IT involvement - services are web-based and can be accessed from any device with internet connectivity, including mobile devices. Plus, software as a service developers are increasingly conscious of user experience, so systems are designed with ease of use in mind and can be picked up quickly. With these cost and implementation hurdles lowered, many of the same benefits of automation enjoyed by larger enterprises are now within reach of smaller ones. And they're worth reaching for.
It’s not even necessary to automate the whole process in one fell swoop; even partial automation can yield a positive return on investment, moving you along the road to future automation and perhaps even helping fund it. The important thing is to evaluate your business needs and pick a place to get started. PayStream offers these steps toward P2P automation maturity:
Front-End Document and Data Capture –Invoices are scanned upon receipt, and data is extracted. Validation rules established at the beginning of the process ensure that the data extracted is accurate, with more advanced systems putting the responsibility of exception and discrepancy correction back onto suppliers. This is a massive advance over back-end imaging and a vital step in the process of centralization and integration of processes.
Front-End Capture with Matching and Workflow – In a more advanced form, invoice automation solutions combine front-end document and data capture with matching and workflow capabilities to for invoice receipt and approval processing. These solutions automate more of the invoice receipt-to-pay cycle than stand-alone document and data capture solutions, and they enable AP departments to define how different types of invoices are processed and routed. Many of these solutions are mobile, with approvers are typically notified via email when invoices require their approval, and some software even allows for direct invoice approval from the emails.
Combining Electronic Invoicing with Imaging and Workflow – The most sophisticated invoice automation solutions combine front-end document imaging and data capture with e-invoicing and automated workflow. This lets organizations process all invoices—whether they are submitted in paper or electronic format—through a single, common method. In this scenario, suppliers are transitioned from paper to electronic invoice submission, usually through a stand-alone portal or a shared supplier network. Most solutions offer suppliers multiple options for submitting electronic invoices, such as direct integration with ERP and billing applications, flipping purchase orders into invoices, and web forms and templates that can be used to generate electronic invoices.
T&E Management – Organizations of all sizes can benefit from automating their travel and expense (T&E) processes. Automation provides complete end-to-end control of report submission, approval, reimbursement, reporting with data analysis, and integration into back end accounting systems. Having this integration provides more visibility into spend, with accurate accounting and detailed reporting for every transaction and expense category.
E-procurement – Electronic procurement solutions let organizations connect to vendor catalogs, generate requisitions, use workflow tools for approval processing, and deliver purchase orders to suppliers electronically, making paperless environments possible. Proactive technology adopters have learned that in many cases automation diminishes procure-to-pay cycle time from weeks to days, delivering a rapid return on investment. Adopters can not only achieve productivity gains and cost reductions, but also obtain traceable Sarbanes-Oxley audit trails.
SMEs are feeling the most pain - and losing the most revenue - due to the manual routing of invoices, so e-invoicing can be a great place to dip your corporate toes in the water for P2P transformation. Or, maybe e-procurement is the right place to start. Every organization will have different needs and resources; the point is, there are a wide variety of new solutions to choose from. The important thing is to pick a place and get started.
To learn more, get the full report, Automating P2P for Small to Medium Enterprises: