Palette’s UK sales director, Lucy Beck looks at how cloud applications can enable organisations to migrate from paper-based invoicing in days, not months, to boost efficiency and cut costs
It’s nearly 40 years since an article in the leading US title, BusinessWeek, suggested that the workplace of the future would be paperless, because all transactions would be automated and digitised. At the same time, it was predicted that traffic jams would be consigned to history, because everyone would have their own personal helicopter.
Although moves have been made towards reducing paper use in business, we’re still using it at a staggering rate. Global paper consumption was around 400 million tons in 2012, and is set to grow by a further 10% by 2015. So it’s no surprise that there are major drives across the EU to reduce paper usage for accounts payable, with the aim of cutting costs and waste, and boosting business efficiency.
However, this raises the questions of how to do it – and who is going to pay for it? Businesses are already enduring death by a thousand cuts in a difficult business climate. IT and finance departments are under intense pressure to implement more efficient processes and support changes to infrastructure, yet with diminished budgets and resources. They need quick pain relief for their cuts without having to rely on business credit that’s hard to get, or increasing their cashflow problems.
One of the most paper-intensive processes in any business is purchase-to-pay, in which skilled staff must devote time to relatively menial tasks such as tracking down lost documentation, matching purchase orders to invoices and more. Automated invoice processing solutions do deliver well-documented benefits including ongoing savings of 30% or more per invoice, as well as giving closer control over finances, reducing the cycle time for invoices, cutting days sales outstanding, and streamlining business relationships.
But traditionally, invoice automation project implementations can typically take anything from three months upwards, with full return on investment taking up to a year or more. Previously, this has meant that only organisations above a certain size and scale would benefit from AP automation. But even so, many businesses now simply cannot afford to wait that long for a solution to start proving itself.
Blowing paper away
This is where cloud-based automation applications come in. These are available to help companies move to paperless invoice management and crucially, demand no upfront investment in hardware or software needed. Cloud-based solutions drastically lower the cost of entry and barriers to adopting business-enhancing processes such as e-invoicing, enabling companies of any size to adopt a pay-as-you-go model for invoice handling.
Cloud AP solutions can offer multiple options for preparing your invoices for electronic processing and approval, such as scanning and uploading documents yourself, or using a service bureau to receive, sort and scan the invoices. This flexibility in how you start the invoice automation cycle is key to easy deployment, in a way that suits your business needs.
Similarly, the cloud solution should offer options to suit your specific requirements and invoice volumes, from standard file formats to advanced line-level matching. For example, smaller companies with relatively low invoice volumes, or those in the process of changing financial systems, may only want a basic service that integrates with other systems and exchanges files in standardised formats.
Companies with more advanced requirements – such as integration with specific business or finance systems, or extending beyond invoice processing into purchase-to-pay management – should look for cloud solutions that can deliver richer functionality, such as specific modules for order processing, line-level matching and more.
Perhaps the most important aspect of the cloud solution is that it should give users secure, browser-based access to their invoice workflows from any device, without needing specific client software on their PC, laptop, tablet or smartphone. This enables users to check on the status of invoices, and approve or query them, when it suits the individual and from the computing device that they prefer (or have access to at the time), which in turn helps to avoid invoices getting delayed and cuts the risk of friction with suppliers.
So, as they have no cost of entry, and offer a per-usage utility pricing model, cloud-based invoice automation solutions can help any size of organisation to quickly realise real efficiency gains and cost savings, by helping to eliminate paper-based processes and giving better control over finance processes. That’s a paper cut that could truly help to relieve some business pain.