In Part 1 of this series, we imagined a world where buyers and sellers do business electronically, without paper invoices, counted all of the pain points that manual invoice processing causes, and wondered why U.S. companies have been slow to adopt electronic invoicing?
The slow adoption of electronic invoicing doesn’t mean that AP departments aren’t looking for ways to rid their operations of inefficient and ineffective paper-based processes. In fact, 52 percent of AP departments surveyed for IOFM’s 2018 Future of Accounts Payable Survey plan to eliminate most of the paper invoices they receive from suppliers within the next three years.
It is no surprise that the biggest benefits of electronic invoicing identified by accounts payable departments are:
- Improved staff productivity
- Reduced costs
- Accelerated cycle times
- Increased reporting and visibility
- Streamlined compliance
Why the reluctance to adopt electronic invoicing?
There are several reasons that U.S. businesses have been slow to adopt electronic invoicing:
- Lack of awareness of electronic invoicing options.
- The unfounded but still widespread opinion that a stamped and signed paper document is more reliable than the electronic one.
- The misconception that there must be a huge investment to automate, even if facts clearly show that cloud-based solutions reduce overall processing costs, save time, and open the door to working capital improvements that contribute to the bottom line. In other words, an almost immediate ROI.
- Apprehension, based on historical occurrences, that it will be necessary to abandon current processes and systems for managing invoices and financial information.
- The misperception that electronic invoicing is somehow difficult to manage, especially when it comes to receiving invoices in different formats (i.e., paper, e-mail, PDF, electronic data interchange) or integrating with legacy finance systems.
The network effect can also come into play to help move the adoption of electronic invoicing along: That is, the more suppliers that invoice their customers electronically, the more visible the benefits of the technology will become, in turn, making it more likely that other suppliers will adopt the technology.
Senior executives—who are increasingly looking for ways to wring costs out of their operations while enhancing cash and spend management—could also drive electronic invoicing’s growth.
The question now becomes:
How can accounts payable leaders optimize their operations while they wait for electronic invoicing to achieve broader adoption in the United States?
We’ll explore the answer in Part 3 of this series.
*This blog series is based on the Yooz whitepaper Why Finance Leaders Shouldn’t Wait for Electronic Invoicing, available for download.