Match game ’11: Tapping the electronic manual

February 18, 2011  |  Electronic Invoicing

 Match game 11: Tapping the electronic manualElectronic invoicing and accounts payable automation effectively may close the loop between supply chain operations and AP, but it also may encourage revving up the fog machine.

Forward-minded supply chain managers already are relying on electronic invoicing and AP automation to identify and help resolve matching errors, manage exceptions and eliminate manual data entry for the financial and operational benefit of their organizations. Or at least they’re making plans for it.

Status quo-minded materials managers may shun it for fear that their inefficiencies will be exposed, effectively placing their jobs in some jeopardy.

With more emphasis on information technology to solve burgeoning budgetary challenges, however, blowing smoke reverts to its original – not sardonic – connotation.

When invoices don’t match purchase orders, exceptions increase in number and way too many fingers are tapping on keyboards, the C-suite eventually will notice. And the burgeoning number of supply chain management departments adopting more accounts payable functions is accelerating the push to automate the payment process along with purchase orders and invoices.

To develop some supply chain context around electronic invoicing and AP automation, Healthcare Purchasing News checked in to learn how far supply chain management departments have progressed.

Navigating the field

For James Tucker, global director, product marketing, Ariba Collaborative Finance Management Solutions, Ariba Inc., Sunnyvale, CA, it’s all about dollars and sense.

Tucker cited a recent PayStream Advisors study where 50 percent of respondents attributed their lack of electronic invoicing to budgetary issues, followed by a lack of understanding of the true cost savings and ROI from electronic invoicing, which extends beyond eliminating paper.

“In addition to achieving cost savings of 60 percent or more from processing, organizations can save $2 million from early-payment discounts and $9 million from compliance for every $1 billion in spend, along with substantial additional savings from terms-extension strategies that extend [days payable outstanding],” he noted. “As more organizations factor these additional cost savings into their business cases, adoption will accelerate. At the same time, 40 percent of companies stated that implementing or increasing electronic invoicing was the top priority on their 2010 automation plans.”

Global-oriented providers and suppliers may find limitations with some technology vendors due to a lack of understanding of country-specific rules and regulations, particularly involving taxes, according to Tucker. As a result, providers and suppliers should work with a technology company that can help with compliance, offer application of digital signatures if required to authenticate transactions and provide e-archiving capabilities for auditing, he added.

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Source: Healthcare Purchasing Online

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