How scanning can help to reduce effort in the corporate AP cycle
Recently Professional Advantage ran a survey of the iPOS procurement users. Two factors make it very interesting. Firstly, it was of the international user base representing 25,000 users worldwide and, secondly, it was anonymous. The survey posed the question “If your organisation had an objective to decrease the accounts payable (AP) effort by x days per month, what would you target to achieve this objective?”
The highest ranking result was to “analyse the nature of your spend and look for actions to reduce effort.” At 83% this result makes a lot of sense. It would seem obvious that an organisation would want to avoid making a decision without the facts, as this may be is the wrong decision.
The second highest ranking response at 70% was to introduce invoice scanning in the AP process. I have argued previously that scanning per se would not solve your problem, and that there are more obvious approaches that would reduce effort and reduce errors. But that view, maybe, is not always fine and dandy if the organisation’s culture requires a broader response.
I have participated in the internal review of a report being prepared for a client of ours. The reports’ author needed to reduce paperwork plus ensure that moving from paper to scanned invoices did in fact reduce workloads. This is where the first response, with 83% of respondents seeking to analyse spend, to understand what was going on, makes so much sense. The analysis of the organisation’s spend did in fact highlight some great insights.
What the report’s author found out was that approximately 40% of the organisation’s paper invoices arose from 21 suppliers, representing 1% of 2,800 suppliers. Of those 21 suppliers, the majority would be able to provide the invoice in electronic form. Also, punch out was not an option for the majority of suppliers. At the other extreme, the analysis also found that 50% of suppliers had five or less invoices in the past 12 months.
Simply having invoices sent electronically from these last 21 suppliers gives the client a great outcome. If 40% of the invoices can be provided electronically then they will arrive at the organisation ready for coding at a zero cost to the business. If they are not provided electronically the ‘paper’ invoice will incur a scanning cost of X cents per sheet.
Now the hard work starts moving from the existing processes to deploying the new ideas. Like other ideas, this opportunity to excel is dressed in overalls and will require hard work.
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