One of the major barriers hindering electronic invoicing initiatives is gaining supplier adoption. Persuading suppliers to change their processes to align with buyer’s needs is a costly and time-consuming process, and success depends largely on the buyers’ ability to present a compelling value proposition to suppliers.
One option that organizations are pursuing to overcome this challenge is utilizing outsourcing services in conjunction with electronic invoicing initiatives. Under this scenario, suppliers that are reluctant to join an e-invoicing network, continue to send paper invoices. But instead of mailing them to the buyer’s AP department, suppliers send these invoices to a processing center managed by the e-invoice solution provider. At these processing centers, the documents are scanned and data is extracted from the paper invoices and converted into an electronic format. Data from both the paper and electronic invoices is then available for processing through a single unified platform.
Electronic invoicing solutions were explicitly designed to facilitate external buyer-supplier interactions, while front-end imaging applications evolved to meet organizations’ internal needs around invoice receipt and management. However, over the last few years, we have seen a convergence in invoice management landscape with both types of providers partnering or developing functionality to offer comprehensive solutions covering paper and electronic invoices and incorporating better options for invoice receipt, approval processing, and discrepancy resolution.
Benefits of Outsourcing Imaging and Data Capture
Buyer Side Benefits:
- Organizations receive all their invoices in an electronic format, from day one, without having to wait to onboard a critical mass of suppliers on the e-invoicing network.
- The AP department receives all invoices in a common format, irrespective of the channel of entry. The same robust validation rules that are applied to electronic invoices can be used to validate paper invoices as well.
- Buyer organizations can see a reduction in FTE and processing costs that were originally associated with imaging and data entry from paper invoices.
- Most third party outsourcing providers guarantee a 24 hour turnaround for invoice entry, which significantly compresses the invoice receipt-to-pay cycle, thereby allowing organizations to capture more early payment discounts.
- Fewer supplier inquiries into invoice and payment status as suppliers have visibility into the entire process.
Supplier Side Benefits:
- Requires minimal changes to the supplier-side process; Suppliers only have to change the address to which they mail in the paper invoices.
- Suppliers have real-time visibility into invoice status – whether the invoice is being reviewed, is approved or is under dispute. Further, suppliers can speed up the process by submitting comments or supporting documents, if needed.
- Electronic invoicing, combined with outsourced data capture, compresses the approval cycle, ensuring that suppliers are paid on time, or even early in some cases.
