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News Room > Blog > Getting the most out of your S2P software solution – improvement opportunities – part 2

Getting the most out of your S2P software solution – improvement opportunities – part 2

Andrada Sabo

In part one of this blog series we talked about the importance of continually monitoring the performance of your procurement software solution and we provided some insights into how you can do this, whilst at the same time obtaining in-depth information about your system and the areas that may require future attention.

We also talked about the opportunities for improvement, post implementation, that companies usually identify during their system analysis. Out of these areas, in today’s blog, we plan to focus on:

 

Low levels of receiving electronic invoices

In recent years e-invoicing has gained more and more popularity and companies are much more inclined to adopt e-invoicing and have become less skeptical about the benefits. Now, more than ever, we have the technology that allows for the adoption process to go faster and smoother. Furthermore, companies that have implemented a procurement software solution already have the option to adopt e-invoicing built into their system.

So, what seems to be the hold up? Basically, it all comes down to the human nature of being resistant to change. Let me explain.

Many companies have already implemented e-invoicing, whether that is via implementing a S2P software solution that comes with e-invoicing capabilities or that they are complying to certain rules and regulations regarding sending e-invoices. The problem, however, is the low volume of receiving electronic invoices.

Plans to help increase this volume have been developed even at a regional level, with the EU planning on making electronic invoicing the main method of invoicing by 2030. To achieve this, it has launched several initiatives to increase adoption, one of those was the introduction of a European Standard for e-invoicing to eliminate the many e-invoice formats used across the EU.

After running many procurement system optimisation reports, we identified 3 frequent reasons for low levels of receiving e-invoices:

  • Lack of standardization: e-invoices come in different formats and are produced according to different standards, as systems are developed by many different companies. This can sometime affect the transfer of an electronic invoice from one company to the other, and it could alter some of the information it contains.
  • Security: many organisations are concerned about the security an e-invoicing system offers.
  • Accuracy: there are many concerns regarding data accuracy when it comes to e-invoicing. Data used to populate electronic invoices is often pulled from different departments inside the organisation, using different systems. To this you need to add supplier data which can sometimes be incomplete or even inaccurate. So, a big concern remains data accuracy, whether we’re referring to supplier data or internal data.

Can organisations do something to increase the use of electronic invoicing and ensure it is a safe method? Of course, and besides increasing the volume of their electronic invoices these methods can optimise their entire purchasing process.

 

Solutions for low levels of receiving electronic invoices

  • Review AP processes

Accounts Payable are responsible for the processing of invoices, from receiving the invoices through to the actual payment. Thus, an organisation needs to work towards educating its AP staff regarding the benefits of e-invoicing. E-Invoicing doesn’t mean scanning PDFs and sending them as email attachments.

It means using a central cloud-based platform which both suppliers and the organisation use to manage everything. It means reducing manual, repetitive, prone to error work and having more efficient processes in place. It means reducing operating costs and freeing up your AP team’s time, for them to focus on more strategic tasks; and last but not least, e-invoicing means reducing risk and increasing visibility and accuracy over the whole process.

More often than not, AP teams are not aware of the benefits of e-invoicing, and organisations implement e-invoicing systems but do not focus on changing processes.

However, being aware of the issues is a step towards change, and more forward thinking organisations focus on the strategic role of the Accounts Payable teams, that goes beyond just back-office payment processing.

  • Supplier Tiering

When adopting an e-invoicing solution, organisation’s need to be aware that not all of their supplier base is going to be willing to adopt e-invoicing. Having this in mind, it’s important to do a supplier base segmentation to get a better view of the suppliers that you will be focusing on. In doing this organisation’s should have a look at their annual invoice volume and spend data and focus on their strategic suppliers.

Note that in order to ensure a smooth transition, supplier tiering should happen before actually implementing an e-invoicing software.

  • Supplier Enablement

To reiterate, organisation’s should engage their suppliers from the beginning, not after the implementation. This is a very important step, one that can strongly influence the success of e-invoicing.

By involving suppliers early on in the process, organisation’s have a better chance of gaining their support and getting them on board with the decision. Also, this provides insight into what might keep them engaged.

To help with the supplier enablement process, organisation’s should also think about offering their suppliers incentives to support the transition. There are a few other things that can be done to ease the supplier enablement process. For a better understanding have a look at our 4 Things About Supplier Enablement You Need To Know blog.

 

Needless to say, a S2P software solution can very well function without running an in-depth analysis of its performance. However, why settle for a procurement system that is good enough when, with little effort and a system optimisation tool, you can have a great system. A system that delivers on your business case and is providing real value while allowing you to easily identify areas of opportunity for improvements to be made.

If you want to learn more about running an in-depth analysis (from the how to, down to the improvement opportunities) leave us a message here and one of our procurement consultants will get back to you.

 

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