Invoice & Workflow Automation Adoption Report
While paper still dominates as the number one method used to trade business- to-business invoices, there is a light at the end of the automation tunnel – paper is waning as more companies implement front-end invoice automation and automated workflow. In the past year alone, the use of paper to trade invoices has dropped ten percent (59 percent in 2012 from 69 percent in 2011). This trend will likely continue as more companies adopt electronic invoicing and automated approval workflow for invoices, the top two automation goals reported by accounts payable (AP) professionals in the 2012 Invoice Automation Adoption Survey.
Barriers to the adoption of imaging solutions are being broken down as more AP professionals get the internal backing needed from executives. In addition, 2012 survey results show that fewer AP professionals believe that their current paper based manual processes work (10 percent in 2012, down from 13 percent in 2011). Challenges in the invoice management process are becoming fewer as more companies begin to utilize imaging solutions at the front-end as soon as they are received, (up 4 percent to 44 percent in 2012).
In this 2012 Invoice and Workflow Automation Adoption Survey report, the analysts at PayStream Advisors examine electronic invoicing, imaging and data extraction, and automated workflow solutions at US-based enterprises. The analysis in this report is based on over 300 survey results and more than nine years of research findings. PayStream Invoice and Workflow Automation Adoption Survey PayStream Advisors conducted its annual Invoice and Workflow Automation Adoption Survey in the second quarter of 2012 and developed this report to highlight the overall trends that are currently shaping the rapidly evolving AP automation space.
The Invoice and Workflow Automation Adoption Report is designed to:
- Help accounting and financial practitioners familiarize themselves with the electronic invoicing and automated workflow landscape
- Enable them to better understand the extent of adoption of the various forms of AP automation
- Allow companies to benchmark their operations against similar businesses.
Automated approval of workflow for invoices, ranked as the top financial automation goal at 29 percent. This is a logical next step for companies that have implemented front-end electronic invoice systems. Companies are beginning to reap the rewards of implementing an eInvoice solution and are now looking for ways to expand their success through automated approval workflow for invoices.
Increasing electronic invoicing is a top priority for 28 percent of survey respondents, down from 37 percent in 2011. Implantation of invoice imaging, the first step in the automation of a paper process bumped up 3 percent from 2011 to 2012. More survey respondents already have invoice imaging in place and are currently making the most of their imaging solution by increasing automated approval workflow for invoices and eInvoicing. Until recently, AP automation initiatives were largely limited to Fortune 1000 companies, which have the human and capital resources to implement and manage these applications. Today, we are seeing this trend trickle down to small and medium enterprises (SME) – those with annual revenue under $250 million due to two major factors:
1. Small and medium-sized companies are struggling with manual, paper-driven processes and are realizing that automation can alleviate most of the challenges they face in their day-to-day operations.
2. The availability of affordable, easy-to-implement and use technology solutions is driving a renewed interest in AP automation for SMEs.
Adoption Rates Continue to Climb: Twenty-eight percent of executives surveyed said they have already launched an invoice automation initiative and another 47 percent plan to within a year. Also encouraging is the number of survey respondents (25 percent, up from 22 percent in 2011) reporting they have plans to implement their top automation initiative in more than 12 months.
Reliance on Paper for Invoice Receipt Key Insight:
Paper and paper equivalents including email and fax are still the predominant methods for conveying supplier invoices. However, automation is making great strides. Paper invoices dropped below 60 percent of total invoices in our 2012 survey, down from 69 percent just one year ago.
Suppliers not willing to adopt electronic payments, shortage of IT resources and lack of integration between electronic payment and AP systems were the top three barriers. Paper Chase While paper still dominates the AP landscape, more AP practitioners are getting out from underneath the paper piles and are utilizing electronic invoicing. Invoices received via paper have dropped from 69 percent in 2011 to 59 percent in 2012. That’s a significant reduction in just one year. The majority of AP professionals that made the switch from paper have adopted electronic invoicing, portals and EDI. The others are simply saving the 45 cents in postage by making the switch to email or fax. For more information on electronic invoicing, download PayStream’s 2012 eInvoicing Adoption Benchmarking report.
Breakdown of Invoices via Receipt Method Paper invoices decline as eInvoicing, Portals and EDI increase 13% Email, 6% Fax, 22% eInvoice/Portals/EDI, Paper 59%
Barriers to Invoice Automation Electronic invoicing is more efficient than paper. Paper requires manual processing, which leads to a number of problems such as keying errors and lost or missing invoices, just to name a few. Routing paper invoices is time consuming and leads to other problems downstream, including a lack of visibility into outstanding invoices and the lack of ability to capture supplier discounts. If there are so many benefits to electronic invoicing, why is paper still so prevalent?
PayStream analysts asked AP practitioners, who offered the following insights:
Supplier Resistance Suppliers’ unwillingness to submit invoices electronically is the number one barrier to invoice automation. One way to overcome this obstacle is to work with solution providers that provide supplier onboarding. These solution providers will work directly with your suppliers to get them plugged into the eInvoice universe. Business Practices Like the old adage says, “You can lead a horse to water, but you can’t make him drink.” While invoice automation solutions lead to greater efficiency and lower Challenges to Adoption of eInvoicing Supplier resistance is the number one challenge to invoice automation.
AP personnel can be resistant to change. Invoice automation heralds a tremendous change in the way buyers and suppliers conduct business. Internal resistance to change or the belief that current paper based systems work well, even though they are not efficient, is a barrier that solution providers overcome by clearly identifying the tangible benefits of automation and communicating them efficiently. Technical Challenges The good news is that most eInvoice applications available on the market today integrate easily with legacy systems on the buyer and supplier sides, resulting in secure and seamless data transfer, as well as streamlined processes and more efficient workflows. While a shortage of IT resources ranked as the number three barrier to invoice automation, we should see this number continue to decline due to the availability of affordable, easy-to-implement and use technology solutions available today.
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