People have dreamed of a paperless workplace for decades. In the 1960s, for example, futurists predicted that organizations in the new millennium would exchange information in a fully electronic manner. This sounds quaint from our current vantage point, but who knew that getting rid of paper would be more difficult than putting men on the moon? The unfortunate reality is that organizations are still mired in expensive and error-prone paper-based processes.
The results of PayStream's 2004 Financial Automation Survey (FAS) of financial professionals illustrate that organizations continue to experience problems at all stages of the invoice receipt-to-pay cycle. For example, the process of receiving and preparing invoices for processing — invoice receipt, matching and imaging/data capture — causes significant pain to roughly one-quarter of the respondents. Pain increases as a transaction unfolds, building with approval processing and peaking at discrepancy resolution and exception processing.
Making the Case for Web Invoicing & Electronic Payments
A paradigm shift is clearly underway as organizations strive to not only contain costs but also compress working capital requirements and process cycle times. This emphasis on cost containment and productivity enhancement during the past few years has inspired organizations to seek out new ways to automate traditionally paper-based, labor-intensive processes. The need to document and secure these processes to ensure compliance with the Sarbanes-Oxley Act of 2002 has provided further impetus for automation, especially where senior management has been involved.
Figure 1: Relevance of Goals
PayStream's latest research indicates that businesses are turning to Web Invoicing & Electronic Payments solutions that streamline the invoice receipt-to-pay cycle to meet these new requirements for efficiency and control. PayStream's FAS 2004 revealed that companies are increasingly seeking automation to streamline and automate some or all of these functions. Asked about the relevance of a range of technology tools and potential initiatives to their payables automation strategy, 40 percent of respondents said that workflow tools to automate approval processing are critical. Solutions for Web-based invoice receipt ranked close behind with 32.1 percent of respondents having them on their automation calendar for the next year.
Although the adoption of automation remains skewed toward large corporations, some midsize and smaller companies are making great strides toward less paper, even paperless environments. The case of one such company — Memorial Sloan-Kettering Cancer Center (MSKCC) in New York — is fairly typical. Driven by a desire to lower the costs of its current invoicing and payment processes, MSKCC established a system to communicate with suppliers via a third-party system developed by Xign. MSKCC and other early adopters have learned that in many cases automation diminishes the procure-to-pay cycle time from weeks, even months, to just days. They have discovered that by automating each stage of the procure-to-pay cycle, from electronic procurement, programmed exception handling and matching, along with enhanced dispute management and approval workflow, they can not only achieve productivity gains and cost reductions, but also obtain a de facto Sarbanes-Oxley audit trail.
What Is Web Invoicing & Electronic Payments?
Web Invoicing & Electronic Payments solutions streamline the invoice receipt-to-pay cycle by enabling organizations to electronically submit invoices and purchase orders, use sophisticated workflow tools for approval processing and make electronic settlement against approved invoices. The following are the specific components of the Web Invoicing & Electronic Payments universe: