Don’t answer that – it is a standard “no win” question. But unfortunately, it is also increasingly applicable to any finance department that is still processing paper invoices.
The emotional challenge for finance people is that the paper invoice represents the critical source document for everything that is bought or sold and their entire career experience has been founded on the paper invoice being sacrosanct. So, it is not surprising that senior finance executives faced with the proposal of removing all the paper invoices use the term “a step too far”.
So, what is the problem?
The common reasons for the “step too far” comment are predictable, simply because they are repeated on such a regular basis.
- “I look at every invoice before it is approved for payment and it enables me to understand exactly what is going on.”
- “It is such a major change, I don’t think the staff is ready for it.”
- “The current process works, so why change it as we have always worked that way.”
- “It is an additional cost because we could not save any staff.”
- “I am uncomfortable with the idea that invoice would arrive outside our environment, so what would happen if they didn’t arrive – how would we know?”
Then there are the unspoken concerns:
- “This will remove 75% of the work for our current accounts payable resource.”
- “This will reduce the level of authority and control that finance current has, simply because every budget holder can see exactly what is going on, all the time without having to ask.”
- “The decision to delay supplier payments for cash flow reasons would become more transparent.”
- “The financial information of the business is private to finance and the owners, it should never be shared.”
Let’s make two assumptions:
- The ability to capture and digitise inbound invoice is a fully proven process with a complete audit trail of every activity from receipt to full approval and posting for payment, where nothing is ever lost and the exact status of every transaction is known.
- You undertake the due diligence that confirms that the accuracy, audibility and control are fully proven and works every time.
The counter arguments for automation now becomes utterly compelling because the reasons for the “step too far” position become indefensible.
- Every invoice is individually captured and managed. They can never be “lost” and the exact status of each invoice is always known by everyone who needs to know.
- Every invoice always follows the correct approval process and can be tracked through the process with the full audit trial.
- Exceptions that need review/credits notes are always known, with an individual being responsible for the next actions.
- The approval process is MUCH faster, undertaken from any connected device 24 x7.
- Month-end accruals are always accurate and the information available on demand.
- Budget holders can now see the following information, which enables them to make use of the available funds:
- Supplier turnover.
- Every invoice within the approval process and its exact status, including under query.
- Every invoice that has been processed, including all the line level information within it.
- Real-time budget availability information based on every invoice received.
- Whether the invoice has been paid.
- Finance and budget holders are on the same digital page for the status of everything.
- The time savings for both the budget holder and approvers and finance are very significant.
The productivity and commercial benefits of invoice automation are overwhelming and failing to adopt this methodology is holding back the business.
So, ask yourself a question:
“How will you be able to explain to the rest of the board that they are missing out on total supplier and budget visibility because of the decision to stick to paper invoices?”
Given the implications of being confronted by the board, isn’t it time to at least do the due diligence on e-invoicing approval processes?
You can then either defend your position to keep paper invoices or delight them with your proposal to make the change and move your business out of the 19th century and into the 21st. The choice is yours.