On average, enterprises spend nearly half of every dollar they earn on external goods and services. AberdeenGroup's new report, 'The Invoice Reconciliation and Payment Benchmark Report,' found that 69 percent of enterprises have limited-to-no visibility into critical financial information relating to the costs for these external goods and services. Three pressures cited by survey respondents are linked directly to visibility:
- Reduction of cycle times to post expenses
- More timely recognition of costs
- Impact of rising supplier costs.
"One of the challenges in gaining visibility into costs is the large volume of paper-based transactions and variety in the types of billing processed," says Joe Basili, an Aberdeen research director and lead author of the report. "The data from processing bills should be integrated with sourcing, procurement, and ERP systems to provide visibility into costs and maintain competitive position."
The report examines the implications of labor-intensive manual processes. Basili offers specific recommendations for improving management of IR&P processes, which include the following:
- Determine which manual steps cause the biggest delays and cost the most money.
- Automate labor-intensive invoice processing by adopting Optical Character Recognition (OCR) scanning and increasing the use of HTML and electronic transactions.
- Identify top obstacles to capturing cash discounts and an alert system of escalations.
- Review your IR&P technology and compare the costs of integrating multiple systems with evaluations of newer integrated approaches.
- Create benchmarks to measure improvements for the costs of processing bills, time to process an invoice, audit findings, and volume of transactions.
Work toward a fully visible, integrated environment for sourcing, ordering, invoice processing, ERP systems, and payment processes. The goal is to find an approach that will enable the enterprise to collect critical information, organize the data, integrate it with the ERP program, spend analysis, and business intelligence.
To download a complimentary copy of the report, click on http://www.aberdeen.com/link/source.asp?cid=3185&pid=PRIR071006.
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