This article was originally published in the Summer 2019 issue of The Record. Subscribe for FREE here to get the next issue delivered directly to your inbox.
Timely payments are a valuable relationship builder for businesses of all sizes. And payments are getting faster thanks to new payments architectures like Faster Payments, the New Payments Platform in Australia, regulations like the European Union’s Late Payments Directive and other prompt payment and ‘pay-on-time’ initiatives. But despite their commitment and real-time payment capabilities, huge numbers of businesses are still paying their suppliers late. So what’s going wrong?
Across the world, companies of all sizes face the same situation. “It is reported that Australian corporates pay their invoices 26.4 days past due, on average,” says Andrew Scarborough, commercial product at Bottomline Technologies. “In the UK, 90% of the financial decision-makers who took part in Bottomline’s 2019 Business Payments Barometer expect to be using real-time payments by 2020, and more than half already are. But 92% admitted they still pay their suppliers late.”
With 40% of those decision makers (51% in medium-sized businesses) saying that inefficient Accounts Payable (AP) processes are limiting their ability to pay on time, it’s clear that some of the obstacles to prompt payment lie earlier in the invoice-to-pay cycle. “Real-time payments might knock two days off the time taken for a standard UK BACS payment for example, but payments are only part of the story,” says Scarborough. “Unless you are paying by an automated method like direct debit or a standing order, there will always be an invoice involved – and the processing of that invoice is often where the real hindrances lie.
“Capturing invoice data and getting it into your system can be hugely labour-intensive and error-prone, with people logging into mailboxes to retrieve attachments and re-keying the data into the ERP. That data needs to be checked, validated and matched to the corresponding purchase orders (PO) and receipts, and any exceptions identified. Most concerning is that in some cases this is still a manual process. Obtaining payment approvals can also introduce significant delays and dealing with disputes is a huge drain on resources. Many AP teams spend up to 40% of their time dealing with calls from suppliers asking when they will be paid or raising other issues.”
From invoice through to payment, technology drives greater efficiency and speed, but until recently, these solutions were the province of large organisations with the time and resources for complex software installations. The cloud has changed all that. “Now, enterprise-level end-to-end AP solutions can be accessed by businesses of all sizes in the cloud and paid for on a subscription model,” says Scarborough. “Large numbers of Tier 2 and Tier 3 companies moving to Microsoft Dynamics 365, for example, are now looking for value-add end-to-end AP extensions based on the same technology.
“Businesses these days are also looking for a solution that gives an embedded experience and is deeply integrated with their ERP. Many providers claim their technology is integrated, but there are different levels of integration that determine the seamlessness of the user experience.”
This is where Bottomline’s Invoice Automation (IA) 365 solution can help. It is specific to the Dynamics 365 environment and meets all Microsoft’s integration criteria. “IA 365 takes integration with Microsoft Dynamics 365 to a new level, providing an immersive experience,” says Scarborough. “Rather than building everything outside of Dynamics and then integrating it, we’ve created an application that can be configured, managed and operated within Dynamics. Users can access everything with their Dynamics credentials and experience it as if it is part of Dynamics 365. This allows licensed ERP users to work within their familiar Dynamics 365 screens and helps maintain a low ownership cost.”
Touchless processing – where everything is automated from receipt of the invoice to payment – is achievable thanks to Bottomline’s combination of expertise and the latest technologies. “When an email is sent to you, we can capture the invoice data, match to the PO and have it auto-approved, posted and ready for payment in seconds,” says Scarborough. “We’re also looking at different ways to read and categorise the invoice using machine learning. For example, we have a digital mailroom, where email addresses can be assigned to each vendor and used to identify the sender of the invoice. Rather than trying to read the company name from the invoice with OCR, we’re using the email address to classify and categorise the invoice and identify who it’s from.”
As well as creating an engaging Dynamics 365 experience, Bottomline has ensured that IA 365, like its accounts payable and document automation solutions, meets the strict criteria for availability on Microsoft’s AppSource. “To be included on AppSource, a solution has to be an easily configurable turnkey solution, with single sign-on for any apps outside Dynamics 365,” says Scarborough. “IA 365 is very simple and easy to configure so users can be up and running within days. It uses Microsoft cloud services such as Power BI to deliver customisable reports and dashboards. Microsoft also ensures that developers provide frequent reports so any changes can be reviewed and accredited – which means that any upgrades will also be a smooth process for customers.”
Bottomline’s governance and fraud-prevention capabilities also align to the Invoice-to-pay process. Businesses are now acutely aware that payment or invoice fraud is as likely to be instigated internally as it is from an outsider. “Internal users often have the edge, they understand the whole end-to-end AP process and how to circumvent the controls,” says Scarborough. “Not only should an AP solution have all of the traditional techniques for preventing fraud such as segregation of duty and embedded approval processes, it is also essential that every user action is recorded so that suspicious behaviour can be quickly identified. At Bottomline we are now taking traditional auditing a step further, using sophisticated techniques we’ve acquired in the banking space to help identify and block fraud before it happens.”
Ultimately, Scarborough says, Bottomline’s expertise in managing the whole invoice-to-pay lifecycle brings far-reaching benefits. “Our clients can optimise invoice automation and payments submission, taking advantage of some of the newest and fastest payment schemes and platforms” he says. “This means we’re ideally positioned to help with things like payment performance reporting, because we know the date the invoice was captured and the date it was paid.
“We understand the whole cycle, including how rapid and effective processing of invoices significantly contributes to a better understanding of payment obligations, the ability to mobilise cash more efficiently and make payments. We’ve automated the invoice-to-pay process successfully in many enterprises throughout the world, from Australia to the UK, and invoice automation is also integrated with the Paymode-X payment networks solution in the US. Fundamentally our focus is on delighting customers by helping businesses pay and get paid in a simple, smart, secure way.”
Share this story