by Pam Miller
In our efforts to streamline accounts payable, the idea of e-invoicing is an attractive one. What could be more efficient than receiving our invoices electronically in such a way that the invoice data is automatically entered into our financial system? Paper handling would disappear, as would data entry. It sounds almost too good to be true. Unfortunately, for many accounts payable departments, e-invoicing is too good to be true, because AP's ability to obtain funds to implement an e-invoicing project is very limited. Even if some funds were available, how does the average AP department choose from among all the vendors offering e-invoicing “solutions”? Which solution is the right one? Which solution is going to be there for the long haul? And what about the challenge of convincing suppliers to participate? The difficulty that AP departments have had addressing these concerns are openly discussed at just about any gathering of AP pros.
Lower-Tech Methods Offer Some of the Same Advantages
Implementing an e-invoicing solution is not the only way to streamline the AP process and gain both productivity and accuracy. Other methods offer some of the same advantages as e-invoicing–methods that some may deride as “faux e-invoicing.” Yet just because they don’t qualify as the latest and greatest technology–or are not viewed as a “solution”–doesn’t mean that AP departments can’t benefit from putting them in place.
Is an E-mailed PDF an E-Invoice?
E-mailing PDF invoices may not qualify as "e-invoicing," but the PDF invoice shares many of the same positive attributes of a proper e-invoice. And the technology is readily available. Many suppliers have the ability to send invoices as PDF attachments to e-mails. Accepting invoices in this manner eliminates a great deal of paper handling, such as opening envelopes, extracting the invoices, and flattening them out. While you may still have to open the e-mail and print the invoice, this process is both easier and faster than handling “snail mail” invoices. And, as a bonus, invoices are less likely to be lost in transit when they arrive via e-mail, as opposed to traveling through the USPS. Of course, receiving invoices as PDF files doesn’t eliminate the need to enter the data into the financial system. But there is software available that can extract data from a PDF and put it in other formats, including spreadsheet formats such as Excel. And many financial systems can import files, especially spreadsheets, that are formatted to their specifications. Adding one of these relatively inexpensive products to the AP toolbox increases the appeal of receiving invoices as a PDF.
Is an E-mailed Spreadsheet an E-Invoice?
An e-mailed spreadsheet is not an e-invoice, but the fact that many suppliers are able to generate their invoices as a spreadsheet–or convert them to a spreadsheet format prior to sending them to you as an attachment to an e-mail–is a capability that AP can take advantage of. Uploading this spreadsheet into your financial system eliminates paper handling as well as data entry. Might it require a bit of “massaging” in order to change the spreadsheet into the format your system requires? Perhaps, but the amount of time spent on this process is meager compared to a totally manual process. Some of your suppliers may even be able to generate the spreadsheet invoice in the proper format if you provide it to them.
Is a Text File an E-Invoice?
A text file is certainly not an e-invoice, but like a spreadsheet, this format may offer AP the opportunity to simply upload the invoices into the system as they are received. Many systems are capable of generating files including invoices in these simple formats, including those that many of your suppliers are using.
Simpler Formats Are Not Perfect, But They're Still a Step Forward
Many systems already in use in AP come with workflow, which can automate the three-way match or the invoice approval process. These ideas only address the beginning and middle of the AP process–they don’t truly automate AP. But just because they don’t achieve the goal of AP automation does not mean that they can’t improve AP’s performance. Eliminating manual processes, wherever and whenever possible, saves time and eliminates errors. Waiting until a “real” e-invoicing solution is implemented means foregoing savings until that time arrives. And that seems like a loss that AP shouldn’t want to endure.
Do What You Can Do Now
While they are neither fancy nor “hi-tech,” the solutions described above are inexpensive, widely available, and within the capability of many AP departments to implement right now. And these solutions can greatly decrease the manual processing that slows AP down and introduces so many opportunities for error. As such, they deserve some attention, as well as a judgment as to whether one or more of them can work for your AP department.