Why ICreative

Benefits of purchase to pay automation

• Reduce operational costs

  By automating procurement (for indirect spend) and invoice processing (for both direct and indirect spend), the operational costs of these processes can be reduced.

  Automation of the p2p process often starts with the accounts payable administration. The process of manually receiving invoices, coding, validating, having them approved by budget holders and making payment can be replaced by an automatic process.

  In this process, invoices are automatically sent to budget holders, who can approve (or reject) the invoices behind a laptop or with their mobile phone, after which the invoice is made available for payment. When purchasing is also standardized and data-driven, approval can even be performed automatically. After all, the invoice does not need to be manually approved if it corresponds to an order or contract that has been approved.

• Improve agreements with suppliers

  Negotiate lower purchase prices

  When insight, and therefore control, is obtained on order and invoice flows, it is possible to critically examine how these flows relate to suppliers. This will be clear for direct spend, but for the long-tail to suppliers where items for the maintenance of business premises, office equipment and marketing material are purchased, the challenge is greater. When orders and invoices are managed systematically, it becomes possible. The supplier base can be rationalized and price and delivery agreements can be made with preferred suppliers.

  Take advantage of early payment discount

  By automating invoice receipt and invoice processing, the lead time is shortened and a supplier can be paid faster. That, of course, calls for a reward. A large proportion of companies in the Netherlands suffer from invoices that are paid late. To encourage customers to pay earlier, many suppliers offer discounts on early payment of invoices. A payment discount of 1 percent is not uncommon; 2 percent is also a regular occurrence. This may not seem like much, but the savings can add up. Research by Forrester shows that companies with an annual spend of 300 million euros over a period of three years miss an average of 400,000 euros in payment discounts. That makes a business case for purchase to pay automation a lot stronger.

• Prevent invoice fraud

  A PDF or XML invoice goes through various e-mail servers of which only about 50% is encrypted. On any other server, criminals can intercept invoices, adjust them with their own bank account numbers, and forward them. Via address spoofing it is even possible to send an e-mail on behalf of someone else. Criminals can also throw a phantom invoice into the market, the value of which is only a few hundred euros, so that little manual control takes place at the recipients and is often paid automatically. Companies and institutions can prevent this with automated control mechanisms on XML invoices (or paper or PDF invoices that have been converted to XML). The content of an XML invoice is then compared with the supplier data as known to the customer. If the combination of name, VAT number and IBAN on the invoice does not match the data in the system, an invoice sent by criminals with a modified IBAN is automatically canceled.

• Strengthen CSR position

  By paying suppliers on time and thwarting fraudsters, you are already showing good behavior. And it is obvious that data-driven working counteracts the use of paper. But data-driven working also provides transparency and traceability of activities.