Thursday 21st February, 2013
A new survey by OB10 and sharedserviceslink.com, has uncovered the full impact invoice exceptions has on global businesses. Often seen as an inevitable by-product of the AP process, a through examination of the reasons why exceptions happen and what can be done to move towards straight-through processing for all invoices is all too frequently a path less followed. And yet in this international survey of more than 200 professionals, 85% agree that eliminating exceptions would be one of the most effective ways to cut costs for Accounts Payable.
In the vast majority of cases the root cause falls back to out of date, convoluted or bad practice procedures, with the survey finding that invoices which couldn't be matched to a purchase order (and so needing manual resolution before payment approval) were the root cause of many inefficiencies and payment delays in the procure-to-pay process. In fact, almost a third of PO-backed invoices were found to require expensive manual rework before payment could be approved.
The end result of managing exceptions is usually a combination of late payments, increased operating costs and unhappy suppliers. For example, in companies processing around 350,000 invoices annually, exceptions were seen to cause 32% of late payments, 36% of supplier phone calls, and the equivalent of 79 FTEs in man hours a year to resolve them.
As the survey points out, the most surprising thing about invoice exeptions is not that they happen, but rather that given their effect on business, only 43% of participants have formal tracking methods and if it's not measured, how can it be managed..?
To download the free ebook; Rooting Out Invoice Exceptions: The Path to Straight-Through Processing click here
Also, take a look at some of these hard hiting figures in the infographic below: