It goes without saying … every company today is looking for ways to cut costs quickly.

Companies that still handle and process paper invoices are ripe for cost reduction.

Some companies believe that somehow scanning invoices will reduce manpower requirements in AP. Many have been disappointed with this approach.

That leaves automating the AP process with the right combination of eInvoicing, Invoice Portals, Workflows, and imaging … depending on Suppliers’ preferences.

These preferences can be heavily influenced by how fast Suppliers get paid and how much effort is required by you to process their invoices. Invoices sent and received electronically can, of course, be paid quickly and efficiently. Paper invoices, not so much.

The alternative is outsourcing.

There really are only two viable alternatives: outsource or automate. It’s up to you.

One of the biggest challenges facing companies implementing P2P systems is increasing the number of people who actually use the system. This, in turn, leads to maximizing spend under management, contract compliance, etc.

There’s no question that some end-users are easier to convince than others. Certainly the Power-Users are relatively easy to get on-board. This would include Purchasing and Accounts Payable. If they “don’t get it,” you’re in real trouble.

The challenges typically lie with, (a) infrequent users, (b) departments such as Marketing, IT, etc., and (c) Approvers of Requisitions and PO’s.

One of the principles of successfully implementing any enterprise system is to “seek and gain Top Management commitment” for the project. With true Top Management commitment, it’s easier to get everyone to fall in line and use the new system.

Unfortunately, getting Top Management commitment rarely happens — most people are lucky to get approval to buy and implement a P2P system.

In 25 years, I would say I’ve seen this happen no more than 10 times. It’s a beautiful thing when it happens – but, what if it doesn’t?

First, this means you will need to avoid the “Big Bang” approach to implementation. You’ll need more time to fully implement the system because you will need a phased approach, where you bring on one group of users at a time. You simply won’t have the clout to influence everyone’s behavior simultaneously.

There are two basic approaches you can utilize to get users on the system and have them use it religiously; the first approach being “The Carrot,” the second, “The Stick.” Perhaps you can use techniques from both categories.

In my next blog, we will examine “The Carrot” approach in detail.

This will help you figure out how to communicate with your end-user community and to answer the question, “what’s in it for me?”

In Part I, I discussed the benefits of improving your PO process first – this allows automatic invoice matching and can dramatically reduce the overhead associated with invoice approval and payment.

Some companies are concerned about their suppliers’ willingness to participate in this process. The fact is, not all suppliers need to send invoices electronically to make this work.

Invoices can still be entered through the “Employee View” of the P2P application. So, if the supplier won’t (or can’t) participate, invoice data can be scanned / entered by the Buyer’s AP department. The matching process can then be automated.

Of course it is preferable to have the suppliers enter the invoice data and send it electronically. Supplier discount incentives can be established to encourage this behavior.

In Part III, I will discuss the Non-PO Invoice Automation process.