Agree or disagree with this overarching generalization, the fact is some things in life are not absolute. Take the case of automating your entire invoice volume (a promise rarely kept). This promise is not broken out of misunderstanding, overselling or over-promising. It’s just the reality of our time, when we want and expect a single solution to solve all our problems.
For example, think of the number of apps on your phone. Now think about the number of apps on your phone that have very similar functions. These apps (i.e. banking, credit cards, calendar, email) all solve the same core problem, but each in a different way. For example, your Bank of America app and your Chase App both manage your bank accounts. They have the same functions, but you need both to meet all your banking and credit card needs.
The same is true for invoices. On the surface, an invoice represents a cost for a product or service that you requested (well I hope you requested!). And so, logic follows - an invoice, is an invoice is an invoice! If we can automate one, then we can automate all.
At Nitor, we have deployed nearly all the leading invoice automation solutions and the absolute for us is - there is not a single solution that can automate 100% of your invoices.
So, what then is the solution? Should you invest in several point solutions that will frustrate AP and Suppliers? Not quite. But you need more than one solution if your goal is true B2B e-Commerce Automation.
Just consider the different combinations of invoices based on a few variables:
1 - Expense versus Capital Treatment
2 - Taxable versus Non-Taxable
3 - Line Level Exceptions
4 – Shipping and other special charges
5 - PO based
6 – Non-PO based
7 - Contract Release Based
8 - Line Level Tax
9 - Utilities versus Laptops
10 - Taxes versus Office Supplies
11 – pCard purchases that are expensed
12 – Credits, Returns, Deposits
13 – Non-Latin character based invoices
14 – Pass-through broker invoices
15 - International versus National Tax Rules
The list goes on and on. The point here is simple; invoice automation is not simple when you focus on the many use cases that are presented.
Here is a process to understand the complexity of invoice automation and an approach to architecting the right solution.
Think about the common procurement taxonomy that most use (even if modification is required) - UNSPSC. We leverage this taxonomy (or one like it) to help classify spend up to four levels.
Similarly, we can apply a taxonomy to invoice types, PO-based invoice versus Contract-based invoice is a simple example. Use a taxonomy to establish a solid baseline built on the types of invoices you use.
If your company is like most others, then you have an ERP (or similar) where all payments are recorded/accounted for, approved and then paid. You may also have different feeds or applications supporting workflow, transaction loading and reporting.
Map capabilities to each invoice type/use case - what process and application meets all or most of the requirements for that invoice type. (Rinse and repeat.)
Now, we know the types and volume of invoices your company uses and have largely mapped them to process and application capabilities.
Using this data, these questions should be easy to answer:
- Are all invoice types accounted for - in terms of process and application?
- Do your existing applications meet most (if not all) of your requirements?
- Can you aptly meet the needs of “must have” requirements - like regulatory reporting?
At a back of the napkin view - you will find gaps. Gaps in coverage, functionality and requirements. This creates a healthy conversation about maximizing the use of existing tools and/or go-to-market to find solutions that better fit the requirements.
The good news is, the market provides many solution options to solve each invoice use case. The challenging news is - many of us are not thinking about invoice automation in this way. We like the single platform solution mentality. Some of these edicts can still be true but the mechanics of invoice automation are not covered by any single business process or brand.
We would love to tell you more and share our thoughts on the process to do this and the solutions we feel solve real invoice automation problems. Feel free to find us via nitorpartners.com or drop us an email at email@example.com