The Invoice Reconciliation and Payment Benchmark Report
33 Pages
English

The Invoice Reconciliation and Payment Benchmark Report

-

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer

Description









The Invoice Reconciliation and
Payment Benchmark Report








June 2006

— Sponsored by —

The Invoice Reconciliaiton & Payment Benchmark Report
Executive Summary

nvoice Reconciliation and Payment (IR&P) is more than simply processing invoices
and paying bills. It is the foundation into gaining real-time visibility into costs and
supplier performance. In an economic environment with wild price-swings in busi-I
ness costs, IR&P should be providing information on spend and costs to manage the
enterprise and maintain competitive position.
AberdeenGroup received survey responses from approximately 150 industry executives
and managers to gain further insight on IR&P processes, strategies, processes, chal-
lenges, and successes. This report identifies the current priorities, top pressures, and spe-
cific strategies Best in Class enterprises are implementing to increase the business value
delivered from IR&P activities.
Key Business Findings
Aberdeen’s 2006 Invoice Reconciliation and Payment Benchmark Report reveals that
enterprises are seeking to reduce their costs through
maximizing liquidity and cash flow and headcount More than two-thirds, or 69%, of enter-
reductions. A key area of focus is improved visibil- prises report they have limited-to-no
ity into spending. Gaps in the source-to-pay lifecy- visibility into spending.
cle include processes where critical information is
not collected, data is poorly organized, ...

Subjects

Informations

Published by
Reads 87
Language English
 
 
 The Invoice Reconciliation and Payment Benchmark Report   
June 2006  
— Sponsored by —
The Invoice Reconciliaiton & Payment Benchma
Executive Summary
Isnyprimplsingocesioecivnscoansudilpppreofreintogainingrelat-mieivisibilirpdliwhtiwtnusbinsngwi-scencenIaec.mrnaonmenviriceonom-iaontiiailnccoReeciovansethmor)isRIP&tn(yaemdnPand paying bills. It is the foundation ty into st ness costs, IR&P should be providing information on spend and costs to manage the enterprise and maintain competitive position.
AberdeenGroup survey responses from approximately 150 industry executives received and managers to gain further insight on IR&P processes, strategies, processes, chal-lenges, and successes. This report identifies the current priorities, top pressures, and spe-cific strategies Best in Class enterprises are implementing to increase the business value delivered from IR&P activities.
Key Business Findings Aberdeens 2006Invoice Reconciliation and Payment Benchmark Report reveals that enterprises are seeking to reduce their costs through rmeadxuicmtiioznins.gAliqkueiydiatryeaanodffcoacsuhsfilsoiwmapnrodvheedavdicsoibuilntMore than two-thirds, or 69%, of enter-ityintospending.Gapsinthesource-to-paylifecy--prises report they have limited-to-no cle include processes where critical information isvisibility into spending. not collected, data is poorly organized, systems are not well integrated and information is not centrally collected for reporting, spend analy-sis, and business intelligence. This results in problems gaining real-time visibility into business costs and supplier performance. Only 4% of the enterprises in this benchmark have real-time visibility into this critical financial information; 27% reported they had good visibility into spending, and 69% report they have no visibility or limited visibility to spending. (See Figure 1)
Figure 1: Visibility into Spending
80% 70% 60% 50% 40% 30% 20% 10% 0%
69%
Limited to No Visibility
27%
Good Visibility
All print and electronic rights are the property ofAberdeenGroup© 2006. AberdeenGroupi
4%
Real Time
  
Source:A bendreeGroup, June 2006
rt
The Invoice Reconciliaiton & Payment Benchmark Report
 
Implications and Analysis Lack of visibility into spend is alarming given that enterprises face an environment in which costs have become less predictable. Staying competitive in the marketplace re-quires access and visibility to costs and programs to manage these costs. One of the challenges in gaining visibility into supplier performance is the large volume of paper-based transactions and variety in the types of billing processed. Paper remains stubbornly entrenched in the billing process. This benchmark reveals most billing (83% domestic and 86% for international) is received in paper format. 
Figure 2: Paper Invoices vs. Electronic Billing
Domestic 17%
International 14%
0%
83%
86%
20% 40%
Electronic
60%
Paper
80%
100%
 Source:A eenberdGroup, June 2006 Most enterprises are not able to get the data from different systems organized and inte-grated into one repository. Nearly one-third, or 34%, of the respondents in our survey report that they have three or more systems to manage invoice processing, reconciliation, and payment. An additional 10% of the respondents do not know how many systems they are using.
Few enterprises have realized the potential to effectively leverage data from the IR&P process. The process and data extracted from it are not well-integrated with sourcing, procurement, and ERP systems. To maintain competitiveness in an environment where supply costs are rapidly changing, enterprises must improve their IR&P processes to im-prove visibility into spend and drive cost reductions.
Recommendations for Action  Automate labor-intensive invoice processing. Manage payment terms and capture cash discounts.   use of financial institutions trade services and working capital solutions.Increase  Work toward a fully visible, integrated environment for the source-to-pay life cy-cle.
 supplier score cards for improved cost management.Develop
All print and electronic rights are the property ofrdbeneeAGroup© 2005 ii •ebAenedrGroup 
 
The Invoice Reconciliaiton & Payment Benchm
Table of Contents
ort
ExecutivSe ummary.......................................................................... i......... ..........
Key BusinesFsi nding.s............................................................................ ..... i
Implicationasn d Analyss.i......................................................................... .....ii
Recommendatiofonrs ..n.ioct........................A.......................................... ....ii
Chapter OnIes:....................................................dnaH ta eus...................... ..... 3 Pressures of tIhRe& P Proecss.................................................................. .. 3
Enterprises are Crushed Mboy uan tain ofa pPer iBlls.................................. 4
Chapter TwKo:e  yisuB Fuediinssneal V....ngs.................................................... 6
IR&P Chlalenges......................................................................... 6......... ........
How are Companies Respontod itnhge se hCallenge?s................................ 8
Enterprise Approaches atno aMging the IR&PrPo cess............................... 10
Chapter Thr e eI:............n.A.l..a.s.y.s.i..................m.p.l.i.c.a.t.i.o.n.s. .&. ......... 12
Chapter Fo:uRr..............................................s fotiontionr Aceneadocmm........ 6
Laggard Steps  Stuoccess................................................................ 16........ . Industry Average S tteop sSuccess............................................................ 17 Best in ClasNsext Setps ......................................................................... .. 17
Featured pSonsors..................................................................................... ....... 19
Sponsor Dircteory............................................................................. 21......... .......
Authors oPfriles......................................................................................... ....... 22
Appendix AR:e es Metarchlogyhodo................................................................. 23
Demographics of threv eSyued Popautlion.................................................. 3
Appendix BP:A .................................C.........l.o.g.o...y...... .E.e.M.h.t.d.o......... 24
Appendix  CIn:....sscero PontiailicnoceR & tnePaymice vo................................ 27
Appendix  DR: ....................................... &oTols eRaerschelated Aberdeen...... 2 About AberdeGernoup.................................................................................
All print and electronic rights are the property ofAberdeenGroup© 2006. AberdeenGroup
... 29
The Invoice Reconciliaiton & Payment Benchmark Report
 
 
 
Figures
Figure 1: Visibyilitnto Sepdnni.g............................................................ i......... ...
Figure 2: Paper Invoivcse. s Electrocn iBilling...................................................... i
Figure 3: Top Pressur etsh eo fIR&P ........s.esocr............................................ 3
Figure 4: Enterprise Visibility ifnorg ,P rDiicscounts & Supplier Performan 6ce ....
Figure 5: InvoiBciell ing rErors.............................................................. 7......... .....
Figure 6: Estimated Percent eocf tPerdo jProcuremeSnatv ings Booked............. 8
Figure 7: Current and Planne....................... Ud osIRf  A&Pmotuoita...n............
Figure 8: IR&P Ovlle rIsa Centlrlay-Manage..d.................................................. 1
Figure 9: Outsourcintgh eo fI R&P Porcess........................................................ 1
Figure 10: Systemse du sto ManagIRe &P........................................................ 1
Tables
Table 1: The Impact of PapLaerb o&r -Intensive nBigl liProcesses...................... 4
Table 2: I&RP PACE............................................................................ 5........ .......
Table 3: IR&P Comitpievte Fraemwork............................................................. . 13
Table 4: PACE (Pressurest,i oAncs, Capabilit ieEns,ablesr)............................... 25
All print and electronic rights are the property ofAberdeenGroup© 2006. 
AberdeenGroup