Organisations are recognising that e-invoicing is the starting point for improved efficiency and essential for gaining the true benefits of automation, and in many cases they’re realising that emailing invoices as pdfs inevitably incurs the same issues as printed invoices.

There are many benefits to e-invoicing adoption: greater visibility, faster processing, improved accuracy and reduced costs, to name a few. In this video organisations including SITA, The Co-operative Group and UniCredit Bank explain why changing to e-invoicing is a worthwhile and essential step.

Today’s businesses face the dual challenge of intense global competition and economic uncertainty. Agility is used as a competitive weapon and has become a watchword for C-level executives when it comes to spending. In other words, they need to be able to cut costs in line with falling revenues and identify and negotiate the best deals.

The problem with traditional procurement systems is that they are inflexible and prevent executives from making the rapid and informed decisions necessary for an agile business. Research demonstrates that businesses are missing up to $1bn annual costs savings because of procurement systems that prohibit effective decision-making.

As businesses grow the challenge of controlling spend becomes ever larger. Cash leaks from every department of the business and controlling this flow without the right tools and processes is an impossible task. Renegade spend can result in hard won discounts remaining unused and visibility of spend disappearing.

Many businesses use catalogues to manage a large supply base but changes in availability and pricing means keeping catalogues current, compliant and available to all quickly become a never-ending task. E-procurement allows buyers to collaborate closely with suppliers, controlling spends, updating quickly on changes and allowing both sides to get the best out of the relationship.

Suppliers are no longer merely providers to a business but partners and a source of competitive advantage. These new collaborative relationships require governance and management, and progressive businesses see collaboration with suppliers as key.

E-procurement places the user at the centre of the procurement process, allowing a whole new level of visibility and access to actionable information. Businesses are able to source, manage and collaborate with the right suppliers and bring a greater volume of spending under control.

However, the success of an e-procurement programme is dependent a positive end-user experience. Cumbersome systems result in frustration from users and result in a lack of compliance. Applying the characteristics that have defined the success of ecommerce – particularly its simple and intuitive user experience – to e-procurement will encourage widespread use and better control.

So what do companies who wake up to e-procurement get? Happy executives who can make quick, informed decisions, a healthy balance sheet and productive supplier relationships that bring real competitive benefits.

More: Basware breaks down barriers to e-procurement with launch of Basware Purchase

As the systems stack up, transparency, control and efficiency, in short all those things the systems were brought in to help, end up suffering. For Finance and Procurement, which rely most heavily on these, a lack of transparency and siloed systems can mean lost negotiating opportunities, low levels of compliance and poor reporting. By the time key information is disseminated, it’s already out of date, directly affecting an organisation’s ability to optimise profits and stay competitive.

Without the right information reaching the right people at the right time, cash flow, supplier relationships and ultimately growth can be irreparably damaged.

In a recent survey 71% of CFOs said greater levels of reliance between disparate finance systems created concerns over cash flow visibility. Almost two thirds of those surveyed saw connecting disparate parts of the purchase and payment process as a critical priority for 2013.

Whilst technology may seem the enemy it’s often a case of poor integration between siloed departmental systems. Disparate technologies struggle, or are not set up to share information, leading to data stagnating in divided systems. And the burden on IT of managing these disparate systems can be great.

Many of the answers to simpler corporate finance lie in transparency and collaboration. Something that technology should facilitate, not obstruct.

CFOs cannot be successful unless they can reduce expenditure. Procurement executives cannot strike better deals without more effective financial processes. By tying together the systems that support these processes, procurement and finance are both armed with what they need. The real-time information, collaborative capabilities and effective processes to secure the best deals, manage supplier risk or volatility and reduce costs.

IT leaders need to create a landscape which supports efficiency. There is no longer the need to consolidate systems in order to provide a standard for finance. A standard process across Purchase-to-Pay (P2P), supported by an integrated platform, allows finance and procurement to collaborate and reap significant rewards. It will also provide a basis for growth and allow easier system roll-out in future, better supporting your organisation’s long term and strategic objectives.

If you’re interested in this topic, you may like to read our white paper:Integration in Multi-ERP Environments; Business Benefits and Functional Integration Scenarios

With UK businesses already facing tough times, practices like these not only exacerbate cash-flow issues for suppliers but also damage relationships and increase supply chain risk.

The retailers hitting the headlines last week work with suppliers large and small, from one-man band artisan biscuit makers to huge apparel brands. With such a broad range of suppliers a blanket approach to payment terms and negotiation can cause significant issues. Whether causing smaller retailers to buckle under the pressure of punishing payment terms or causing larger brands to favour competitors, the risks of ignoring relationships and background of your supplier base can be significant.

Relationships between buyers and suppliers are of paramount importance in securing the best prices, terms and product offers. As such specific approaches are required to ensure payment terms don’t create the kind of pressure that can cause smaller suppliers to collapse or cause larger brands to turn to rivals, or even direct channels.

Whilst many companies like to keep their cards close to their chest a collaborative and transparent relationship between suppliers and buyers is key to securing discounts and favourable terms. Using purchasing power to bully suppliers can damage relationships and reputations in the long term. This can increase hostility to future negotiations and perhaps place the business lower down the pecking order when it comes to exclusive deals, which can be highly lucrative to retailers.

Heavy handed and indiscriminate approaches to payment terms can often come as a result of poor communication between finance and procurement. For the finance department it’s important that the reductions are achieved, so a consistent approach can seem the simplest way to achieve that. However supplier relationships may not be high on their list of considerations. Procurement often holds the knowledge that could help determine whether the terms are appropriate or if better deals could be achieved with a personalised approach.

Retailers need to look to the knowledge they have internally and take a measured approach to supplier negotiation. Whilst incentives for prompt repayment can be an effective tool, a one-size fits all approach can do more harm than good.

Add to this some of the regular issues with reporting; attempting to bring together data from disparate systems and managing figures across multiple spreadsheets, and you get caught in a finance quagmire full of delays. After all your hard work the information you release is ultimately out of date and only provides the business with a historical position.

For businesses in a tough climate, reliant on accurate financial information, this isn’t the best position to be in. Nor is it beneficial to you and your team.

In short, the lack of visibility and control across systems makes closing an accounting period more difficult than it should be. Having the ability to report in real time and get an accurate picture of your cash flow position enables effective business decisions to be made, which directly impact profitability and your organisation’s ability to be competitive.

Most companies have more cash than they think they do. It’s just that it’s obscured from view. It’s hidden within opaque paper-based invoicing, in costly manual workflows, in a host of processes that have passed their sell-by date and value to the company.

If you recognise these issues and want to find out how finance and accounts payable can create value and drive a more strategic agenda based on increased visibility and accurate information, then you should take a look at our Purchase to Pay Manifesto.

However one thing is clear: Plan A remains intact and the Chancellor is playing with the change down the back of the sofa in this budget. However questions remain over whether this is the change we need.

The big numbers and focus remain largely the same, but the year 2015, when a lot of these policies will come to fruition, remains a long way off. With further downgrades to estimates for growth and even more risk from the Eurozone, the outlook for economic confidence remains grim but largely stable. That stability is important to large and small businesses alike. But the test comes to ensure that stability doesn’t become a long slow march into decrepitude.

Reducing the ‘jobs tax’ will make a real difference to UK business, removing barriers for growth and aiding the acquisition of skilled employees. However, businesses large and small must have the confidence to use this £2000 allowance to boost growth rather than building up the cash buffers.

So how was the budget for you? Has the chancellor offered UK business enough of an impetus for growth or is it time to turn to plan B?

Share your thoughts with us @baswareUK or below the comment line.

According to the long-standing Peter Principle management theory, even the best people in a business will be promoted beyond their level of ability. Some will be moved to the point where they are no longer experts in their field or may not have the required skill set. You may have the best salesman or manager in the world, but that doesn’t necessarily prepare them for greater financial responsibility.

The established Peter Principle of over-promotion is re-incarnated in small businesses today. Executives are not necessarily over-promoted, but they are ‘cross-promoted’ often given more and more responsibility that they don’t have the time or the training for.

Small business leaders have increasingly high workloads, which often include financial duties. The relative size and budgets of SMBs in comparison to larger corporate businesses means they can often lag behind in terms of the resources available to fulfill certain tasks.

Responsibility for financial strategy lies with senior management, but according to Basware’s SMB Finance research 1 in 3 senior managers admitted they are unprepared to take on the role. The research also found that 45% of senior managers have yet to receive formal financial training. A much greater understanding of the role is needed if senior managers are to be successful in taking on financial tasks, such as forecasting budgets and setting strategy. However many financial tasks can be simplified, automated and delegated to free up the time and brain power of senior executives.

A proven strategy for this is to move from laborious and unpredictable paper-based systems to automated finance systems. This promotes the completion of financial tasks in a standardised and time-effective way. Not only is it quick and accurate, but it is far simpler for employees to do. The result is that financial tasks are completed more readily. Senior executives get more time in hand as simple approval processes can be managed out in the business. This way it is easier to track financial processes when they are electronic and are far more accountable.

Affordable tools are key to this and SMB’s should focus on those that not only require minimal capital investment, but that also don’t require endless time and manpower to get off the ground. Cloud based services are an affordable way of rolling out these tools. Those tools that are off-the-shelf are also a big benefit to smaller businesses. The crucial factor to look for is something that is template-based. This means that processes are based on best practice and can be quickly set up.

Basware works with a large number of small and medium businesses to empower their financial processes. It’s a proven implementation approach that minimises disruption and maximises the benefits that a company can achieve by automating its purchase to payment process.

Shared Service Centres (SSC) have become a well established feature of modern financial practice. Cost-cutting, increasing spend visibility and compliance are just some of the key reasons for adopting a shared service model. However as organisations respond to the increasing need for spending cuts and weigh up the possibilities for collaboration, there has been significant debate on how else shared services and back office efficiency improvements can contribute to on-going cost and spend reduction

Understandably, cost-cutting is top of the list on all agendas but people recognise that there is also a need for sustainable change. For most organisations there is a point past which simple cost-cutting or price-slashing fails to deliver true economies of scale. Straightening out long-standing processes and ensuring visibility and control in every aspect of daily operations is a better catalyst for holistic and sustainable efficiency. In my experience successful finance shared services deliver on both of these points. Not only do they create greater efficiency and cut costs in the short term, but more importantly they provide information back into the organisation which can lead to even greater, long-term savings. Such savings come from compliance, supplier consolidation, and stronger negotiation, to name but a few.

That said, the transactional savings are credible in themselves. Organisations utilising automation within the finance department are achieving processing costs of less than £2 an invoice. Compare that to costs of over £20 for those without automation; based on processing 100,000 invoices, it’s a saving of £1.8M per annum. Finance teams utilising automation can also reduce receipt to payment times from 33 days to 5 days, enabling early payment discounts and improved prices from suppliers. A review of case studies found that early payment discounts alone could amount to approx £1M per £415M spend.

But whilst cutting the cost of finance is an essential ask of a finance shared service centre, the real benefit is the transformational power that it holds. Through this finance can help drive change across the way in which an organisation conducts processes and functions as a whole.

In its infancy the shared service centre was primarily designed to suit a tactical function within the business, focusing on streamlining transactional processing and cutting costs.  However, there has been a significant shift in this role; through the sheer volume of data it gathers. The shared services centre is a mine of valuable information that can aid business decision making.  Whether through input into budgets and resource planning or implementing operational changes, the SSC (and the finance team as a whole) are increasingly able, and indeed expected to, impact strategy. The information gathered and insight it provides is essential when determining some of the most significant opportunities for cost reduction.  Once established, the data that a shared service centre possesses can join up various disparate pockets of information from across the business.

What has driven this transformation of the role of the SSC? In many cases, technology and automation.  The rapid evolution of technology has slashed the cost of transactional processing and made information more readily available than ever before.

However, technology is not enough in itself.  The skill set within the shared service centre has developed in line with the demands of the industry as a whole.  As more specialised services are now available, there’s a great opportunity for organisations to take advantage of the value these can add to their teams. Consolidating business centres used to be only about costs but today, there is much more focus on specialised skill sets and how these can deliver competitiveness and efficiency.

When assessing the possibility of shared services and back office efficiency, there is a need to look beyond the short term reductions and understand the long term value of information.  Information, that when used correctly, can make your task of finding sustainable savings a lot less daunting.

Survey the landscape

The first step is to understand your organisation and the way it functions before embarking on any changes. This includes internal and external customers and service users and suppliers.  Legacy processes and systems also need to be taken into account. The starting position can often be fragmented or ‘siloed’ but it is important to view all processes as a whole. For example, when you talk about finance, accounting and procurement in your organisation, it’s important to look at the areas you want to improve in relation to the overall strategy. What is it that the organisation wants to achieve in the long term?

Establish your goals

Select your primary goals at the outset and benchmark against best practice and industry leaders. This way you can set the areas for improvement, lay the foundation for your business case, and then monitor against these targets on a continuous basis. It is essential to strive for compliance and transparency throughout. Select which processes are most important, analyse what is present, and don’t be constrained by current thinking. Always revisit the strategic goal and plan your journey towards this, taking the organisation with you.

Take time to understand and communicate

All change programmes need to be built on solid foundations. There has to be a powerful rationale for the change, and this must be communicated in a coherent and genuine manner. Don’t criticise earlier processes or ways of working, but give a firm reason why change is needed and the direction this will take the organisation in. Apply a consistent message at all times, and do so with commitment to your organisation’s values. It is also a good idea to establish teams to pool good practice knowledge and to define the end result. This will make it easier to share information, define requirements and provide direction.

Work on building a shared understanding at senior management of the changes involved. Be clear in your own mind what the project is about. Recognise that you will need to present and talk to individuals who are affected by the change in very different ways.

That requires preparation. If you choose to communicate at an early stage, don’t guess at answers. Follow up on questions and make time for groups and individuals. Plan regular project management workshops. It is also vital that the project team owns and takes responsibility for stakeholders’ reactions. If anyone feels out of line with the project goals, try not to criticise them. Communicate with them more effectively and change your approach accordingly. Create tangible targets for them and spend time clarifying and discussing these. Once the business case is approved, inform people with timelines, face-to-face briefings and one-to-one support. Explain the plan and rationale.

If change is communicated early, and uncertainty managed, you can ensure positive participation from those involved. It is important to work together to find the best solution and to understand everyone’s requirements. It also reduces project risk. There will always be challenges when handling a project – the solution is to deal with them positively. Be aware that you might need extra resources. Ensure these are part of the plan so everyone is aware of this at the outset. At the end, a successful project requires clarity of why the change is happening and where it is going; the support and involvement of everyone involved; communication and consistency of message; and the commitment to dig deep and support during tough times.

Recognise that this is a journey – be prepared to work with changes as they emerge but never lose sight of your destination.

If you’re interested in learning more about effective change management, check out our video:

The ABB story – purchase-to-pay automation – goals and challenges in a global enterprise – Video

Nigel Chapman, Change Management Facilitator at ABB, shares his experience and practical advice, providing you with practical steps to reduce project risk and attain faster ROI. ABB successfully automated its invoice processing to increase efficiency and reduce costs.

However when you come to seek additional ways to cut costs, delegrating process improvements to the BPO vendor can be a challenge.

CFOs are continually looking for cost savings opportunities that do not undermine the core capabilities of the finance and accounting function. Cost cutting is the priority, but CFOs also want to unlock value and bolster top-line growth. Organisations often overlook two things:

• Finance doesn’t just support the business, it can also advance it.
• The ability of an organisation to plan, implement, and improve its finance infrastructure is as much a core competency as any other.

In today’s quickly evolving business world, you shouldn’t be left behind just because you have outsourced your finance and accounting function. The means to improve efficiencies varies from one company to another, but in general you need to improve the level of automation in your financial process. To achieve this you have to incentivise your provider somehow, but it needn’t be by providing new technologies. Today’s transaction-based pricing models, coupled with software-as-a-service (SaaS) solutions, enable your BPO to make huge process improvements with little or no technology investment.

Here at Basware we’ve written an eBook on the opportunities organisations have, when outsourcing the finance and accounting function, to ensure and accelerate process improvements, drive continuous savings and improve financial insight.

Have a look to see if you can find some simple solutions to the issues you are facing with your BPO provider, without any significant investment or negative financial consequences to that provider. We’ve also run through some of the best ways to financially motivate your BPO provider to deliver better process efficiencies.

Let us know your experiences with outsourcers in the comments below.