Iron Mountain: Overcome the Obstacles to Seamless Accounts Payable – Bettina Wonsag
New research shows that many companies are still struggling with time and resource-intensive accounts payable processes. Bettina Wonsag of information management leader Iron Mountain explains how BPM can help organisations to streamline their accounts payable operations as they journey towards the ultimate goal of e-invoicing.
E-invoicing has been around in Europe, in various forms, for more than three decades. Despite this longevity, however, its implementation has been patchy. Scandinavia has led the way, with the Danish public sector making a complete changeover to e-invoicing in 2005 and Finland following suit in 2009. Other parts of Europe have been less willing to change, even though the benefits are well understood.
Electronic processing is considerably cheaper and faster than its manual equivalent and, consequently, gives a much clearer picture of a company's liabilities and operating expenses. Greater efficiency also allows finance directors to formulate better informed short-term cash management strategies. But with 96% of Europe's invoices still in paper form, many enterprises and government bodies remain unconvinced. A recent piece of research carried out by information management leader Iron Mountain, in partnership with YouGov, sheds light on some of the reasons for this reticence.
Taking into account the views of 200 business people with responsibility for invoice payment - 50 from each of the UK, Germany, Spain and France - the research found that 40% of larger businesses continue to be discouraged from adopting e-invoicing because of perceived complexity and a lack of standardisation. Thirty-six per cent of UK and Spanish respondents, and 40% of those in Germany, said they would introduce e-invoicing if there were a standard format. In fact 30% of respondents from the UK finance community openly admitted to being frustrated with their current accounts payable system.
According to Bettina Wonsag, general manager of Iron Mountain's new BPM division, finance directors across Europe face similar challenges, even if their prioritisation is slightly different.
"The main pressure points include the time required for manual processing - with its associated potential for error and data loss; not being able to make payments on time; not being able to benefit from discounts; and a lack of ability to make accruals," she says. "In many finance departments, accounts payable professionals are tied up doing low-level manual work, which is a terrible waste of knowledge and expertise."
End-to-end document management
Iron Mountain's BPM division has been formed to help companies overcome these pressure points, optimising accounts payable processes to reduce risk and establish a clear audit trail as the business moves down the path towards e-invoice implementation.
It is an end-to-end document management solution, from processing through to retrieval, which can handle many millions of accounts payable transactions a year. It can process invoices of any format and in any language, transcending geographies and legal entities.
"We can capture the data in various formats, extract the relevant information, validate the data and then workflow that information to the right person," Wonsag explains. "It's a threefold product suite: capture, enablement and workflow automation."
This system brings with it many benefits. As invoice volumes grow, many finance systems reach their limits and require heavy investment in new hardware and software. Iron Mountain's BPM solution, which makes use of a custom-built processing facility in Bratislava, Slovakia, can give companies easy access to their information without the need for heavy capital expenditure on new systems and infrastructure.
"It increases transparency and the agility of a business to react, and stops you having to manually route work, which at its worst can mean running around an office with an invoice shouting, ‘who is supposed to pay this?'," Wonsag explains. "Then there is compliance and risk mitigation. You have an audit trail and the ability to make accruals and enhance financial decisions. This makes the finance director truly accountable and gives them the ability to act quickly."
Local compliance needs
Compliance is, traditionally, a significant hindrance to accounts payable departments. All European countries have rules governing the movement of physical invoices. Some allow for physical paper to leave a country providing it is stored digitally first, others do not. Iron Mountain's extensive scope goes a long way to negating these differences.
"We have a significant footprint in Europe," Wonsag explains. "So if you want your data captured locally, we can do that; if you need to store it locally, we can do that too. This makes us unique in the market and gives us the confidence that we can serve clients according to their needs."
Wonsag is confident that a wide range of verticals can benefit from the new BPM solution. "In the retail sector, it would be hugely beneficial to derive potential discounts from paying early or within certain limits and the financial services sector would also benefit from the increased efficiency," she explains. "Then you have construction and manufacturing, where business-critical processes can be stopped if you don't pay your suppliers on time. BPM will be vital in these cases."
More generally, such a system could prove beneficial to any company that has to deal with a lot of external suppliers, particularly those that are less mature in their procurement-to-pay cycle.
"Firms that have a lot of vendors and invoices but unsophisticated procurement or purchase ordering systems can all benefit," Wonsag explains. "We can elevate their accounts payable department, allowing accounts payable professionals to deal with only the relevant pieces of information as opposed to having to scan, fix and route the information."
The legal, social and political barriers to overcome in Europe are more numerous than in most other parts of the world, yet the continent often leads the way in thought leadership.
"Europe is very complex, with so many different legal environments to negotiate," she explains. "We can't take a black-and-white approach by saying ‘there is either paper or e-invoicing'. You go down the route that feels natural to you, say 95% paper, and then continue from there. Our BPM solution can help with every combination of physical or digital invoices."
Impetus for change
Down the line, Wonsag is very positive about Iron Mountain's BPM prospects. Invoice volumes and associated costs are only set to rise, making the benefits of such a service increasingly clear.
"I want Iron Mountain to be known as an information provider with real strength in the BPM business," she explains. "I would like to see us expand our reputable client list and for BPM Europe to become a strong platform on which to build our business. We are already able to offer increased standardisation of services through a localised model. This is, in my opinion, a great platform for growth and exactly what our clients are looking for."