Invoice management falling behind with digital transformation

This leaves them struggling with productivity, cost and efficiency issues, according to new UK research among senior finance and IT executives.

IT which most commonly leads digital transformation said finance was the department with the greatest need to transform in the survey, although 45% said finance team resistance was hindering this, while 39% says an over reliance on manual processes was holding them back from ‘going digital’.

The study was conducted by Sapio Research and e-procurement provider Wax Digital, surveying over 200 senior finance managers and over 100 IT professionals.

80% of finance professionals admitted they’ve struggled to keep up with the business’ digital goals, with 66% saying they are more paper reliant than other business functions, and 58% unlikely to make decisions or manage approvals electronically.

On average, while two thirds of every financial process is automated or managed electronically, one third of the task still requires manual intervention. The manual work required for some processes can be up to 50%.

Expenses, budgeting and debtor management are among the financial processes with the lowest levels of automation, manually carried out 36.5%, 35% and 34% of the time respectively.

But it is invoice management that is most in need of modernisation, with 66% of supplier invoice data needing to be manually rekeyed and processed. A surprising 9% of invoices are still delivered by fax, while 19% come though the post, 15% are hand delivered, and 23% arrive via email. In contrast, only 11% of invoices arrive through e-invoicing portals, while 20% come via direct integration between suppliers’ billing systems and customers’ financial systems. 3 % of invoices are delivered through ‘other’ means.

Accounts payable and accounts receivable – both one third manual – are the two financial processes considered by the business to be in greatest need of digital transformation. Invoice processing is also in the top two financial activities that businesses say need to be addressed in order to increase efficiency, and the top outcomes that businesses wish to see from this include: improving productivity, for 65%, removing paper from the department, for 65%, identifying cost savings, for 50%.