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Wednesday July 28, 04:53
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US companies keen to automate Ooder-to-pay cycles
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US enterprises seeking to cut costs are focusing on order-to-pay processes to reduce savings leakage and optimize their cash flow while avoiding penalties or overpayments. Corporations responding to a survey by Aberdeen Group defined their priorities for invoice reconciliation and payment (IR&P) programs as the improvement of cash flow (71 per cent), the avoiding of overpayments (60 per cent) and integration of payables and treasury decision making (46 per cent). Almost 80 per cent saw cost reduction as a major objective, while 70 per cent ranked liquidity as a priority and 55 per cent viewed IR&P as a solid anti-fraud tool.
Successful IR&P programs at US corporations appear to be limited by the difficulty in “making a business case for automation and technology”, according to Aberdeen. Despite this, US corporations need to close the loop for procurement savings, with Aberdeen finding the payables issue to warrant urgent attention in that the average corporation spends over 50 cents per dollar on non-traditional or field-based expenditure classifications. While 62 per cent of responding firms centralize data accessed during manual operations, Aberdeen notes that “technology has yet to establish itself as a consistent enabler of IR&P programs”.
Many firms are open to commissioning third-party, pre-configured solutions to automate and improve data integrity and manage routine processes, Aberdeen reports, but less than 1 per cent of respondents had outsourced their accounts payables function. Procurement cards, conversely, are invoice-less and usually include web-based reporting systems to streamline approval and reconciliation processes. The managers surveyed would welcome greater automation in most IR&P processes, with invoice matching identified as the activity most likely to be automated, although dispute resolution may remain manual for some time.
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