Cash flow is essential to the livelihood of any business. Many assume that profit is of utmost importance, but this is a mistaken assumption. Without cash flow, a business will not be able to operate. Indeed, many businesses fail because they pay more attention to profit rather than cash flow.
A key aspect of cash flow management is the management of expenses. In these trying times, good spend management is even more critical. A big part of that is invoice management, i.e. tracking and paying invoices from suppliers and vendors. It plays a big role in ensuring that a company has a healthy cash flow.
By staying on top of payables, the company is better able to maintain optimal financial health. However, this is much easier said than done. Invoice management that relies on manual data entry can do more harm than good. It is tedious and time-consuming. It is prone to human error. It gives poor cash flow visibility. Worst of all, it increases the risk of fraud and has poor regulatory compliance.
The procure-to-pay process can be convoluted and messy. In the Asia Pacific region, this gets even more complicated. Markets in Asia are fragmented. Often, businesses need to manage multiple invoice formats in different currencies and languages from different suppliers in each country. Digitalising and automating invoice management mitigate these risks.
The benefits of optimising invoice management processes
Automating invoice management can make the process more efficient and effective. In 2017, SAP Concur sponsored a study by IDC that interviewed eight organisations using Concur Invoice. The study lists many noteworthy findings.
Through automation, businesses can cut their invoice processing costs by an average of 29%. This means organisations that process up to 10,000 invoices every month can save up to US$300,000 every year. Within five years, these organizations will achieve a projected 505% return on investment and benefits worth a discounted average of US$2.75 million ($54,647 per 1,000 invoices).
Furthermore, utilising Concur Invoice can cut the time spent processing invoices by a hefty 68%. It improves compliance by 14% and reduces delayed vendor payments by 67%. The IT staff, meanwhile, spend 29% less time managing invoice management solutions. By enhancing user experience and making invoice management available on mobile devices, the software also improves the general productivity of the company by 11%.
How SAP Concur Invoice helped Continental Korea and Agribank optimise their invoice management
Those studies provide promising numbers. But to get a more concrete idea of how optimising the invoice management process can help your business, let us take a look at Continental Korea and AgriBank.
Continental is a supplier of auto parts. It has a head office in Germany, with branches spread over 60 countries. Its Korean branch employs around 2,500 spread across eight locations and continues to grow.
This growth posed an unexpected problem. It turned out that each of the eight sites had its own expense management workflow. There was a lack of visibility among them, resulting in a silo problem. These systems were also unable to synchronise with the head office in Germany.
On top of that, employees tended to reimburse their travel expenses manually. This decreased productivity levels and caused other problems in their own right. Their expense management quickly became inefficient. Their global business operations became weaker as a result.
Thankfully, they were able to quickly turn things around. Utilising SAP Concur Expense, Concur Invoice, Concur Request, and Concur Intelligence, they were able to build an integrated expense management system. Specifically, Concur Invoice was able to automate the company’s invoicing processes. It also gives them real-time global visibility of all expenses across all eight sites of the company.
Through SAP Concur, Continental Korea was able to gain better visibility and insight into their cash flow. This allows them to optimise their expense management and pre-verification process. By making expense and invoice management less tedious, they were also able to increase their employees’ productivity.
AgriBank is a US-based funding bank that serves Farm Credit Associations. It provides funding and financial solutions to locally-based lenders that support farmers, ranchers, and other rural customers across 15 states.
Spreading across vast geographical locations, AgriBank faced problems in their legacy expense management system. Paper-based with multiple spreadsheets, the system was slow and inefficient. They employed two staff members for accounts payable that manually audit each report. Clearly, this needed to change.
AgriBank found the solution through a suite of SAP Concur tools. This included Concur Invoice, Concur Expense, and Concur Intelligence. AgriBank started with automating their expense management workflow with SAP Concur’s help. Later on, the company also decided to streamline their invoicing workflow.
Automating invoice management allowed AgriBank to set up built-in audit and receipt rules. This significantly improved the efficiency of processing and approvals. Invoices were recorded digitally via image capture and routed to an Optical Character Recognition software. The technology converts the printed details into machine-encoded text. This eliminated the need for accounts payable staff to manually input details like vendor name, invoice number, and dollar amounts.
Digitalising these records also made invoice storage and retrieval faster and more convenient. With SAP Concur, AgriBank finally has an expense management system fitting for a company of its stature.
Stay ahead of the curve with SAP Concur
The Asian market is a competitive one. With each office branch dealing with a different language and currency, it is also notorious for its challenges. Businesses need all the help they can get to stay competitive and maintain a healthy cash flow.
Optimising invoice management is one often overlooked source of productivity and efficiency gains. Digitalising the process gives organisations better visibility and insight into the state of their finances. Furthermore, it increases employee productivity by freeing up precious resources for things that really matter.
As Continental Korea and AgriBank have shown, the SAP Concur suite can really help businesses deal with their specific expense management challenges. By improving your invoice management process, SAP Concur will take you to new heights. With it, you will be able to realise potential benefits and improve resilience, always staying ahead of the curve throughout.
For more on our #BusinessSpendManagement series, click here.