There are piles of paper invoices stacking up in empty offices around the world right now, with limited options for accounts payable teams to actually pay them.
Social distancing measures, designed to limit the spread of coronavirus, are forcing accounts payable teams to reduce hours or work from home entirely. And it’s causing unprecedented disruption in outsourced centers that handle their paper invoices—simply because the “office” is where all paper invoices are sent.
According to the latest data from Ardent Partners, 49.7 percent of all invoices are paper-based, which means there are a lot sitting there unpaid right now. We estimate that businesses around the globe create around 21 billion paper invoices every month, meaning there are a lot of seller payments that could be delayed.
Failing to process and pay these invoices in a timely fashion is no trivial matter. If accounts payable can’t function properly, neither can the rest of the supply chain—businesses need to get paid. And if supply chains can’t function, it will create dire issues for every business it touches. The entire house of cards could start crumbling, and that’s of greater concern during the pandemic.
COVID-19 is intensifying accounts payable challenges
While the COVID-19 outbreak has hit businesses hard, suddenly, and at an unprecedented scale, it’s largely intensifying pre-existing challenges, rather than creating new ones.
The primary culprit is the use of paper in accounts payable—forty percent of teams cite paper as their number one challenge according to Ardent Partners. Many more list it as their second and third.
And for good reason. Ardent’s report shows that it increases the cost of doing business, prevents sellers getting paid promptly, wastes staff hours, creates unnecessary risks, and limits the visibility businesses have into their supply chain activities.
Why sellers have resisted e-invoicing
Why then is paper invoicing still used if it creates all these problems? It’s a question worth asking—it’s not like companies haven’t spent large amounts of money and effort already on systems that promote electronic invoicing. Yet, as the stats show, they’re not delivering the expected value. There are plenty of reasons for this, but the most pervasive is simply seller inertia.
Seller adoption is the major roadblock to e-invoicing solutions. And given the way many e-invoicing projects traditionally run, it’s easy to understand why. To get live, sellers must follow a series of cumbersome processes that ultimately create more work for them with very little return on investment.
So why should they bother? They might as well stick with paper—and very often, they do. But now they have no choice.
Seller need to go digital—they’re demanding it
The world has changed in recent weeks. Paper invoices are no longer viable. If sellers want to get paid on time they must send their invoices digitally.
This presents buyers, who’ve struggled their way through various e-invoicing projects with limited results, with a window of opportunity to finally digitally connect their supply chain. By doing so they and their sellers will be better positioned to promote business continuity through this uncertain time.
It will also set them up for success when this period of disruption is over. Because when it does end, supply chains will look very different than they did a few weeks ago. And those businesses in the strongest position to thrive will be those who are digitally connected to a thriving seller base that has been paid despite the obstacles of paper invoicing.
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