Research shows: Large differences in degree of P2P automation

While paper invoices are becoming less common; electronic invoices, on the other hand, are still not popular. On average, 74% of invoices arrive as PDF attachments to an e-mail. Only 15% of the Dutch business community can truly process invoices automatically. This is evident from research commissioned by ICreative into the degree of automation in the purchase-to-pay process.

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In recent months, ICreative had the challenges and developments in the digital transformation of invoice processing mapped. A total of 39 Dutch organizations were surveyed, including 23 organizations with more than 500 FTE. The differences between the organizations appear to be large on all sorts of fronts.

The respondents all had (shared) responsibility for the purchase-to-pay process. The most common positions were finance manager, CFO, finance director, business controller or finance controller. For 85%, the finance department consisted of 6 or more FTEs. In 11%, the total finance department even consisted of more than 100 FTE.

Digitization of invoice processing

A single company still receives about 40 percent of invoices by mail, but on average, paper invoices are almost nonexistent. Nearly 70 percent of respondents indicated that less than 10 percent of invoices come in as paper invoices. Electronic invoices (xml, ubl, et cetera) are not yet popular. Nearly 30% of respondents indicated that electronic invoices account for less than 5% of total invoices.

The Accounts Payable process is still far from automated at most organizations. Less than 15% of respondents indicate that invoices can be processed automatically. Thus, manual work is still regularly involved. 70% of respondents indicated that manual processing is still necessary for most invoices.

Working with purchase orders does not yet appear to be commonplace. A purchase order is regularly in the system, but the differences between the respondents here are also enormous. In one organization, a purchase order is almost always present, while in another organization this is only true in half the cases.

Paying on time not a given

Many parties consider themselves able to pay received invoices more or less on time. A few respondents even indicated that all invoices are always paid on time. At the same time, it is striking that as many as 62% indicated that invoices are not always paid on time. When asked why not all invoices are paid on time, almost 70% indicated that approval takes too long. The remaining respondents give as their reason that there is still a lot of manual work, invoices get lost, are linked to the wrong people, or that a cash policy causes late payment.

The insight into outstanding invoices is certainly not lacking. Almost 90% of the respondents indicate that they have a good insight into them. And 78% of the respondents indicate that the data in the systems is also correct.

Other projects tend to be given priority

Although 36% of respondents indicated that the current software solution provides sufficient capabilities, nearly 80% of respondents plan to invest in the purchase-to-pay process over the next two years. The main reason for investing is efficiency (doing the same or more work with fewer people). This is mentioned by all respondents. Besides efficiency, getting indirect spend under control is the most important automation objective. So the will and need to invest is definitely there. A major challenge, however, is the fact that other projects tend to take priority.