Six Years Ago we pointed out that:
- You’re probably overpaying your suppliers by 1%
- There’s a 2 in 3 chance you’re being defrauded of 2% of your revenue
- Up to 75% of your AP overhead is completely wasted
- At least 1 in 10 invoices are erroneous
- One Million Invoices requires at least 100 standard 4-drawer filing cabinets
But things aren’t much better.
- PRGX and other leading recovery firms still recover 0.3% of total spend on average which means the over-payment average is still the same using the rule of thirds (1/3 not recoverable because contracts expired, 1/3 goes to the audit firm in fee based recover, 1/3 goes to you)
- PwCs recent Public Procurement:: Costs We Pay for Corruption, average loss to fraud is 3.5%, with a UK average of 4.76% … and while private companies might think they are better off, the cyber crime economy keeps reaching record highs (and is 1.5 Trillion in the US alone) and private fraud losses in the UK almost equal public fraud losses according to a CIPS study
- Based upon recent data from the 2019 Payables Friction Index, a good portion of your AP overhead is completely wasted
- The number of erroneous invoices hasn’t decreased
Furthermore, according to the 2019 Payables Friction Index, in collaboration with Corcentric, PYMNTS surveyed 2,570 firms on AP processes and found the following:
- Paper Still Dominates
- 81% of firms still use paper checks to pay invoices
- 45% of firms still use cash
- e-Cash is still in the minority
With the exception of ACH, that has finally penetrated more than half at 62%, all other methods (including credit cards / p-cards) are still less than 50%!
- e-Invoices are increasing
but up to 34% of invoices are still paper (in organizations under 100M in particular)
- OCR, on average, is still under 50%
(as low as 37% in organizations under 10M) and, more importantly,
- utilization of basic automation, ML, and/or AI is even less
when modern RPA + ML systems exist that can automate e-Invoice processing through simple rules, m-way checks, bounce backs for correction, completion, and verification, to 98% … and
- approval times of one or more weeks averaged between 16% and 45% across respondents, depending on the number of approvers needed and organization size … when the majority of invoices should be auto-processed and auto-approved …
In other words,
- You’re losing money on overhead,
- You’re losing money on early payment opportunities,
- You’re losing money on over billings and duplicate billings, and
- You’re losing money on fraud …
- … when the majority of this loss is easily preventable!
So why not get a modern e-Invoicing solution, standalone or part of a S2P platform, and stem the bleeding and use that money to hire more A-class talent to identify long-term strategic savings build on a supply resilience strategy?