When a horse named Cloud Computing won this year’s Preakness Stakes, it created a groundswell of Twitter posts from technology executives. The upshot: cloud computing has arrived.
Now, that’s not exactly headline news. There’s no denying the momentum of cloud technology, especially as it relates to business commerce. In a digital economy, the ability to process orders, invoices, and payments at Internet speed presents a business advantage. But that sometimes gets lost in accounts payable, with the invoice.
For many organizations, the next step to invoice management is the scanning of paper invoices. But that takes a narrow view of the larger source-to-settle process that, when digitized, enables entirely new business potential. As one procurement executive put it, “From an efficiency standpoint, it makes more sense to push suppliers to e-invoicing, while simultaneously engaging sourcing on the front end in the negotiations and contracting process.”
When you combine cloud computing with a business network, you can link contracts, catalogs, and orders to an invoice, and let invoices process themselves. Here are just a few of the benefits from taking this approach:
- Generate invoices from purchase orders, contracts, and service entry sheets
- Eliminate invoice processing delays, and many invoice exceptions
- Improve compliance to preferred suppliers and negotiated prices
- Automatically apply key accounting information such as cost center and commodity codes
- Enable supplier self-service, with few calls about payment status
- Capture all early-payment discounts, and expand the program to new suppliers
- Collaborate with suppliers to better manage cash and working capital
At the same time, digitizing business commerce offers additional value that often gets overlooked. It promotes alignment between key stakeholders in procurement, finance, accounts payable, and treasury. It allows you to see the status of an order or invoice without calling a colleague. You can improve visibility into, and control over, your corporate spending. You can even make support for external audits a breeze.
Another way to assess the impact is this: the returns from automating the broader source-to-settle process are much greater than the sum of the parts.
For organizations that continue to hold on to largely manual, paper-based systems for managing business commerce, there’s a lesson to be learned from the finish of the Preakness Stakes. As one reporter put it, runner-up Classic Empire “couldn’t hold off a fresh horse like Cloud Computing.”
To learn about the value to cash management and working capital from cloud computing breakthroughs in accounts payable, read this complimentary eBook from the specialized treasury consulting firm Strategic Treasurer: Leading Practices for Treasury in the Financial Supply Chain.