Earth Day 2021 takes place on April 22 and is a reminder of the importance of sustainability efforts. This year, as we enter the second year of operating under pandemic constraints, we see initiatives such as electronic invoicing and digital payments being adopted by the finance sector, which is one of the most paper-intensive business functions.
These initiatives are better for people and the planet, while also supporting the need for post-pandemic resilience and business continuity.
According to the Ardent Partners' State of ePayables 2020 Report, the biggest roadblocks to lowering processing costs and enhancing AP performance are paper-based invoices and payments requiring manual processing. This includes invoices received via mail, fax, PDF, and as attachments, all of which make up 49% of invoices received by the average enterprise today.
The firm goes on to illustrate the environmental impact of paper invoices, saying that for every 1 million invoices, 118 trees must be cut down, so for each billion invoices, that’s 118,000 trees! What’s more, for every million invoices, Ardent says 36 tons of carbon dioxide (CO2) footprint are generated.
The benefits of electronic invoicing and electronic payments go beyond the greening of AP; they also unleash newfound efficiencies. This “new normal” paradigm shift of paperless/touchless AP operations is also aligned with the needs of the socially distanced remote workplace.
With the onset of the COVID-19 pandemic, the remote workforce grew exponentially, and many organizations are opting to continue working remotely. Early on in the COVID-19 pandemic, the shift to the work-from-home workforce exposed “weaknesses of relying on checks and manual approvals, as well as the flaws of using tools lacking in important features that address the payments process,” according to recent research by
The use of AP automation solutions can reduce the number of steps it takes to process invoices. With cloud-based automation, data is shared instantly in real time where it can be accessed at any time and anywhere for the review and approval of concerned parties. Key data is organized in one place, saving managers the effort and time involved to search for paperwork. Companies save on mailing costs and reduce AP bottlenecks.
While AP automation is key to overall process efficiencies and cost savings, it should be noted that to underscore the commitment to greener AP, organizations need to stop suppliers from sending paper invoices right from the start. As a buyer/receiver of invoices, it’s paramount to have the technology in place to receive invoices electronically (pdf, xml, EDI, etc.) to not hinder this overall green value proposition.
While AP departments are employing automation to streamline invoice processing, they continue to face major inefficiencies in the area of payments — the “last mile” of the AP process —
as many companies continue to rely on costly and arduous paper check payments.
Electronic payment supports automation of payment approvals and payment of invoices electronically using ACH, payment card, electronic print check and wire. This automation delivers over $5 per payment by moving from paper-based payment processes to electronic payments for newfound cost savings and efficiencies, while mitigating payment risk.
Going green helps build corporate value today and helps build a greener tomorrow. And implementing strategic technologies such as electronic invoicing and electronic payments plays a significant role in this transformation, extending the benefits of AP automation.
