Implementing supplier invoice automation can bring numerous benefits to a business, including increased efficiency, reduced errors, and cost savings. However, there are also several reasons why a company might decide not to implement this technology.
Reason 1: High Initial Setup Costs
One of the most significant barriers to implementing supplier invoice automation is the initial cost. This often involves purchasing software, integrating it with existing systems, and training staff. For small businesses or those operating on tight budgets, these costs can be prohibitive.
Furthermore, if your business deals with a low volume of invoices, the return on investment might not justify the initial expenditure.
Counter Argument for Reason 1
This is really an argument based on how technology used to be. Saas (Software as a Service) solutions tend not to have high up-front costs. There are often some costs that are paid up-front but not on the scale of the up-front costs of traditional software solutions.
If there isa a low volume of invoices, there is generally not a reasonable return on investment for automating supplier invoice processing.
Complexity in Integration and Maintenance
Another challenge is the complexity involved in integrating a new system with existing processes. Every business has unique systems and processes. Ensuring that the new automation software works seamlessly with these can be a daunting task.
There’s also the issue of maintenance and updates. Automated systems require regular updates and maintenance, which can demand new time and resource commitments. For some businesses, especially those without a dedicated IT team, this can be a significant drawback.
Counter Argument for Reason 2
Implementing a new solution offers a perfect opportunity to review and revise current processes and practices. Just because things have always been done a certain way does not mean that they cannot be streamlined and improved.
While traditionally software has been sold on the basis that it will adapt to custom business practices, in reality it is often the case that businesses need to adopt the best practices that have previously been implemented into a software solution.
SaaS solutions solve the issues of maintenance and updates as this is managed by the solution provider.
Potential Loss of Personal Touch
Automating supplier invoices can lead to a reduction in direct communication with suppliers. This loss of personal touch can be detrimental in businesses where building strong, personal relationships with suppliers is crucial.
In industries where negotiation and personal rapport play a key role in procurement, automation might inadvertently weaken these valuable relationships.
Counter Argument for Reason 3
Supplier Invoice Automation allows for deeper and more meaningful communications with suppliers. After all, do you have a valuable relationship with suppliers if you are constantly contact them about queries on their invoices, or if they are contacting you to check on the progress of their invoice towards payment?
This was brought home to me a few years ago in a meeting I had with a client in Canada. I asked for feedback on their implementation of the OnePosting solution for Supplier Invoice Automation and they expressed how it had streamlined their operations.
However, what surprised me was what she said about one of their suppliers. She said that she hadn’t spoken to them for several months since OnePosting was implemented.
I asked if this was unusual, and she explained that the supplier used to call her 2 to 3 times per day checking to see if invoices been received and were approved for payment.
Our client then set a reminder to contact the supplier.
Imagine how different the conversation with the supplier was going to be. Instead of dealing with transaction queries, they were going to have a higher quality conversation that could lead to more positive outcomes for both parties.
Supplier Invoice Automation offers many benefits including efficiency and accuracy but as outlined above, reasons can be advanced as to why it shouldn’t be implemented.
However, they don’t stand up to serious scrutiny apart from the one about low volumes of monthly supplier invoices (typically less than 100) where the value of supplier invoice automation is questionable.