Checklist for invoice compliance in procure-to-pay processes

No matter the size of a company or if it operates locally or internationally, it needs to automate the procure-to-pay (P2P) processes, especially when it comes to invoicing and data compliance. For businesses that fail to do this, the results are mountains of paperwork, lost documents and endless mistakes in orders. Understanding the challenges that exist within the P2P process and how to overcome them can help companies grow.

In order to gain comprehensive insight about invoice compliance within the biggest organisations, Comarch asked them to complete a survey about the problems they face daily and their plans for the future. With our partner Sharedserviceslink, we talked to P2P and finance professionals working for healthcare, finance, retail, food, fashion, transport and banking companies around the world. The majority of respondents (80%) represented fairly large companies, with an annual invoice volume exceeding 100, 000 documents. As far as location was concerned, 58% of the responding organisations were based in Europe, and 31% in North America.

The variety of industries and geographical locations, and the amount of processed invoices, gave us a quality insight and better understanding of the biggest challenges in the areas of invoicing processes, content, archiving, and protection of sensitive data. At the same time, we have learned that P2P automation can really help companies to improve invoice compliance.

Legal compliance

Electronic invoices (e-invoices) are the modern version of the paper documentation. Instead of piling invoices up in countless folders, it is much easier to handle and archive them on digital platforms. E-invoicing saves time and money, and limits human error.
Generally speaking, e-invoicing is regulated under two models worldwide. The first one is the post-audit model, present in the US, Australia, and most of Europe. In this model, issuers of invoices send their documents directly to the recipients. The second group is the clearance model used by Russia, South America and Turkey. Files cannot be sent directly to the recipient, but must be verified and authorised by the appropriate ministry, which varies depending on the country. The survey showed that both of the legal models give rise to similar problems.

Furthermore, it is important to mention data security. All data must be stored and archived safely, in a manner allowing swift retrieval. On top of that, the new European Union General Data Protection Regulation (GDPR) will come into force on the 25th of May 2018, and companies which collect and process personal data of EU citizens must adjust their operations to comply with this new law.

E-invoicing compliance challenges

When asked about the biggest invoicing compliance challenges in everyday work, more than half of the companies who took part in the survey highlighted ensuring tax/VAT compliance (63%) and the integrity of invoice content (54%). It is worth mentioning that failure to comply with formalities related to taxes or VAT settlements, or incorrect VAT settlements, may result in additional costs for an enterprise and create the risk of liability for those responsible for tax settlements. What is more, one in five companies reported many problems with archiving rules (22%) and protection of sensitive data (21%). In the event of a security breach, losing a company’s archive of crucial data (e.g. customers’ personal information) may result not only in fines, but also in serious loss of reputation and trust.

What are your major compliance challenges when it comes to invoicing?

Multichannel invoicing

The majority of our respondents admitted that they receive most of their invoices in paper format/scanned (77%) or manually entered email/PDF (68%). Taking into consideration the number of invoices (from 100 000 up to 1.5 million annually), this implies a massive workload for employees and increases the possibility of errors significantly. Manual invoicing makes compliance much more difficult and there is certainly room for improvement in this area.

How are invoices arriving at your organisation?

When asked about future improvements, P2P automation was by far the main way in which companies were looking to upgrade their processes (65%) and standardize them globally (46%). The demand for P2P automation is so high that 88% of respondents declared that they are interested in improving P2P automation, regardless of the current level of automated processes.

What are the main priorities, as far as P2P processes are concerned, and what are the best P2P practices? What are the most popular types of P2P automation?

The answers to those questions can be found in our extended white paper, which provides important information for a better understanding of P2P automation and invoice compliance. Moreover, it includes best policies and procedures, which - if applied correctly - will save time, increase income, educate employees and reduce costly (yet avoidable) mistakes within the P2P processes.

About Bartlomiej Wójtowicz

He has over 10 years of experience in the field of B2B communication in the supply chain. Initially responsible for the e-Invoicing market development in Southern and Central Europe, he is currently responsible for the development of Comarch E-INVOICING portfolio.

About Comarch e-Invoicing

Founded in 1993, Comarch has more than 20 years of experience in designing, implementing and integrating IT solutions for enterprises in a variety of industries, including retail, consumer goods, DIY, logistics, manufacturing, pharmaceuticals, and oil and gas. Solutions for data exchange and document management are dedicated to master data management, e-procurement, e-invoicing and AP/AR processes. Moreover, the offer comprises a B2B2G network that guarantees secure and reliable data transmission with more than 100 000 entities worldwide in a short time. Comarch is cooperating with leading companies such as Metro Systems, Carrefour, Leroy Merlin, BP, BIC, Unilever, Rossmann, Valeant, Valeo, and Technicolor. With thousands of successfully completed projects, 15 data center locations and more than 80 offices in 30-plus countries, Comarch has the support and infrastructure necessary for high-volume rollouts.

This editorial was first published in our B2B Fintech: Payments, Supply Chain Finance & E-invoicing Guide 2018. The Guide gathers leading solution providers, consultants, associations, banks and corporates that share their latest insights, technologies and best practices in B2B payments, real-time fraud prevention, instant payments business opportunities, e-invoicing and supply chain finance.