This particular organisation started to think about invoice automation approximately 10 years ago, when EDI (Electronic Data Interchange) invoices were taken into use in the retail sector. Then the calculated return on investment (ROI) was negative and the project was suspended. The next attempt caused difficulties in implementation of matching of EDI invoices based on in-house developed functions in the ERP system. 2013 was the year when the third attempt to automate invoices in P2P process was made. The company has chosen in-house solution and the implementation project supported by OpusCapita will go on for 4 to 6 months.
The first reason for this was very significant change in Polish VAT regulations thanks to which paper and electronic invoice can be handled in one business process in the company. Also the regulations about correction of the invoice simplified the process and the data, which must be sent between the parties to correct the invoice. Thanks to these legal regulations the ROI of invoice automation implementation could be positive and the investment returns after 1.5 to 2 years.
Invoice automation for security reasons
One of the biggest reasons for invoice automation was security:
- Invoice automation helps to ensure that the bank account to which the payment has to be transferred is correct. In Poland the bank account is defined in the contract, but also is shown in the invoice. In such case the bank account from invoice is valid. However, it could be that either the number has been changed on one of the invoices because of fraud or the company has changed their account. Manual checking of the 24-digit account numbers on hundreds of invoices is very difficult and time consuming.
- The second reason for automation is to reduce human errors and thanks to this the records in books are exactly the same as in the source documents. In the manual process the company has 2-3% of incorrect records in the books.
- Automation helps bookkeepers to eliminate manual data entering from the source documents. The calculations show the work saving in the AP department on the level of 40%.The workers could concentrate on controlling functions for correct posting instead.
- Fourth reason to start the invoice automation process is to create one centralized point of invoice receiving.
After feasibility study the company came to the conclusion that the greatest added value beside the ROI will be steady control of invoice data against the master data stored in company’s ERP system on very high quality level. The ROI could be much higher, when there would be no legal duty (based on Polish bookkeeping legal act to store the origin version of the financial document). This means that when receiving electronic document as original, one digital version is sufficient for fiscal authorities, but in case of paper document, even when scanning, the paper versions have to be archived as well.
As threats for common implementation of invoice automation in P2P process there could be the mentality of Polish managers in AP departments. The second one could be the uncertainty how Polish courts will treat the electronic copy of the invoice during litigation between buyer and seller.
Despite the fears and peoples’ mentality the pressure of cost reduction and efficiency hopefully will speed up the invoice automation projects in companies with Polish ownership.
Economic success in Poland
When much of Europe still struggles to recover from the impact of the 2008 financial crisis, Poland stands out as an “island of economic success” – a place where companies and individuals are witnessing growth rather than decline. In 2009, when the gross domestic product of the European Union contracted by 4.5 percent, Poland was the only country in the EU seeing its economy growing by 1.6 percent. The EU economy as a whole remains smaller than it was at the beginning of 2009 and isn’t expected to recover its losses until the end of next year. In that same period, Poland is projected to enjoy a cumulative growth of more than 16 percent.
During past 20+ years, Poland has experienced an enormous economic growth. It started with foreign investments, but now there are also more and more companies with Polish original capital, who have started the international expansion or are very strong on the domestic market. To these enterprises belong such companies like IT blue chips Assecco, Comarch and PLUS mobile telephony, fashion company LPP with Reserved and House brands. Also old Polish companies like KGHM Polish copper mining corporation, ORLEN with oil processing and petrol stations started very intensive international expansion. Piotr i Pawel Polish private retail chain competes with success in Poland with global leaders like Tesco, Auchan and INGLOT cosmetics with very well-known global brands.
The first stage of company development, when managers viewed their companies from functional perspective has come to an end. However, as in the good economic environment the competition is also much more intense, the managers are still forced to cut costs and this helps to change their perspective to functional again.
Invoice automation is much clearer from the process perspective. So change of viewpoint of Polish companies is the first reason to start offering the invoice automation solutions in Poland.