The mystery of the missing invoices and why it doesn’t bode well for e-invoicing

Posted by Pete Loughlin in AP Automation, e-invoicing, Electronic Invoicing 05 May 2016

Here’s a thing. A thing I’ve seen more than once. It’s all about invoice that disappear into the ether with no explanation. This is bad news because the invoices will inevitably be paid late. But as we’ll see, once the mystery of where they went is resolved, it’s worse than you thought.

As usual, the guilty parties shall remain anonymous as will the victims of this particular problem. I saw this recently and was able to quickly get to the bottom of the problem because I’d seen the problems before.

Site LogoThe first thing that happens is that an important strategic supplier complains about late payment of invoices. Accounts payable ask for copy invoices because they can’t put their hands to the original. All is in order, and the invoice is paid. But shortly thereafter more complaints come through and accounts payable begin to get embarrassed – they can’t find these invoices either. A pattern starts to emerge. It looks like the supplier is complaining about non-payment of invoices that they haven’t actually sent – or perhaps sent to the wrong address.

But the supplier is adamant. They have the right address – some invoices are arriving and being paid and they can see that the mystery invoices were definitely sent to the same address. Perhaps someone in the post room is ‘losing’ the invoices.

Losing invoices is highly unlikely. If that were the case, there would other suppliers having the same problem. This problem is unique to this supplier. If the supplier investigated, perhaps they’d find the same situation with other customers.

And so it goes on. The supplier adamant that their processes are fine and the customer equally certain that the error can’t be at their end.

So what is going on?

Take a close look at the end to end process and what you might find is that, like many organisations, the supplier uses an automated mailroom and not only that, they outsource it. When they say that they are sure that invoices have been sent what they actually mean is that they are sure that these invoices were included in the print file sent to the outsourced mailroom. It is a fairly rare event but that file can get corrupted or suffer some other mishap such that the invoices don’t get printed and mailed. Rare yes – but not so rare that I’ve not come across this issue a couple of times in the last two.

The good news is that we found the problem and it’s easy to fix as well as monitor going forward. The bad news is what happens when we say to the supplier – “Send the invoices to us electronically”. Sounds simple but that is far from the case. Just as turkeys don’t vote for Christmas, neither do outsourced mail rooms vote for e-invoicing. If a business had made a strategic decision to go paperless – not by going digital but by outsourcing their paper processes, they’re probably locked into a long term contract that perpetuates paper processes. That’s bad news for e-invoicing and for some businesses, bad news for hopes of fully automating accounts payable any time soon.

Pete Loughlin can be found on twitter @peteloughlin

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