Author: Pete Loughlin

I have sometimes described purchase to pay as sitting at the least glamorous end of the business spectrum. At one end is the sex, drug and rock 'n' roll world of PR, marketing and sales - life at the coal face where business really happens - and then at the other end there's the back office functions like purchasing, finance, internal audit. And if we take a closer look at the back office, sitting quietly right at the wrong end of the glamour spectrum is accounts payable. A colleague once described accounts payable as "the spinsters department". Jason Busch doesn't spare his vitriol in his criticism of AP suggesting that "most companies would likely be better off blowing up their AP function". To be fair he does suggest a more constructive fate for AP by describing how they might transform into a high value add supply chain finance operation - something I would strongly endorse. But for the time being, I want to defend AP. Why? Because much of the criticism is unfair and especially when it comes from purchasing.

Business travelers face a huge variance in the price they can expect to pay for a hotel room as prices increase by as much as 37% according to a new survey from Hogg Robinson and travel buyers need to make sure that policies are in line with reality. There's nothing worse for a business traveler than to have to comply with an out-of-date travel policy and it does nothing good for the reputation of purchasing when things go wrong. Travelers won't hesitate to complain if they have a rough time and they'll be very vocal if the travel policy is unrealistic.

There was an astrophysicist, a physicist and a mathematician on a train traveling from England to Scotland. They see a black sheep in a field as they cross the border. The astrophysicist says "all the sheep in Scotland are black". The physicist says "some of the sheep in Scotland are black". The mathematician says "At least one sheep in Scotland is black - on at least one side". Interpreting what we see on limited evidence is always a risky business so let's not get too concerned at Augusts PMI numbers.

One of the problems that the financial institutes have is that they don't want to get their hands dirty. Of course they recognise that e-invoicing is becoming a game changer but they've been reluctant to get too closely involved, preferring instead to sit on the sidelines and focus on the supply chain finance deals that are going to emerge as organisations and whole industries get smarter at the automation of their payables operations. This is a big mistake of course, the more the banks delay, the more ground that the supplier networks can gain and before you know it, they'll be adding clearing to their impressive range of service offerings. The e-invoicing tortoises may just steal a march on the banking hares.This is going to make the debate on e-invoicing chaired by Susie West such a draw at Sibos

There is a difficulty in building a business case for e-invoicing. The natural starting point is a traditional paper process and there is an irresistible temptation to begin to count the savings offered by the counting the cost of paper. A sheet of A4,  an envelope and a stamp. Well it's a starting point I suppose. And then there's the general efficiency saving because it's quicker and easier to deal with electronic invoices compared to paper. This is true of course but having 7 hours of work to do per day instead of 8 doesn't save anything. It just makes like easier. The fact is, if you approach electronic invoicing from the point of view of simply automating a paper process, then it won't save you a penny. So how do you go about building an effective business case for e-invoicing?