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Large organisations are notorious late payers. This is usually because their systems and processes let them down. As the company grows, accounts payable has to manage an increased volume of invoices and more complex invoice processing requirements – but often with the same resources.  

Investment is always hard to come by, especially in the back office. As a result, staff make do with ineffective manual workflows to get invoices through the system and paid as quickly as possible. But despite their efforts, payments are late, suppliers are disgruntled, discounts are missed, and duplicate or fraudulent payments are mistakenly made: the system no longer works.  

It’s time to invest

Thankfully, things are changing with investment finally coming the way of accounts payable. The government has introduced the Payment Times Reporting Scheme to address the negative effect long payment times and late payments have on suppliers. This scheme requires large organisations to publicly report on their payment times to small businesses, effectively forcing better performance in accounts payable.  

With the first reporting window beginning 1 July 2021, many large organisations are currently scrambling to upgrade their systems to capture the relevant data to report on their payment practices, while also looking at ways to get their payment times down. Organisations face steep penalties for failing to meet reporting deadlines, as well as brand damage should their payment record consistently exceed 30 days. For many, the best solution may be to automate accounts payable and adopt PEPPOL e-invoicing.  

Read more: Payment Times Reporting explained 

Faster payments, greater efficiency 

Automation provides a smooth and streamlined accounts payable while enforcing compliance protocols. Naturally, organisations need to decide the business rules for their solution; this includes setting the thresholds for straight-through processing, determining approval workflows, allocating financial delegations of authority, and deciding exception management responsibilities. Doing this work ensures a more efficient process from the outset. 

With business processes mapped, everyone knows what is expected of them and invoices no longer come to a standstill in approvals with nobody taking responsibility for them. Processing times are significantly reduced as timeframes are set for each accounts payable task. Therefore, invoices progress quickly through the approval workflow, with the end-to-end process usually taking just a few days. Accounts payable staff can then set the payment schedule to access early-bird discounts, optimise company cash flow, or use the full payment term.  

While accounts payable automation solutions dramatically cut processing times and costs, many are also being upgraded to facilitate Payment Times Reporting. Solutions may be able to capture when invoices are received and paid for particular suppliers and generate reports as per the regulatory requirements. This additional functionality makes compliance easier, while also saving significant manual effort and ensuring data accuracy. In doing so, it gives additional weight to the business case for accounts payable automation. 

More than Payment Times Reporting

Automation supports compliance in other ways too: In centralising and digitising accounts payable, the invoice payment process becomes transparent and easily auditable. The solution retains every invoice, so all historic payment information can be retrieved at the click of a button. It also logs a digital record of every interaction with an invoice, providing a full and identifiable audit trail that helps deter any compliance breaches.  

An accounts payable automation solution also protects against fraudulent invoices and duplicate payments. Organisations that have not automated their payment processes need to manually check this information. As switching between systems and websites can be cumbersome and time consuming for staff, these safeguards may not happen as a matter of course. This may especially be the case if the workload is heavy, or the accounts payable team is understaffed.  

An automated solution is programmed to perform the following data validation steps for each incoming invoice: 

  • Check for any duplicate invoices already in the system  
  • Confirm the vendor’s Australian Business Number is legitimate 
  • Validate the vendor is registered for GST if it’s included on the invoice 
  • Ensure that the payment details match what is held in the supplier master data 
  • Match the invoice to the relevant purchase order in the system, if applicable. 

If any discrepancies are found, the solution alerts the accounts payable team to investigate and resolve before the payment can progress through the workflow. 

Further efficiency with PEPPOL e-invoicing

Transitioning to PEPPOL e-invoicing – the digital exchange of invoices between a seller and buyer’s finance system – makes the process even more efficient and secure. All trading partners need to be registered and authenticated on the PEPPOL network before they can transact, which ensures data comes from legitimate businesses.  

With invoice information exchanged in a structured format, there is significantly less data validation work required. And with data sent directly to the system, a higher rate of straight-through processing can be achieved. This lightens the load for accounts payable, enabling faster processing times for other payments. Digitising accounts payable enables data to be generated and reports to be run, providing organisations better visibility and control over their payments. 

Organisations can connect to PEPPOL via an accounts payable automation solution. The benefit of doing this is that the same business rules and approval workflows can apply to traditional invoices as well as PEPPOL e-invoices. This means that organisations will not have to maintain inefficient manual processes for their paper or PDF invoices, alongside new protocols for e-invoices. 

Read more: Guide to PEPPOL e-invoicing Australia 

In conclusion

Change is long overdue in accounts payable and will have a widespread, positive effect on business. Automation may enable large organisations to better meet the compliance requirements of Payment Times Reporting, as well as community expectations around their payment performance.  

A solution that is PEPPOL-enabled also facilitates a gradual changeover to e-invoicing. By capturing non-PEPPOL invoices alongside e-invoices, the solution supports suppliers as they progressively transition to a new way of operating. With automation reducing processing times and costs while enforcing stronger governance and compliance, its value is too great for large organisations to overlook. 

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