Accounting in today’s multi-site organizations is not for the faint of heart. Each day AP departments are managing hundreds of payables to ensure that the right people get paid at the right time, without the company incurring extra charges or hidden fees.
While it may seem that paying energy, telecom, water and waste invoices is fairly straightforward (your company incurs charges and the AP department pays them), the truth is that these invoices are more complex than they may appear. There is a huge, missed opportunity to uncover billing errors, extract site anomalies and gain insight into opportunities for optimization, but only if your AP staff has the expertise, time and technology.
Here are just a few complexities of your energy, waste, water and telecommunications invoices:
- Data format: No two invoices are the same. Did you know that there are more than 24,200 vendors in the Ecova vendor database? And that’s just North America! Each of these vendors has their own method of formatting and sharing data, making it a challenge for AP departments to capture and audit it in a consistent format. Multi-site companies receive thousands of invoices each month with variable formats.
- Frequency and variability: Invoices may be received upon use, monthly, quarterly or annually with either fixed or variable price points. Frequent invoices with a lot of variability in the usage charges or extra fees buried in the detail are the most complex and thus invite higher error rates that are easy to miss in a audit.
- Expense expertise: Some invoices are pretty basic – you don’t need a lot of industry expertise to process a simple pest control or landscaping bill. But when you get to bills like energy, water or telecom, understanding the terminology or acronyms and charge details can be overwhelming, so it can be easy to overlook errors or violations in your terms of service that can be costing your company money.
- Due dates: Time is not on your side when it comes to processing utility invoices. On average, it takes companies between 17-29 days to process a single invoice, but the average time a utility gives you to pay an invoice is 21 days[i]. That leaves little time to actually pay the invoice, much less extract and analyze data for savings opportunities.
The bright side of these complex bills is that they offer the greatest opportunities for savings – IF you have the expertise and time to audit your invoices. For example, waste Invoices are riddled with extra trip charges, duplicate charges, fuel charges and other stray fees. Some municipalities set mandates on waste disposal to increase recycling and composting, but many companies may be unaware without collecting and analyzing data.
As I’ve written about before in my previous blog post, “Should We Fear the Invasion of AP Robots?”, you probably hear a lot about automated processes that help “streamline” the workforce and control company costs. These automated tasks are not just present in the blue-collar world of manufacturing. Robotic software automation is now critical to finance and AP departments across companies of every size. Automation helps simplify the complexity of invoice processing, particularly in the areas that have repeatable, predictable processes. Software can help your staff collect more data, normalize the data, improve data quality, and allow more time for audits that will uncover efficiency gains and savings.
September 22, 2016, I’ll be teaming up with CFO for the webcast, “Benefits of Outsourcing Complex Invoice Management”. I invite you to join us to learn more about the complexities of energy, telecom, water and waste invoices—and the benefits of outsourcing these payables.
Click here for more information and to register. Whether you’re a company looking to increase your expertise in data collection and auditing—or looking for resources to assist with the process—we think you’ll find this presentation valuable.
[i] Ecova Data