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Globys Research

A strategic perspective on invoice-to-cash

Globys Research 2017 Survey Results: The State of the Digital Invoicing Experience

Topics: Billing Experience, Customer Experience, E-Billing, E-Invoicing, Paperless Billing, Payments, Reporting and Analytics, Uncategorized

Although 92% of the 500 billions of invoices sent annually are still document based, customers’ attitudes have switched to demanding a truly “digital” invoicing experience. These customers want a digital invoice with data that is easily reported, analyzed, and processed according to their unique accounting needs. In other words, they want a personalized, digital invoicing experience to be able to pay “their” way. And beyond payment functionality, they want their digital invoicing experience to be dynamic and actionable, with functionality for inquiries, analysis, disputes, search, modifications and bill splitting—all from their invoice.

To gauge the extent to which digital transformation has truly impacted the B2B invoicing experience, Globys conducted a survey of suppliers in May 2017. The State of Digital Invoicing Experience Survey was designed to identify how extensive the digital transformation projects have been. Did digital transformation truly change the experience for customers? Or did it merely replicate the manual process to an online process?

The Globys Research 2017 demographics included the following:

— The respondents represented top brand names across the Telecommunications, Tech, Corporate Services, Construction, Utilities, Consulting, Consumer Goods, Insurance, and Travel industries.

— 62% came from North America, 31% from EMEA, and 7% from Asia Pacific.

— A variety of decision maker titles were involved, including the terms “Finance,” “Invoicing,” “CRM,” “Billing,” “Accounts Payable,” “Planning,” and “Purchasing.” The questions covered customer segments, invoice personalization, fragmented invoices, dynamic invoice abilities, and more.

 

THESE ARE THE RESULTS:

Question 1:  “What customer segments do you serve?”

The majority of the respondents served multiple customers segments with the largest majority serving enterprise. The enterprise segment has more complexity compared with small business or consumer. In the enterprise segment, the digital experience needs to support the accounts payable manager who may be processing hundreds or thousands of invoices on a monthly basis. This is in contrast to a small business owner who may process only one invoice per month from a supplier. The implication is that suppliers are having to produce not just one digital invoicing experience but three or even more if consumer is brought into scope.

CustomerSegmentsServed

Question 2:  “What can your customers do DIGITALLY with their invoice?”

A full digital invoicing experience lets customers pay, inquire, analyze, dispute, search, modify, and split an invoice, ideally according to their processing needs. The answer set to this question shows that invoicing has been left behind in the digital transformation. Outside of presentment, the key functions of pay, inquire, analyze, and dispute were top of the list, but as a percentage of penetration they were fairly low. Less than a third of digital invoicing experiences provided online payment for B2B invoices. Other features such as search, modify, and split were lacking. This highlights the slow evolution of the invoicing experience from paper to digital.

What Customers Can Do Digitally with In

Question 3:  “On a scale of 1-10, how personalized are your invoice experiences to individual customers? (1 is not personalized, 10 is very personalized)”

Personalization measures how customizable the digital experience is for the customer. Interestingly, the average of the responses showed a rating of 6 out of 10 for personalization. It shows a recognition by suppliers that they have made progress on empowering customers to process invoices, but that there is a significant amount of progress still to be made.

In an industry comparison, the technology vertical had the highest overall ranking. No surprises here—tech is pushing traditional billers to be more innovative across the board. Telecommunications, Insurance, and Utilities were at the opposite end of the spectrum. This illustrates how those specific segments have more complex invoicing requirements to be fully digitized. It also indicates these industries have the most potential impact on OPEX, CAPEX, DSOs & NPS improvements:

How Personalized are Invoices

Question 4:  “Do your individual customers receive more than one invoice per month from your company?”

The majority of suppliers are delivering multiple invoices per month without the ability for customers to define consolidation preferences to simplify processing.

The industry most frequently sending multiple invoices per month was telecommunications with 70% of invoicing still being multiples, rather than consolidated:

More than One Invoice Per MonthMore than one invoice Telecom

 

Question 5:

“If your customers receive more than one invoice per month, what is the reason why?”

As expected, the survey results showed the biggest reasons for sending multiple invoices were issuing an invoice for each individual order, and having multiple billing systems involved. In many cases, the billing function doesn’t have the data or business logic to automate consolidation for customers.

Reasons for Sending Multiple Invoices

Question 6:  “Which is the most important invoice-to-cash metric?”

Reducing DSO for throughput was top of mind for all industries, but the insufficient digital invoicing experience globally is making it hard to reduce DSOs. It also makes it hard to improve the next highest metric, “customer satisfaction,” as well as all the other critical metrics that improve the flow of business.

Most Important Metric

 

Overall, the 2017 survey results show a continued deficiency with many elements of invoicing, where multiple industries are playing catch-up to modern day functional models. Opportunities are being missed for customer satisfaction, profits, and cash flow across the board due to:

  • Antiquated document-based processes
  • Fragmented invoices
  • Lack of personalization
  • Limited functionality invoicing

The first real revolution was the ability to take the bill that the supplier provides and turn that bill into your bill, a bill that matches how you see your business and groups categorizes bill charges in an easy to understand way that maps to your organization and the departments within. The second revolution was the ability to harness the world of payments (checks, ACH, wire transfers, purchasing cards, other cards (Ghost, T&E, Fleet, etc.), single use cases and more) into a omni-channel payment automation where straight-through processing (STP) is both enabled and optimized.

The findings of this Globys Research survey were consistent with other industry surveys, such as the 2016 AFP/J.P. Morgan “Electronic Payments Survey,” which found deficiencies in Enterprise/B2B straight-through processing. STP is an initiative that financial departments within companies use to optimize the speed at which they process transactions. This is performed by allowing information that has been electronically entered to be transferred from one party to another in the settlement process without manually re-entering the same pieces of information repeatedly. In that survey, 53% of organizations do not use STP at all for payables, and 56 percent do not use STP for receivables.

An overall lack of invoice-to-cash automation continues to cost enterprises, in terms of both customer satisfaction and the bottom line. The good news is that forward-thinking organizations have a huge opportunity to improve business performance with better digital invoicing, by making payments easier, consolidating and personalizing data, and automating from end to end.

If there’s one thing that businesses with smart invoice-to-cash practices can teach us, it’s that when it comes to success, it’s all about the experience.