Post the coronavirus pandemic, globally, there is a growing focus on improving sustainability. Adoption of new technologies like AI, Data Analytics and RPA (robotic process automation) means that the focus is no longer just about being digital, but rather better equipping internal business processes to survive challenging situations like this in the future.

Yasser Ali, Sales Director for Pagero Middle East, looks at how GCC countries are implementing digital initiatives to build a smarter economy in an effort to close the VAT gap, as well as four key reasons why organizations should consider a paperless strategy.

GCC goes digital

Paperless strategies are already in action across the GCC. Committed to delivering its last paper transaction in 2021, the Smart Dubai paperless initiative has been implemented by the government in a major step towards making Dubai a smart city of the future. Smart Dubai is well into its second phase: organizations like Dubai Electricity and Water Authority, Dubai Land Department, Roads, and Transport Authority and Department of Tourism and Commerce Marketing have now become completely paperless. With 100 percent of internal processes scheduled to be digitalized from 2021, initiatives such as electronic invoicing (e-invoicing) will soon become an integral part of the digital transformation journey.

Saudi Arabia generates over 15 million tons of solid waste each year, with paper making up almost 29 percent. To tackle this, the Saudi Ministry of Justice took the first step last year with the paperless courts initiative to increase efficiency and reduce paper waste. Now 72 percent of ministries are paperless in KSA, with initiatives in place for all ministries to go paperless by 2023. More recently, Kuwait’s Government, in response to counter the effects of Covid19, announced that Kuwait Municipality would be going paperless by introducing e-correspondence with Government agencies as part of the precautions to fight the virus.

Four reasons to go paperless

Gartner’s 10 IT Cost Optimization Techniques for Private and Public Sector Organisations report highlighted that the implementation of shared services, standardized applications and optimization of the workforce to streamline costs should be explored by CIOs. One initiative which aligns with a paperless, cost-effective strategy would be to automate the Accounts Payable process – particularly the automation of supplier invoicing through e-invoicing.

Millions of invoices are sent and received globally each year, and the number of invoices sent is forecasted to quadruple by 2025. Whilst necessary for profit and growth, the invoicing process takes time and resources. Given the current state of the economy post-pandemic, organizations now need to maximize as much of their limited resources as possible.

With this in mind, let’s highlight the benefits of adopting a completely automated supplier invoice process:

1. Significant labor savings: Huge financial gains and decreased labor costs can be achieved by streamlining the supplier invoicing process. Manual tasks like downloading PDF attachments, scanning documents, manually keying in data or coding invoice information, searching for lost data, reconciling supplier and PO information, and much more are some of the biggest contributors to high accounts payable (AP) processing costs. Up to 80 percent of these costs can be saved when adopting software that streamlines invoicing processing (Billentis 2019). Automating the entire AP process journey, therefore, means achieving huge cost savings and processing data quickly and automatically.
2. Increased productivity: Without an automated AP process, 84 percent of staff time is spent on transaction processing, leaving only 16% for value-added activities (Ardent Partners, 2020). Adopting technology to automate the supplier invoice flow means the amount of human time to process an invoice is reduced substantially. Increasing the overall productivity of staff, more time can be devoted to further enriching tasks such as ensuring contract compliance, mitigating compliance issues, rationalizing supplier spend, and managing cash flows and budgets.
3. Faster cycle times: Ardent Partners reports that the average time to process an invoice is 8.3 days based on the fact that approximately 75 percent of the suppliers still submit invoices on paper. This explains why only 4 percent of businesses pay their invoices on time. Slow cycle times can have an adverse effect on business and unplanned cash flows while invoices with inaccurate data delay further processing. This means using more human resources and time and often affects the relationship with vendors which may cause you to miss out on early-pay discounts. Automating the AP process allows you to achieve quicker cycle times and accurate processing of data.
4. Fewer errors: An automated AP process helps eliminate payment errors because:
   1. Invoice headers and line-item data is captured without manually keying, ensuring data accuracy; and
   2. Invoice data is validated against ERP information early in the AP process, quickly calling out duplicate payments Data accuracy is vital. With a completely automated system, all the relevant data points are validated against supporting documents such as POs and delivery notes. This results in a seamless flow of accurate data into the ERP system, meaning fewer payment errors as invoice duplication and data validation/manual errors are avoided.

Automating your supplier invoice process is huge step in the right direction on the journey to digitalisation. Working in line with government initiatives to reduce waste and create efficient processes, organisations in the Middle East can benefit from the value that supplier automation through electronic invoicing.

Find out more about how Pagero customer, ABB, streamlined their AP process. If you would like to discuss how businesses can start automating their AP processes, get in touch directly with Yasser on yasser.ali@pagero.com or get started for free today.