Easing The Paper-To-Digital Transition In Procurement

Full adoption of electronic invoicing is inevitable, but it’s not going to happen overnight. As Michael Weiss, Vice President of Software Engineering at Oildex — which acquired OpenInvoice a couple of months ago — recently explained to PYMNTS, it’s probably best for everyone involved if the transition is a gradual one. He talked through the steps through which businesses that might be reluctant to quit paper cold turkey can enter the digital age.

Let’s start with a very big question in the procurement space: Why is there still a delay for some businesses, even now in the digital age, to move away from paper invoicing? What’s it going to take for faster and wider adoption of the digital format?

MW: That is a popular question — even in a lot of spaces outside of procurement.

It’s a cultural issue. People have been working with paper for so long that it’s ingrained in the muscle memory. Unless there’s a really compelling event, people are not going to make the transition until they are completely comfortable with it.

That being said, as the millennial generation takes a greater hold of the workforce over time, I think the change from paper to digital will happen more quickly.

Beyond the generational difference, is the hesitation to move to e-invoicing more on the supplier side or on the buyer side — or do you think it’s equal?

MW: It’s probably more on the supplier side. I think dollars definitely come into play, there, in instances where suppliers are charged additional fees for electronic invoicing.

There are a number of suppliers out there servicing any one customer, and they do tend to weigh down the equation. If a customer does charge its suppliers, that can obviously cause a delay in adoption.

Since paper is not yet completely going away, how can that method of procurement improve — short of moving to digital?

MW: Because there are so many components to the supply chain, businesses can slowly start to introduce a digital solution or an automated work flow, to automate the supply chain with paper, and then slowly replace the pieces.

If a supplier has to have that piece of paper, there are a number of ways in which that paper can get to the person paying the bill, and a number of things that can happen in terms of transmitting the data in question. Once that data has reached the supplier, that’s when you more commonly see issues — rather than when it’s being handled by the operator who’s taking in the data.

It can still be done; it’s a matter of standards and agreements and communication between the buyer and the supplier.

Obviously, something that’s going to slow down a procurement transaction is bad information or missing information on an invoice — and that’s an issue that doesn’t always get resolved smoothly.

In your opinion, what’s the worst way to handle it, on both the buyer and the supplier side? By contrast, what’s the best way to work toward a quick resolution?

MW: Bad information is certainly more of an issue than missing information. In the latter case, you’re at least left with a clear question of what needs to be addressed.

Bad information, by contrast, can be hidden. It can sometimes be difficult to find — for both the buyer and the supplier. Unless you have a system in place that can help you understand exactly what you bought, what you expected to get, and what you got, that is probably one of the worst things that can happen.

The best invoicing solution is one that helps both buyers and suppliers recognize issues even before anything gets exchanged or submitted.

How should a procurement solution facilitate connectivity between a buyer and a supplier that use different methods (i.e., paper vs. digital)?

MW: Once again, standards come into play. As technology improves, so does the communication.

We just rolled out some new software that enables users to take digital pictures and submit those as invoices; I know the banks have been doing that for quite some time, in the realm of mobile deposit. That’s one example of a stopgap measure that allows a buyer or a supplier to still have their paper records if it’s important to them, while also getting those into the digital stream as quickly as possible.

How is the acquisition by Oildex going to affect OpenInvoice? What will change in their business?

MW: We just hit our two-month mark since acquiring OpenInvoice, and it’s going great.

I’ve been through this type of situation a number of times before, and there’s a lot of similarities in the culture of the business and in what each of us do. The people are great, and I think everyone’s aligning well.

We’ve recently gone through and done seem gap analysis to understand some differences in products, and what we believe will be the best product coming out a reconcile those offerings.

What’s next for the company?

MW: Oildex has a number of products, and we continue to stick to our original product commitments, timelines, and our roadmap. With the addition of the OpenInvoice product, and as we marry it with the Spendworks product, we’re pleased to say that we will have a great product that will provide additional functionality to all users.

We plan on having the same sort of cadence in our releases over time. We just had a couple last month; our next one is scheduled for November. We look to have the same sort of pace that we’ve had in the past.

The beauty is that now with a larger and stronger organization, we believe that we can get more features and functions delivered more quickly to customers.