The ‘VHS Tape’ of AP Processing

There was once a time when the VHS tape was the media of choice for watching movies at home. So much so that the technology has become permanently engrained in our lexicon with people still saying they will ‘tape’ something from TV rather than saying they will record something. But we all know how that story ends. VHS gave way briefly to DVD and BluRay, then the consumer movie market was swamped by streaming services and the video rental market died. It’s an oft heard anecdote about disruption that inspires companies to become the Netflix of their industry while also serving as a cautionary tale that they should avoid the fate of Blockbuster.

For part of my years as a tertiary student, I had a part time job in a video store. I remember how quickly the small shelf of new DVD titles turned into a whole aisle and then eventually became the primary format with VHS relegated to the back of the store. Today I see history in the throes of repeating itself in the business world when it comes to invoicing systems. Granted, invoicing isn’t nearly as attention grabbing as movies, and they are B2B rather than effecting consumers directly. Nevertheless, the rental movie industry has some lessons for accounts payable (AP) processes.

For years, the invoice document (the VHS tape of this analogy) was the way to transact with other businesses. The process was time consuming as it involved printed documents, envelopes and a lot of typing work. Then along came the affordable digital scanners and OCR solutions (DVDs) so that invoices could be digitised and the typing part was significantly minimised. From there the invoices became emailed PDF documents (BluRay) and the OCR results got better as the image quality was preserved and the scanning part all but vanished. This was further enhanced in more recent years by classification engines, Robotic Process Automation (RPA) and Machine Learning solutions (3D BluRay / Ultra4K).

But just as home movie audiences were constrained by buying or renting the physical tapes and disks, so too are AP Automation solutions constrained by necessity of the invoice document itself. With the exception of typically costly and fairly uncommon EDI solutions, AP Solutions are still entirely dependent on data extraction from an invoice document. That has now changed because Netflix (PEPPOL e-invoicing) has just been launched.

The PEPPOL e-invoicing network is now live in New Zealand, Australia and Singapore. PEPPOL is the Netflix that changes the AP Solution market. PEPPOL, empowered by the use of an NZBN / ABN, allows for transactional data to be sent from your finance system directly to the finance system of your customers. Similarly, your suppliers can send their transactional data straight from their system to yours as well. There is no longer a reliance on using PDF invoice document as the vehicle for communicating the transaction data. This means accuracy goes way up, speeds get faster, processing overheads plummet, payments happen quicker, and everybody is the better off for it.

The launch of PEPPOL has some implications not only for companies sending and receiving invoices, but also for the AP Automation Solution providers. For companies it means that for the cost of buying a DVD they can now subscribe to an online library of movies. Or to clarify this overstretched analogy, its means they don’t need to invest in, upgrade, or maintain their digital capture solutions for AP Invoices. (note: they could still be using such capture solutions for non-AP elements of their business). This means if you have an AP Capture element in your solution, there will come a time very soon when it will become your unused and dusty DVD player. It also means you should think carefully before ‘upgrading your DVD player to a BluRay player’ and investing more money in RPA, Machine Learning, AI, etc to enhance your AP Capture solution.

For the AP Solution providers the implications are potentially more dire. They need to rapidly incorporate PEPPOL into their workflow solutions in order to stay relevant. No-one wants to be the quiet store that no-one visits anymore and whose customers let their memberships expire. The messaging they have to the market needs to be one of enablement focusing on customer success, solution maximisation and innovation. Not one that tries to swim against the currents of change in an attempt to stave off the inevitability of progress. Providing a PEPPOL Access Point service as part of their core AP Solution will be essential in preserving the volumes that justify the very existence of the solutions the provide.

Finally, if I can offer one piece of advice to businesses it is this: If you are looking reviewing your AP Automation solution or evaluating the options for a new one, I encourage to ask your solutions partner about how they will provide PEPPOL Access Services. If the vendor you are talking with doesn’t have a plan, or worse doesn’t know what you are talking about, it’s probably best to find another solutions partner.

If you would like to know more about PEPPOL e-invoicing I invite you to get in touch with me.

Kris Elliott

Sales Manager (AUS/NZ) for Storecove