The Challenges of Processing Invoices with a P2P Supplier Network & How to Solve Them

Many accounts payable (AP) departments that invest in procure-to-pay (P2P) supplier networks expect a seamless, fully automated invoice process. However, more often than not, the outcome is usually a cycle of manual workarounds.

AP teams find themselves scrambling to fill the gaps left by invoices arriving outside the network, slow supplier adoption of electronic invoicing, and missing key capabilities like three-way matching. These issues lead to even more – from delays to errors to rising costs.

If your AP department is frustrated that your P2P network hasn’t delivered the full benefits of automation, you’re not alone. The reality is that P2P networks – while valuable – are just part of the solution. In fact, experts found that 74% of accounts payable teams have only partially automated invoice processing.

Let’s dive into why P2P networks alone can’t deliver fully automated invoice processing and what the other part of the solution is.

What Are P2P Supplier Networks & How Do They Work?

Before we can explore the challenges of processing invoices with P2P supplier networks alone, we need to ensure we have a clear understanding of what these networks are and how they function.

P2P supplier networks enable buyers and suppliers to manage procurement, invoicing, and payments electronically. These networks aim to eliminate paper-based invoices by allowing suppliers to submit invoices directly through a portal, electronic data interchange (EDI), or another digital format.

Once an invoice is submitted, the P2P supplier network validates it before posting it to the buyer’s enterprise resource planning (ERP) or accounting system. By streamlining the receipt and processing of supplier invoices, P2P supplier networks deliver significant advantages, including:

• Improved supplier collaboration & transparency: Suppliers gain visibility into invoice statuses, reducing inquiries and disputes. With real-time access to invoice processing updates, suppliers can proactively address discrepancies and prevent payment delays.
• Reduced manual invoice handling: Automation minimizes the need for data entry, expediting processing times. By removing human intervention from the invoice process, organizations can decrease errors, reduce approval bottlenecks, and improve efficiency.
• Stronger compliance & controls: Built-in validation rules help enforce company policies and prevent errors. Automated validation ensures that invoices meet contractual and regulatory requirements before they’re processed, minimizing the risk of fraud and non-compliance penalties. Not to mention, audit trails and digital approvals provide greater transparency, making it easier to track invoice histories and demonstrate compliance during audits.
• Increased cost savings: By eliminating paper invoices and manual processes, buyers reduce administrative costs. With fewer resources required for invoice processing, AP departments can reallocate staff to higher-value tasks, improving productivity and, in turn, reducing overhead expenses.

Top 3 Challenges of Processing Invoices with a P2P Supplier Network

Despite the advantages they offer, P2P supplier networks have limitations that can prevent organizations from realizing the full potential of accounts payable automation. Common challenges include:

Slow Supplier Adoption of Electronic Invoicing

Convincing all suppliers to submit invoices electronically can be an uphill battle. Many small and mid-sized suppliers lack the technology or resources to integrate with a P2P network. Additionally, some suppliers resist the idea of being forced to use an online portal or EDI, viewing it as an additional burden that complicates their invoicing processes. The longer it takes to transition suppliers to electronic invoicing, the longer AP teams are left managing a mix of digital and non-digital invoices.

Invoices Arriving Outside the Network

Many suppliers continue to submit invoices via email, mail, and fax because they cannot or do not want to use the network. AP teams must manually enter these invoices into the system, negating the efficiency gains they expected from automation. Supplier invoices arriving outside the P2P network also create workflow inconsistencies, leading to processing delays and errors while opening the door to audit issues.

Limited Invoice Validation & Matching Capabilities

Some P2P networks do not support three-way matching, making it difficult to verify invoices against POs and proof-of-delivery receipts. Without robust validation, AP teams must manually review invoices, increasing the risk of overpayments, duplicate payments, and fraud. The lack of automated matching forces AP departments to rely on time-consuming exception handling workflows, slowing down approvals and raising costs. It’s also harder to track inventory without three-way matching.

Without a solution to bridge these gaps, AP teams continue to waste valuable time on manual workarounds, expose their organizations to compliance risks, and fall short of the full automation they set out to achieve – making it critical to act before inefficiencies spiral further out of control.

How AI-Powered Invoice Processing Automation Solutions Bridge the Gaps

AI-powered invoice processing solutions do more than just integrate with P2P supplier networks – they extend automation beyond the P2P system by handling invoices that arrive outside the network. However, these solutions are not simply software that organizations buy and bolt onto their existing processes. They are delivered by trusted AP automation partners that offer ongoing support and layered services to ensure complete and scalable solutions.

With expert-driven management, AI-powered solutions help AP teams finally realize the benefits they expected from their P2P networks. Here’s how:

Process Any Invoice in Any Format

Unlike P2P networks that require suppliers to submit invoices in a predefined format, AI-powered solutions process invoices received via mail, email, PDFs, scanned paper documents, file transfer, or any other channel. This flexibility ensures that no invoice is left out of the automation process, eliminating the need for manual entry and rekeying.

By seamlessly capturing and extracting data from any invoice type, AI-powered solutions enable AP teams to achieve complete automation without disrupting supplier relationships or imposing restrictive submission requirements.

Perform Intelligent Invoice Validation & Matching

AI-driven invoice processing solutions automate two-way and three-way matching, ensuring invoices are accurately verified against POs, and proof-of-delivery receipts with little-to-no human intervention.

Automated three-way matching reduces the risk of overpayments, duplicate invoices, and compliance issues while streamlining inventory tracking. Configurable business rules allow AP departments to flag discrepancies and automatically route exceptions for rapid resolution, eliminating time-consuming, manual review processes and improving financial accuracy.

Provide Configurable Digital Workflows for Approvals

Invoices from new or strategic suppliers, high-dollar invoices, or invoices with discrepancies can be automatically routed through digital approval workflows. These digital workflows reduce bottlenecks, ensuring invoices are processed quickly while maintaining compliance with internal policies.

Exception handling is streamlined, ensuring that approvals move efficiently without creating additional work for AP teams. Some accounts payable automation technology providers offer expert assistance in resolving exceptions as well.

Integrate Directly with Any ERP

With AI-powered invoice processing solutions, approved invoices are automatically posted to ERP or accounting systems without the need for manual data entry, reducing errors and speeding up processing times.

Seamless integration ensures data accuracy across financial systems, improving visibility into cash flow and outstanding liabilities. Eliminating the need to rekey invoice details into an ERP also allows AP staff to focus on higher-value activities, such as supplier management and financial analysis.

By bridging the critical gaps left by P2P supplier networks, AI-powered invoice processing solutions eliminate inefficiencies, accelerate approvals, and enable AP teams to achieve the full automation and cost savings they were promised – before mounting manual work derails their progress.

Go from Partial to Complete Automation

P2P supplier networks are a valuable tool for automating AP processes, but they are not a complete standalone solution. If you’re currently relying solely on these networks, you’re likely dealing with invoices that fall outside the system and, therefore, costly inefficiencies that prevent you from achieving true automation.

AI-powered invoice processing solutions – delivered and supported by expert service providers – fill these gaps by handling invoices from any source, managing exceptions, and ensuring seamless integrations with ERP systems. MetaSource’s end-to-end invoice processing automation solution, SourceAP^™, can help you finally achieve the full automation and efficiency you expected from your P2P supplier network.