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Why E-Invoicing Needs Machine Learning to Accelerate Invoice Finance

In the past, most procurement organizations would admit to doing a generally poor job of linking buying processes to the actual receipt of invoices, the invoice approval process and the subsequent payment to suppliers.

But in more recent years, corporations have moved to the cloud for document and data exchange around their source-to-pay processes, driven by factors including the rise of platform-based technologies that drive efficiency and effectiveness in the procurement and accounts payable areas as well as by government tax regulations.

Many invoices still come in via PDF and paper, and require some form of machine recognition. With machine learning, providing scanned documents and automatic extracting offers a way to make instant credit decisions for off-platform funding.

Will The Plethora of Early Pay Techniques Give Suppliers a Nightmare?

Step back from the current craze around all the new financial technology solutions for companies to access cash, from e-procurement and e-invoicing solutions to marketplace lending and supply chain finance, and try and think about this from a logical basis – from the perspective of the supplier. You want to pay early. But by the time you figure out how to get it from all these solutions, you’ve logged into half a dozen or more solutions every day that are not directly integrated into your systems. You may even have to hire a few staff. Clearly, this is an area that deserves more attention, which suggests it might move to embracing a supplier-led ecosystem as well.

Third-Party Funding for Dynamic Discounting – Still in Infancy?

procurement

On Trade Financing Matters, I’ve been sharing a number of my thoughts in recent days LINK about some of the challenges and hurdles faced in driving greater adoption for third-party financing for invoice discounting and dynamic discounting, as well as some thoughts on what it will take to cross the chasm from corporate and treasury funded-programs. David Gustin, the managing director of Trade Financing Matters, could not sit still after reading what I had to say and decided to chime in himself. Below, I’ve featured a few of his thoughts on the challenges with non-bank funding for invoicing discounting and dynamic discounting models that leverage an approved invoice through an e-invoicing or supplier network connectivity service.

5 Catalysts for Third-Party Funding of E-Invoicing

Yesterday, I covered some of the challenges surrounding the adoption of third-party financing across e-invoicing solutions and supplier networks. But perhaps the more important question is: What will it take for these solutions to cross the chasm from theory to action? I have some hypotheses. Either individually or collectively, it will be fascinating to see how these 5 scenarios come together.

Why E-Invoicing Has Failed to Attract Outside Funding

As Tungsten recently reported in its financial results, the level of adoption for bank or non-bank intermediated financing through supplier networks and e-invoicing programs is still embryonic. Spend Matters and Trade Financing Matters estimate that more than 95% of invoice discounting and dynamic discounting programs that leverage an e-invoicing, supplier network or related platform capability currently rely on corporate self-funding to support such programs on a volume basis today. Finding a logical answer to why third-party adoption is low requires a deep dive.