The Invoice Data Crisis

Document exchange platforms play a vital role in this ecosystem, ensuring secure, digital B2B transactions. However, even their robust systems can’t prevent data loss once information enters ERP systems. This gap highlights the need for a collaborative approach.

For procurement and finance teams, detailed invoice data is the key to unlocking cost savings, optimizing supplier relationships, reducing supplier risks and achieving sustainability goals. Yet, a silent crisis is undermining these efforts: the loss of critical line-level invoice data as it moves from ever better document exchange platforms to ERP systems.

At CostBits, we’ve seen this issue frustrate all sizes of businesses striving for cost transparency and ESG compliance, so we decided to investigate just what is causing this. Through extensive discussions with our document exchange partners, we’ve uncovered why this happens and how collaboration can turn this challenge into an opportunity. Here’s what you need to know—and how to act.

The Hidden Cost of Data Loss

Invoice line data—product descriptions, quantities, and individual prices—provides the granular insights procurement teams need to drive savings in the range of 4–11% annually which is what our clients at CostBits have achieved.

However, when invoices flow from robust document exchange platforms like Logiq Connect, Basware, or TradeShift into ERP systems, these details often vanish. A 2023 study by the Hackett Group found that 68% of organizations lose line-level data during ERP integration, resulting in a 15–20% reduction in actionable spend visibility. This gap stifles procurement’s ability to analyze cost drivers and track supplier performance, while finance teams struggle to meet ESG reporting requirements, such as calculating the CO2 footprint of specific purchases and drive payment compliance.

Why does this data loss occur? Several factors converge to create this crisis:

• ERP System Design: Built for operational efficiency, ERP systems prioritize high-level data like invoice totals and supplier names, often discarding line items to streamline processing. This focus sacrifices the granularity needed for strategic analytics.
• Integration Shortfalls: Data mapping between document exchange platforms and ERPs frequently omits line-level fields. Many clients, opting for the “basic packages”, capture only invoice headers, despite platforms being capable of full data extraction.
• Misaligned Priorities: Businesses often emphasize broad financial metrics over detailed data, undervaluing its role in procurement and finance. A 2024 APQC report noted that 55% of companies lack processes to leverage line-level data, missing out on 10–15% potential cost savings.
• Processing Gaps: Manual or semi-automated invoice handling introduces errors, and even advanced OCR tools are underutilized when systems aren’t configured for comprehensive data capture.

This data loss isn’t just a technical issue—it’s a strategic roadblock that limits value creation across procurement and finance.

The Ripple Effect on Your Business

The consequences of losing line-level data are profound. At CostBits, our platform relies on detailed data to deliver real-time insights, from identifying overpriced goods & services to optimizing category management. Our solution works fine on header level data to help the clients start reaping savings from day one, but without line level data businesses face:

• Blurred Cost Visibility: Pinpointing which services or items drive costs becomes guesswork, reducing savings opportunities.
• Weakened Supplier Management: Granular data is essential for evaluating supplier performance and negotiating better terms, critical for maintaining competitive pricing.
• Sustainability Challenges: ESG goals, such as reducing carbon footprints, depend on line-item data to track the environmental impact of specific purchases. A 2024 Deloitte study found that 62% of firms struggle with ESG reporting due to incomplete data.
• Lost Efficiency: Manual workarounds to compensate for missing data strain already resource-constrained accounts payable teams, increasing costs and errors.
• Transaction level: Real savings are realized one transaction at a time. The initial supplier contracts form a crucial foundation for future savings, but if there is no line-level follow-up on the actual transactions, then savings will slip through the cracks.

Document exchange platforms play a vital role in this ecosystem, ensuring secure, digital B2B transactions. However, even their robust systems can’t prevent data loss once information enters ERP systems. This gap highlights the need for a collaborative approach.

A Collaborative Path Forward

By uniting document exchange platforms, customers, and analytics providers like CostBits, we can preserve detailed invoice data and transform procurement outcomes. Here’s how this partnership works:

• Educate and Empower: Raising awareness about the importance of detailed data encourages customers to prioritize full data capture, aligning systems with strategic goals.
• Maximize Data Capture: Customers should configure document exchange platforms to capture full line-level data. The business case is clear: a 2023 Aberdeen Group study showed that companies leveraging granular data achieve 12% higher savings than those relying on header-level data. Modern OCR tools make this process seamless and cost-effective.
• Strengthen ERP Integration: Document exchange providers and ERP vendors can enhance data mapping to preserve line-level details. Middleware solutions can bridge gaps, ensuring no data is lost in transit. If the data cannot fit the ERP systems, then it should still be retained for usage in large scale analytics platforms such as CostBits.
• Leverage Analytics Expertise: CostBits’ platform instantly transforms detailed data into actionable insights, from cost-saving recommendations to deep spend analysis. By instantly having all data available, the full collaborative focus can shift from “data extract and data cleaning” into “where to prioritize our efforts”.
  

This collaborative model leverages the strengths of each stakeholder: document exchange platforms provide secure, accurate data flows; customers configure systems for maximum data capture; and CostBits delivers the analytics to drive decisions. Together, we can turn a data crisis into a competitive edge.

The Future of Data-Driven Procurement

As market and regulatory demands for transparency grow and businesses prioritize sustainability, detailed invoice data will become a strategic asset. A 2024 Gartner report predicts that by 2027, 80% of procurement teams will rely on AI-powered analytics to process granular data - but for this to work the companies need to get access to cleaned, categorized, and detailed spend data. CostBits is at the forefront of this shift, using AI-enhanced tools to extract and analyze line-level data in real time, empowering companies to stay competitive.

Don’t let missing data hold your business back. Explore our top 20 free tips for rapid supplier cost reduction or contact CostBits to learn how our platform can unlock the full potential of your invoice data.