05.05.15 |
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P2P Trends 3 of 5: “Buyer-Supplier Collaboration” is a Key to Success of eInvoicing

CollaborationPayStream Advisors’ webinar on the “Top P2P Trends for 2015” touched on collaboration between buyers and suppliers as being critical to the success of an electronic invoicing initiative.

Let’s take a look at some of the things that help drive the ROI on a payables automation project for a buyer organization:

  • Reduction or elimination of manual data entry needed to get invoices into the accounting system
  • Fewer exception invoices that slow down the approval process and add cost to the equation
  • Increased matching of invoice pricing with contracted pricing to help reduce profit leakage
  • Improved capture of available discounts offered by suppliers in exchange for early payment
  • Reduction in the number of calls/emails from supplier inquiring into the status of their invoices

All of these objectives rely heavily on collaboration between the buyer and supplier.

When suppliers submit invoices electronically, not only is data entry substantially reduced or even virtually eliminated on the buyer side, but buying organizations are now in a position to use the line items data available on electronic invoices to do price matching against contracted pricing to help increase contract compliance.

It is important to keep in mind that not all suppliers are created equal. So when considering automation technologies, take a look at the various electronic invoice submission options and ensure that you implement a solution that can work for the majority, if not all, of your suppliers – however large or small they might be.

Supplier fees are another area to evaluate when choosing an electronic invoicing solution. If you want to increase the percentage of electronic invoices you receive, don’t put an unnecessary barrier in front of your suppliers in the form of fees they need to pay to transact electronically.

Finally, a good and easy-to-use supplier portal is important so suppliers can log in and see exactly where the invoice is in the approval process and if there is anything they can do to help accelerate the process. For example, if suppliers can see that an invoice has been disputed because the pricing was outside the contract, they can either correct the pricing and resubmit the invoice, or they can provide some backup documentation to show why the pricing was off contract. This can help reduce the slew of emails and phone calls that would typically be needed in the paper world to resolve this issue.

Collaboration is also important from the supplier side. When they have access to real-time status of invoice and payments, suppliers have the ability to forecast their cash flows more accurately. Being able to aid in the dispute resolution process means that their invoices are generally approved and paid faster – which always a good thing for suppliers, and even more so in industries, like oil and gas, that are currently experiencing a decline in business.

As you can see, the more opportunities for the buyer and supplier to collaborate, the more value both can get out of automation.


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