How to really get supplier’s on-board with e-invoicing (part 1)
Wednesday, 13 May 2015
A hot question right now, is how to on-board suppliers onto e-invoicing to support an invoice automation project? In this four part blog, I’ll guide you through one approach to achieving sustainable and long term e-invoice adoption.
Head of UK E-invoicing Centre of Excellence
I’ll start by saying the question should really be, ‘why should my suppliers start sending e-invoices?’ So, this first part will help you understand your suppliers a little better and what motivates them.
But, before jumping into the detail, it’s important recognise that true e-invoice adoption is still low in the UK. And the biggest barrier is that suppliers can’t see real business benefits. Unfortunately, e-invoicing has been tainted with poor business practices, excessive fees and the aggressive on-boarding methods taken by some large buyers and their closed network providers. As a result, the poor supplier has become totally disenfranchised and forced to take on extra costs. To make thing worst, many suppliers have now switched to emailing PDF invoices to cut out some cost and delivery delays. This makes them reluctant to take the next step without a good business case. Until this impasse is addressed, e-invoice adoption will be low and no one will gain the true benefits.
In order to tackle this barrier, a new approach is needed in the UK - one that focuses on doing smarter business and one that is a win/win for everyone. To be successful with e-invoicing, the buyer must make the supplier part of the process, offer them choice and give back true business value. Internally, adoption milestones must be achievable with realistic timescales. At the same time allowance must be made for suppliers on paper and PDF – but more of this in part three.
Let’s go back to your suppliers and why should they care about e-invoicing? It’s important to remember that suppliers are in business to make money and that you are not their only customer. If you forget this, then you’ll hit very low on-boarding success rates. If you need to understand more about what drives your suppliers, ask your own Account Receivables, Sales or Services teams. They will be the first to tell you what they hate about mandated supplier portals and the challenges of customer billing.
To switch to e-invoicing, the supplier will need to change internal systems and they may need to employ new staff or introduce new compliancy processes. This can take time and could need a business case to justify the investment. This makes the supplier portal the quick tactical win but not a scalable long term strategy. Quite simply they need to see e-invoicing as a way to get to your valuable cash!
In my next blog on this subject, I’ll be looking at how suppliers adopt technology and how you must use this to create a successful on-boarding campaign.