Two-thirds of Deloitte CPO survey respondents said “generate win-win situations and trust” to build partnerships with suppliers.1
e-Invoicing for the Win-Win
Today’s supply chain is anything but static. With increased competition in the global marketplace, strategic relationships with your supply base can become even more advantageous. If parts become constrained, a good working relationship can help ensure you are at the top of the list for delivery. When an order needs to be expedited to keep production on track, a good relationship can mean that your supplier goes the extra mile to make sure your order ships right away. Today, many companies’ supplier relationships are strained from constant price negotiations, poor communication, and a lack of supplier visibility. e-Invoicing is a win-win situation that addresses all these issues, while helping to streamline your accounts payable (AP) process.
3 Ways e-Invoicing Improves Supplier Relationships
Challenges with supplier relationships are often rooted in data – or more specifically a lack of data. Lacking visibility can result in unhealthy assumptions, mistrust, and poor negotiations for both you and your suppliers. But e-invoicing provides an answer to common challenges related to data:
e-Invoicing ensures updated contact information: Companies often do not even have accurate contact details for a vendor. How can you build a strategic relationship when you do not know who to talk to? e-Invoicing solutions provide an opportunity to collect and update critical vendor details, such as company demographics, contact details, on-boarding documents, and banking information. Providing suppliers with a simple way to keep this information current is the first step to improving your working relationship. This ensures you both know who to contact and avoids unnecessary strain from simply not being able to communicate efficiently.
e-Invoicing offers visibility into payment status: One of the most common complaints I hear from suppliers is the lack of visibility they have into payment status. This lack of transparency often results in suppliers thinking that their customers’ AP team is delaying payments to hold onto cash, when in reality invoices are stalled in lengthy approval and payment processes. e-Invoicing enables suppliers to send invoices directly into the AP process, automatically validating the invoices, and providing confirmation to the supplier that the invoices have been received properly. When invoices are received electronically, all the data and the status of the invoice in the AP process can be made available to the supplier, so they can check the progress and estimated payment date on-demand, without having to contact you. This level of visibility eliminates the majority of calls and e-mails into AP, saving both buyers and suppliers time, money, and aggravation, while also building trust and reassurance.
e-Invoicing supports contract negotiations: Price pressure has a tendency to strain relationships. But when you receive your invoices electronically, you have access to much more detailed information that can support you during these conversations. Imagine realizing that you actually spend 40% more with a supplier than you initially thought. With manual invoice processing, data often has accuracy issues that prevent organizations from understanding their true spend by supplier. Visibility into spending by supplier can bring more substantial reasoning to your request for better pricing and helps the supplier understand the value you bring as a customer. And since e-invoicing creates a better data connection between buyer and supplier, it is often the catalyst for supply chain finance solutions, such as dynamic discounting and card programs. These can be used to offer the supplier an additional benefit (early payment) in exchange for final price concessions.
Ready to learn more about e-invoicing?
e-Invoicing has tremendous benefits for your AP organization. Reduction of manual processes, better data accuracy, faster invoice processing, and real time data analytics are just the beginning. e-Invoicing can help build strong supplier relationships that can be leveraged to create a strategic competitive advantage, keeping your organization ahead of the competition.
Check out our eBook: 6 Steps to e-Invoicing Success and reach out – we’re here to help!