While businesses closed doors all over the world and people prepared for isolation, one of the most significant responses was the dramatic overnight change to consumer shopping. From bulk-buying to online shopping, people quickly changed what, when, and how they were buying. In this blog, we identify how this e-commerce trend that has specifically impacted the transportation and logistics industry and suggest how finance teams can keep up with the rapid changes.
COVID sets new standards for commerce
Although many consumers already enjoyed the ease of online shopping, when COVID forced non-essential businesses to close their doors, consumers around the globe suddenly found their favorite brick-and-mortar locations closed with no certainty around their reopening.
Consumers initially responded by clearing the cleaning supplies and toiletry aisles, but items like sportswear, puzzles and games, furniture, home appliances, and DIY tools quickly started flying off the (online) shelf. With families now working and learning from home, people began ordering online at an alarming rate.
To meet demand, companies like Amazon set a new standard of 24-48-hour delivery and companies like Target and Walmart have integrated two-day shipping options into their model. This pressure to compete required transportation and logistics companies to immediately adapt to meet the expected level of service and commitment to consumers.
Digitization and automation in accounts payable
To keep up with increasing demand from e-commerce channels and meet customer expectations, organizations must do these 3, key things:
1. invest in their warehouses and distribution centers,
2. increase development of advanced supply chain and logistics processes,
3. and implement new technologies.
But what about back-office finance departments? How can finance teams benefit from investments in process improvements to reduce costs and ensure operations keep flowing smoothly?
A move towards digitization and automation drives cost reductions and efficiencies to both your supply chain and back office. Electronic invoicing (or e-invoicing) enables you to remove paper from the equation to seamlessly support remote working. With easy, digital access to data, all your employees need is an internet connection and a device to continue with business as usual. By eliminating reliance on paper and manual processes, your organization keeps its processes and cash flowing. This shift to digital also makes it possible to store all your financial and transactional information in an organized, secure, and easy-to-access digital repository—critical for audit management.
What does e-invoicing mean for my suppliers?
According to a study from The Economist Intelligence Unit (EIU), more than 60% of CFOs lack complete visibility into transactions within their organizations. Without complete visibility, it is extremely difficult to achieve a holistic view of your supply chain, to determine where to cut spending, where to accelerate payments to key suppliers, and how to keep processes moving.
For your suppliers, you must offer them an easy way to submit invoices electronically. Some suppliers send a high volume of invoices regularly, while others send the occasional invoice. Some might already be part of an e-invoicing network or are tech-savvy and have the resources to build EDI/B2B connections, while others prefer to send emails. The key to achieving 100% supplier connectivity is to support the needs of your diverse supplier base, without forcing your suppliers to change the way they currently do business or charging them to participate.
Depending on your supplier base, you have to offer multiple invoice submission options:
E-invoicing: Your high-volume suppliers prefer a direct, B2B integration via EDI or XML so they can send invoices directly from their ERP systems without any manual effort required. Given that most of your invoice volume comes from this small set of suppliers, this is a great place to start.
Network interoperability: Interoperability means you can connect electronically to more of your suppliers. With network interoperability, your suppliers that may use another business network to transmit financial data can continue using that network to send invoices and information to you. No change on their end means higher supplier adoption.
PDF invoicing: This option allows suppliers to send invoices in PDF format via email, which are then converted into e-invoices, getting the most complete and accurate data into your accounting system(s). If you already have a dedicated email inbox for supplier invoices, a simple redirect is all you need to do.
Supplier portal: By using an online portal, suppliers can easily send invoices electronically. They can flip POs into invoices, upload invoice information using templates, or even quickly key in invoice information for simple, one-off invoices. The major benefit here is suppliers get real-time visibility into invoice and payment statuses – which is extremely critical during this crisis – without having to call your AP department.
Let’s get started
As things continue to get back to “normal,” going forward finance and procurement departments may be expected to deliver more with fewer resources. e-Invoicing and AP automation is key to shifting the focus to process efficiencies and cost savings.
With a Cloud based e-invoicing solution, a web browser is all that’s needed for access. So, your AP teams can continue processing invoices from wherever they are, ensuring there are minimal disruptions to the flow of goods, services, and money. Through web access, finance professionals can review and approve invoices and address supplier inquiries whenever and wherever they’d like. Users can access the e-invoicing software on-the-go and our seamless user experience across all devices (including mobile) only requires them to learn once and use everywhere.
Today, Tomorrow, and The Future
In our paper, “Transportation and Logistics Business Roadmap for Today, Tomorrow, and The Future,” we dive deep into the long-term, short-term, and ripple effects of COVID-19. We explore how automation helps executives overcome challenges and plan for what comes next. Download it now.