When organizations are in the market for an AP Automation solution, they rarely think about how the solution they are investigating will also enhance their vendor relationships. This may seem like a selfish way of thinking, but that is not the case. The truth is, the problems they are trying to solve within their own company are enough to think about and probably justify the investment alone. But when we talk about ROI shouldn’t we be looking at the whole picture? This article will be focusing on benefits gained for your network of suppliers which is a category usually overlooked when reviewing solutions to automate the Accounts Payable processes.
When suppliers are asked to do something different there is usually some pain and effort involved in making that change a reality. But when significant benefits are at stake you will likely see that adoption rates increase dramatically, especially when there is no cost associated with gaining said benefits. When automating Accounts Payable with electronic invoicing, your suppliers will instantly reap the benefit of visibility. They will know what approval stage their invoice is in and any issues associated with them. Being able to communicate and fix issues within the platform expeditiously.
You and your suppliers will also gain submission efficiency with automated 2-way and 3-way matching. Vendors can submit invoices only if correctly matched against the PO. E-invoicing will actually tell them exactly what and where the errors are so they are able to fix the problems avoiding any match exceptions. Suppliers and customers also love this feature because Accounts Payable departments no longer have a pile of match exceptions in the office. Also suppliers get paid faster which helps to enhance business relationships.
Compared to emailing PDF’s or mailing invoices, suppliers can log in and drop an Excel file with all of their invoices in a matter of seconds. To ensure that customers are 100% paperless, Electronic Invoicing (as part of the service) will convert the PDF’s and paper invoices to the electronic format. There will always be those suppliers who won’t change how they do business regardless of the benefits they are missing out on. When we decrease the invoice lifecycle by cutting out the obvious delays like these prehistoric methods of submission, we increase incentives around capturing discounts. Suppliers can opt to get paid early at a fair discount percentage within the platform. They actually have the ability to weigh the discount term stated against how early they are getting paid to find the optimal timing for that transaction.
Since E-invoicing customers are paperless starting on day 1, Vendor Adoption Teams simultaneously start their work on converting the suppliers still sending paper. They pursue these vendors and educate them on the benefits they are missing out on. Many Vendor Adoption Teams average 50-70% supplier conversion to electronic submission within the first year! The pitch is easy, especially when there are no fees to the suppliers for any of the above benefits.
Supplier E-invoicing really does benefit everyone involved in the invoice lifecycle. Whether it’s the supplier, the AP clerk, AP Manager, Audit Team, Invoice Approval Managers; you name it…The benefits are everywhere.