Rule 3: Giving suppliers visibility of their invoice in progress

Unlike many other retailers, Amazon has not yet been hit hard by the consumer credit crunch. In fact, its fourth-quarter profits rose by nine per cent, having enjoyed its best Christmas ever.

Aside from its broad product range and outstanding user interface, what consumers really appreciate is its tracking mechanism - it’s hugely reassuring to check your account and see the words ‘item dispatched’ next to your order with a predicted delivery date. But being able to check the status of a transaction easily can be life-critical if you’re a supplier. In today’s cash-strapped economic climate, it can make all the difference to cash-flow, business survival and fingernails.

The ‘disaster scenario’ that suppliers dread is waiting weeks for payment – only to then call to discover the invoice has been either misplaced, entered incorrectly on the system or is waiting to be checked because it fails to tally with the original order.

At the same time, what purchasing organizations really don’t need is hundreds of anxious suppliers phoning up each day to plot the progress of every payment. Thankfully, there is a pain-free solution to all of this … that takes us back to the Amazon example.

Imagine being able to visit a web site where you can ‘flip’ purchase orders into electronic invoices automatically, so there’s no room for errors at the payment end? And how about streamlining the payment process, so ‘human approval’ is quick and easy? And what if everyone – buyers and suppliers – can track payments online, 24-7 so they know exactly when payments are being made?It’s an approach that the London Borough of Enfield, helped by EGS, and many other organisations are now adopting, fully aware that it will ease the financial pressures faced by their valued suppliers. If you want to improve supplier relationships – and reap the rewards of their greater loyalty and better service – then improving the efficiency and visibility of your payment process will work wonders. There are few things that focus the mind so sharply as fast payment. Especially now.

And it means there’s a better chance your favourite suppliers will be around provide the goods and services you need tomorrow.

Rule 2: Make e-invoicing easy for ALL suppliers

Here are some facts that will put this issue into context: There are approximately 20 million European businesses. Of these less than one million have greater than 250 employees. The rest are small companies. Over one third of the total 30 billion invoices per year within the EU involves a small company, yet they have to date been neglected by many of the recent e-invoicing initiatives.

In addition, there is still widespread beliefs amongst SMEs that e-invoicing is tricky, unsafe and disliked by the tax office. The dematerialisation of the invoice into HTML, PDF or XML with transmission across the Internet can appear a big leap from printing and posting. Not surprisingly the tried and tested practices remain hard to replace.

Actually, e-invoicing doesn’t have to be difficult, is more secure than ordinary post and can be the tax man’s preference if implemented correctly. At EGS we work with many large buying organisations to ensure that even the smallest suppliers can simply, safely and legally issue electronic invoices. Those suppliers unable to create structured e-invoices on their own can generate and send e-invoices using other EGS services, including:

• A paper to electronic transformation facility where their printed invoice is scanned, the image analysed by optical character recognition software and the output file validated against purchase order and master data records before being transmitted to their customer
• A purchase-order-flip facility, which simplifies the on-line creation of an invoice using data taken directly from the purchase order. This done via a browser at EGS's supplier portal
  

This really is a win-win for both parties:

The buyer achieves the efficiencies associated with full end-to-end e-invoicing from all of their suppliers.

The supplier speeds up their bill presentment, gets online visibility of the progress of their invoice in their customer’s authorisation and payment processes and has access to comprehensive records and reconciliation data

This should make every happy – even the VAT inspector.

Next time: we will look at rule 3 - give suppliers and buyers visibility of the electronic invoice approval process.