Supplier side benefits of e-invoicing

Supplier side benefits of e-invoicing

Posted by Pete Loughlin in e-invoicing, Electronic Invoicing 14 Nov 2013

For years the growth in the use of electronic invoicing was hampered by a very simple fact. There was nothing in it for suppliers.

Think about it. A supplier wants to be paid and needs to send an invoice. Whether that’s a paper invoice in an envelope with a stamp on it or an email makes very little difference. The cost of a stamp has got nothing to do with it – unless a supplier is sending many very low value invoices, the postage cost is trivial. While only a few customers demand electronic invoicing, while the business world was largely paper based and while suppliers were being asked to subsidize the cost of their customers’ e-invoicing programs by paying for the privilege of sending an invoice, there was always going to resistance.

But the world has now changed and the business case for e-invoicing is now fundamentally different to the one-sided calculation with all the benefits loaded on the customer side that would have been built perhaps 5 years ago.

Purchasing Insight logoThere was always a theoretical case for suppliers to adopt electronic invoicing. It was the same strategic business case for joining a supplier network that offered solutions like Ariba’s Punchout and similar technologies. It was all about embracing the digital economy and building closer, sustainable relationships with customers with a similar vision. The early adopters of this vision, businesses like Office Depot*, have seen their investment in electronic trading payoff. Today for example, Office Depot sends invoices to 27 customers in 13 countries through the OB10 network.

Ellen Tosserams is e-Business Specialist Europe at Office Depot. “Automated invoice validation improves cash management and visibility while increasing accuracy and reducing rejected invoices,” she says. “Our goal is to send more invoices electronically.” Interestingly, Office Depot claim that 40% of RFPs ask about e-Invoicing.

More and more businesses are seeing the supplier side benefits of e-invoicing as they see ways to realize the full potential.  It’s a a reflection of the times. We’ve reached and passed the tipping point in the adoption of a whole variety of technologies and embracing the digital economy is no longer a matter for strategists and futurologists – it’s business as usual.

* You can download a details case study explaining how Office Deport have approached their e-invoicing program here.

Pete Loughlin can be found on twitter @peteloughlin

  • Market Dojo November 14, 2013 at 1:22 pm /

    There’s no doubt some suppliers get benefits from eInvoicing. Ariba has been drumming up supplier case studies for years. In a commoditised marketplace like office supplies, nearly any business in the world could be a potential customer of Office Depot, so it would present them with an attractive lead generation tool.

    The challenge still remains however for SMBs or any suppliers that have been transacting with their customers via say email, and have be forced onto an eInvoicing tool, especially one that takes a cut of their invoice. It solves no problem for them, yet creates several: lower margins, more effort.

    If buyers want the benefits, they alone should be made to pay for them and they need to incentivise the suppliers, say through quicker payment. Only then does it become beneficial to all suppliers, instead of just the few, large, commodity-driven ones.

  • Chris Loveridge - Crossflow Payments November 18, 2013 at 2:19 pm /

    @Market Dojo – I assume you are talking about the excessive costs involved with certain EDI providers? There are solutions where an integrated cloud based transaction processing platform is provided free of charge and focusses solely on the provision of funding the invoices.

    This dual benefit removes the cost to all parties for processing e-invoices, the cost of which is predominantly passed down to smaller companies within the supply chain. Potential savings of up to c£750k will surely put a smile on any FD’s face during these challenging times when even the price of stamps is an issue.

  • Market Dojo November 19, 2013 at 1:52 pm /

    Hi Chris,

    Yes you are quite right with your assumption. Free of charge transaction processing sounds like just the ticket, so long as it is easy to use. If both buyers and suppliers benefit from such tools, then they are here for good.

  • George July 29, 2014 at 8:48 am /

    Hi, guys, I recently came across a free program that helps invoice archiving and automate invoice processing. SmartSoft Invoice Scanning specializes in scanning or importing invoices and archiving them by predefined criteria based on key fields, which are extracted from the invoice. It may be helpful for you.

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