Supplier side benefits of e-invoicing
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.
There 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