From the beginning, supplier enablement has been the Achilles heel for ePayables technology deployments. Traditional buyer-centric solutions and approaches to supplier enablement may be the reason why a majority of suppliers are not enabled today. But are those suppliers making the right decision or do they just lack enough information to understand the value that electronic invoice submission creates for suppliers?
Certainly, there are hurdles to suppliers becoming enabled like integration challenges and the costs of managing customers across multiple platforms/technologies. Nonetheless, AP teams should do a better job explaining the supplier value proposition for participation and work to better understand the challenges that suppliers face.
Enabled suppliers frequently report the following benefits:
Reduced costs: Being able to electronically submit invoices to customers can deliver significant savings (assuming there are no [or low] transaction fees for suppliers). Examples include a reduction in printing and mailing costs, savings from not having to reprint invoices, fewer customer service calls, etc.
Fewer disputed invoices: Suppliers can flip POs into invoices or submit eInvoices straight-through from their AR system. eInvoicing eliminates the buyer’s need to manually create an invoice, reducing the potential for errors. As a result, invoices are less likely to be rejected and customers can start processing them without delay. In the event a dispute does occur, it can easily and quickly be resolved online as opposed to via the phone.
On-time payments: eInvoicing can impact invoice processing and approval cycles on the buyer side, and when combined with ePayments, suppliers often see an improvement in on-time payments.
Improved ability to forecast: Having access to real-time data around submitted invoices, invoice status, payments, and more adds a level of predictability and visibility to the supplier’s AR process and its ability to forecast cash flow.
Accelerated payment: If suppliers are able to receive payments quicker via a simple and effective tool that doesn’t require heavy investment of time and resources, significant value may be created.
Buying organizations (and AP) should focus on building relationships at a more strategic level with their key suppliers, rather than burdening them with uncertainty and a lack of visibility and confidence in their customers’ AP operations. When suppliers raise inquiries, it indicates their concern regarding invoice/payment status and affects their ability to optimize working capital. This is less than ideal. Strategic suppliers should be able to trust and rely on consistent customer payments and AP must do its part to ensure that they can.
Strategies for Success
Ardent Partners recommends the following strategies and approaches for AP leaders and their departments that are seeking to improve their performance and operations over the next 12 – 24 months.
• Work with treasury and other finance leaders to develop and/or improve visibility across the full AP process to enable a comprehensive view into the management and timing of vendor payments.
• Investigate how and where AI capabilities are being offered by the team’s current ePayables provider(s) and gain a deep familiarity with the AI roadmap. Determine the value and applicability of the provider’s approach and challenge the provider to prioritize the team’s demands.
• Get AP’s data house in order to maximize the impact of new and emerging AI capabilities.
• Invest in advanced fraud detection/prevention solutions and develop a robust strategy to track and monitor aggressively. Remember that an automated closed-loop system is the best first step in fraud mitigation.
• Work to build and maintain a general awareness of new (and evolving) invoicing mandates around the world and assess their potential impact on the current supply base. Take proactive steps to ensure compliance when each new mandate takes effect.
• Develop organizational expertise in AI by tracking and monitoring the products and plans of AI-led automation in the ePayables marketplace, attending webinars and events, reading reports and engaging experts.
• Design a strategic plan around compensation and performance targets to incentivize both AP leaders and staff to align efforts and improve performance.
