Managing documentation is an integral part of running a supply chain. Generating the necessary documents online and automating the management process helps to increase compliance across the organisation and can save your imports and finance teams a huge amount of time.
Managing invoices through an online invoice system will also help to create a single end-to-end process that works across multiple geographies. It should streamline global supply chain operations and increase invoice compliance through online documentation management and automation.
There are 7 reasons why organisations are moving towards using an online invoicing system, as outlined below:
1. It’s cheaper to produce an electronic invoice
The cost of processing a paper invoice is, on average, $17.60 euros for a retailer and $11.10 euros for a supplier. Processing the same invoice electronically costs $6.70 euros for the buyer and $4.70 euro for the supplier respectively.
There are roughly 16 billion B2B invoices processed each year in Europe alone, according to Deutsche Bank. Going online can lead to real cost savings, and also reduces manual administration. The below facts and figures highlight the potential ROI that can be achieved from moving to e-invoicing. (Reference – http://www.einvoicingbasics.co.uk/benefits-of-einvoicing/facts-and-figures/)
2. It’s easier to on-board global trading partners
AS the number of overseas suppliers grow, so does the need for compliance and standardisation. It is extremely difficult for large organisations to manage manual invoices that come in a variety of formats. These organisations need a solution that’s simple for their trading partners, who could be located anywhere in the world in order to easily manage day-to-day supply chain transactions, in a visible, open and collaborative way. There is also a reliance on invoicing and document correctness for regulatory reasons, so ensuring that critical details are captured each time is crucial (like the Certificate of Origin requirement for free trade agreements).
3. It’s easier for suppliers who are increasingly tech savvy
Suppliers have become a lot more IT savvy in recent times. It’s often their preference to use an online invoice system to generate and share invoices independently with their customers. As general IT skills improve, trading partners are ready and able to perform basic document management tasks themselves.
They appreciate the benefits of managing documentation online, as it also allows them to save time through generating and approving invoices quickly and easily, with instant verification, alerts and approval. They can also receive automatic updates about invoice status and monitor progress to make sure payments hit their bank accounts in a timely manner.
4. It saves money and speeds up payments
As invoices can be generated and approved in real-time, suppliers are getting paid sooner, improving their cash flow. Not only are they saving money by going paperless, there is less money spent on time and materials such as printing costs and postage.
5. It strengthens the supplier/buyer relationships
A speedy invoicing and payment system helps to strengthen relationships between buyers and suppliers, encouraging repeat business. If your suppliers are getting paid in a timely fashion, it’s likely they are going to prioritise your orders, ensuring your deadlines are more closely managed.
GXS have looked into the positive impacts of e-invoicing more closely for the three key parties integral to the supply chain:
(Reference – http://www.einvoicingbasics.co.uk/benefits-of-einvoicing/)
6. It makes your Finance team happy
Trying to match up supply chain information, bills of lading and manual invoices is a tedious process for any finance team. Digitising the invoicing and document management processes of your supply chain contributes favourably to your profit margins, but also reduces the tedious admin required to make sure the invoices match what was actually received. This is something the finance team has close accountability to monitor, analyse and report on.
Through a more streamlined, accurate process, whereby paper processes are eradicated. As well as the mistakes that are commonplace as a result of tricky version control in the world of spreadsheets, electronic invoicing is simplifying data capture for finance teams and improving accuracy. Finance teams can more easily validate invoices through shipment data readily available to them online to initiate payments and forecast costs.
7. It makes your CSR team happy
Sustainability is an ever increasingly important topic on the executive board agenda. Therefore, any project that instils a paperless environment and contributes positively to CSR targets is a win, win. As invoice data and documentation is being shared online, there’s no printing or posting of forms between trading partners. Everyone benefits from being able to view documents online through a system that allows improved visibility and secure, user profile based access.
It also improves audit trials as an organisations invoice and payment data is digitised from the outset. This helps to prove invoice compliance in the event of external audits or in the event of a dispute, whereby the need to report on compliance quickly is indispensable.
The beneficial reasons to manage your supply chain invoices online are clear and they reach far and wide across your organisation. So, the real question to answer is: why wouldn’t you choose to manage your invoices online?