How can electronic invoicing facilitate your relations with suppliers?
Computers and the Internet in general have revolutionised the way companies communicate and conduct business. The whole business has undergone a metamorphosis, and digitisation of business functions is gradually being implemented. Production lines are increasingly automated, information from field operations is instantaneous and administrative processes are increasingly digitised to maximise operational efficiency.
Electronic invoicing, at the end of the purchasing process, is a strategic element in accelerating flows and facilitating relations with suppliers.
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Faster processing and payments
Electronic invoices are fast, easy to submit and cost-effective. Automating order management processes can deliversignificant savings of up to 80%, as it eliminates postage, labour, material and logistics costs.
An electronic invoicing system offers many benefits, such as faster and more regular payments. Similarly, purchasing or invoice management software reduces payment times for suppliers, which has a number of advantages:
- Suppliers see fewer data entry errors and more on-time payments thanks to predefined templates
- Electronic invoicing sends information immediately to staff responsible for approving invoices
- Accounts Receivable teams no longer need to contact customers to find out where invoices are located. Electronic invoices are easily tracked online.
- Suppliers save time and money, thanks to real-time electronic notification and communication with customers
- Faster notification and resolution of disputes
- Debt collection is reduced, becoming a one-off activity rather than a full-time job.
Reconciling payments with original invoices is easy with a system that tracks the progress of each invoice. Some solutions even provide automatic reconciliation and validation.
The efficiency of processing results in significant savings. The benefits of electronic invoicing extend beyond the individual transaction.
Optimising the cost of doing business
In the oil and gas sector, buyers can often choose when to pay suppliers. This situation is very problematic for suppliers who have reduced cash flow and have to contend with structural costs. Labour is often paid every 14 days, while these suppliers wait three months to be paid. To be competitive, suppliers need to hold stocks and be able to pay transport costs. Expenses also include administration, accounting and business software.
Getting paid quickly is not just about the cost of capital, it’s also about the cost of doing business. On credit, suppliers are obliged to take into account the risk of fraud and late payment when determining their prices. The electronic format has the merit ofoptimising these movements. Without it, the competitiveness of businesses is severely affected.
With minimal cash flow, suppliers can become dependent on their line of credit or factoring service. Working capital efficiency is important, because debt becomes less attractive as interest rates rise. Unlike debt, cash extracted from working capital does not have to be repaid. However, it does not add leverage to the balance sheet. A company’s financial strength is determined by many factors, including its working capital. Suppliers can reduce days sales outstanding by reducing the time taken to process invoices. The rapid transmission of invoices reduces the life cycle of an order and optimises the company’s operations. Finally, electronic invoicing provides a reliable audit trail, which is essential in the light of legislative requirements.
Better forecasts and improved relations
To remain competitive, suppliers need, among other things, rapid access to accurate information. They also need to be able to optimise working capital and responsible supplier relationships. With e-invoicing solutions, companies benefit from improved data visibility, which means better profitability and easier future planning. Rapid access to invoice and payment data enables suppliers to adjust their forecasts, helping them to optimise cash flow and reduce financial risk.
Improved collaboration and communication with suppliers and customers alike fosters better business relationships. Indeed, customers can designate electronic format and electronic transmission as a criterion in the company’s supplier relations charter. This in turn reduces the workload and time spent on drawing up paperwork and monitoring payments. However, the relationship between buyer and supplier becomes more symbiotic, with the shared objective of supporting the business andimproving operational performance.
Investing in technology, especially during an economic downturn, may seem risky. Yet it is well worth the risk, even if the situation seems inappropriate. Firstly, because this may be the most favourable scenario for installing this type of system. But also because suppliers will be able to measure the performance of such a change and assess the efficiency gains in processing management. Indicators include late payment days, accounts payable turnover and the cost of placing orders. Companies also need to factor the cost of indirect benefits into their profitability calculations.
Electronic invoicing reduces costs and increases productivity. It enables transactional information to be exploited to provide ongoing visibility of expenditure and cost management. The benefits of going digital have been considerable for buyers. With Weproc, you can benefit from optimum supplier management with a digital supplier portal for transmitting purchase orders and quotes and receiving electronic invoices.
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Weproc is a SaaS software specialized in digitizing the procurement process of companies. From purchase requests to supplier invoicing, through the validation process, Weproc is designed to simplify the purchase management of SMEs and mid-sized companies by centralizing all purchase-related activities.