There is growing awareness amongst both public and private sector organisations of the potential benefits of trading electronically with supply chain partners. Nevertheless, there are still many organisations that are hesitant about introducing electronic invoicing (e-Invoicing) to streamline their trading processes.
There are a number of factors that contribute to this hesitancy, but in the vast majority of cases, these are not the insurmountable barriers that some perceive them to be. Indeed, most of them are minuscule compared to the bigger challenges that companies face on a day-to-day basis.
Some of the more common perceived barriers, which have been brought up by the newly-published Billentis e-Invoicing Report, are discussed below.
1: Fear of the unknown
With familiarity, there is the comfort that a process that has been ‘doing the job’ for many years is tried and tested and you know what you’re dealing with. So while there may be more efficient ways of doing things, there is sometimes an ‘if it ain’t broke, don’t fix it’ philosophy that mitigates against progress.
The trouble with this approach is that it doesn’t take into account those competitors who are already sharpening their competitive edge through the improved efficiency delivered by electronic trading.
The reality is that introducing e-Invoicing will automate trading processes that are currently very cumbersome and time-consuming, freeing up time for staff to focus on issues that add real value to the business.
2: Concerns around disruption
There is no question that introducing a new system will result in some disruption, but working with the right e-Invoicing partner will ensure that implementation is as smooth as possible – and at a pace that suits you. The supplier should also be prepared to take a project management role, using their experience of similar projects to anticipate and avoid any issues that may arise.
To minimise disruption, it’s important to choose an e-Invoicing solution that will integrate with your own back-office finance system, making it very straightforward to build-in automated validation. This streamlines the entire trading process so that the benefits to the business are realised very quickly.
3: Not understanding the benefits fully
It can be difficult to envisage the benefits that such an e-Invoicing solution can deliver. The best way to do this is to ask your prospective solution provider how similar companies have benefited, and to provide evidence of those benefits.
4: Concern that it might not work for your industry
e-Invoicing is something that can be applied in every industry but it’s important to recognise that the construction industry has particular requirements that are not relevant to other sectors. If you are part of the construction industry, it therefore makes sense to shortlist only those companies that have extensive experience of that industry.
5: Low supplier adoption
There may be a concern that not all of your suppliers and sub-contractors will be able to participate in e-Invoicing. After all, your supply chain will probably include a range of differently-sized companies, each with varying in-house IT resources and accustomed to working with different formats of trading documents.
At the same time, the more supply chain partners that you can ‘on-board’, the greater the benefits you will achieve.
Addressing this consideration requires choosing a flexible solution that offers a number of different connection options to suit all of those different companies, with the ability to manage all of the likely document formats that it will encounter.
The solution should also be easy to adopt to maximise the buy-in of suppliers.
In addition, maximum on-boarding will be greatly facilitated by selecting a solution that is already being used by many of your suppliers. For those that are using a different electronic trading platform, it will also be very helpful if you adopt a solution that integrates with these other systems.
It is rarely practical to make the switch to e-Invoicing in a single phase. More often, this will be a gradual transition – typically bringing the main suppliers on board and then gradually introducing it to the rest of the supply chain.
This allows you to introduce e-Invoicing at a pace that best suits your business priorities, so it is important to choose a scalable solution that can be easily extended over a period of time.
SELECTING AN E-INVOICING PLATFORM
When selecting an e-Invoicing solution, it is clearly important to develop a business case that provides a realistic prediction of return on investment. That return is delivered through:
- Time-savings on processing managing high volumes of transactions
- Reduced risk of errors compared to manual methods
- Ability to access key information faster, compared to searching vast archives of paper documents
- Enhanced visibility of key information for more timely decision-making
- Prompt payment of suppliers to support higher discounts.
The combination of all of these benefits typically delivers a fast payback on investment with the right e-Invoicing solution.