So, you’ve decided to transform the way you receive, validate and pay invoices by digitising your processes? Firstly, congratulations! Now take stock before you go to market for your provider.
Implementing an e-invoicing solution is a transformational change and whilst many construction companies and their software partners are now geared up to manage their internal stakeholders, much fewer have considered the impact on their external stakeholders – the supply chain. And this is the number one reason that so many e-invoicing projects fail within their first year.
We have examples of some of the largest contractors in the UK achieving only a 10% adoption across their supply chains many years after go-live.
The 80:20 will only get you so far
We hear of many e-invoicing providers recommending that their customers focus on just twenty percent of their supply chain, which in theory should mean 80% of your invoice volume is sent to you electronically. Many fail to onboard even twenty percent, which means their Accounts Payable teams see little impact and now have to handle invoices arriving in multiple formats.
And many give up here, never even starting phase 2 of their project, to onboard the tail end of their supply chain where an organisation will start to see the true depth of value and benefits on offer to them.
Why go further?
The benefits to those further down the supply chain (usually SMEs) are just as impactful as they are for your Tier 1s. These members of the supply chain are usually companies that don’t have full time accounts teams in place, companies that are worried about cash flow and being paid on time – the very companies that call and email you to manually check payment status as they have no real-time visibility of where their invoice is within your processes.
So why don't people go beyond the first 20%?
Because it is hard work! Change is not easy – search Amazon.co.uk for books on managing organisational change and you’ll get over 4,000 results.
Many companies think sending a couple of emails to advise of a change of process will be enough and then give up when they gain no traction at all.
Their supply chains have never been provided with information about what’s in it for them, what they need to do differently and what the impact will be on their staff and business - and they most certainly will not have been offered ongoing support by their software provider when it comes to submitting their first invoice through their platforms.
What should I look for in an e-invoicing partner?
There are three key elements that will fundamentally increase your chances of a successful transition to e-invoicing. You have to find a partner:
- Who works in your industry.
This partner is likely to already have a high number of your supply chain members using their solution. Ask them to do a match on your suppliers and ideally more than 60% will already be using their platform, which will mean the onboarding is far more successful and quicker.
- Who has supply-chain onboarding expertise.
At Causeway, the Tradex Community Management team have more than 20 years of experience working with the entire supply chain on behalf of their customers. This team will build a microsite, rich with information; make initial contact with your supply chain; and follow up, answer questions and provide ongoing support to ensure they can quickly and easily send their invoices electronically.
- Who is future proof.
Make sure you are dealing with data not documents, so that if a supplier changes the format of their physical invoices you still get the data you need. And plan for the future, how else can you make things simpler for the supply chain? By delivering Purchase Orders to your suppliers through one solution? By giving them the ability to view invoice payment status’ and reconciliations without calling you? Including e-GRN’s in the solution to achieve Straight Through Processing?
The result you should expect
We’ve onboarded some of the largest supply chains in the construction sector, including the UK’s largest construction company, Balfour Beatty, who are enjoying reaching a 94% adoption rate, and Aggregate Industries, who are at 96% supplier adoption. This is achieved through years of honing our communication strategy and ensuring the supply chain understand the benefits of using an e-invoicing solution too.
Ready to get started? Get a personalised demo of Tradex today.