When eProcurement and E-Invoicing Give Small Suppliers Heartburn

In a recent Procurement Leaders blog post, SMEs bemoan P2P, we learn about some of the complaints that smaller suppliers often make about the purchase-to-pay (P2P) environments that customers require them to sign on to (for the first installment of this series, see Why Small Suppliers Hate E-Invoicing and eProcurement). The Procurement Leaders editorial team bases its observations on supplier feedback from a Westminster Council conference, in which a number of “representatives from small and medium sized business (SMEs) voiced concerns about the barriers they are coming up against in negotiations with large clients … These centred around P2P systems.”

Specifically, “despite the discussion looking in depth at the benefits of P2P systems, including lower transaction costs, reduced lead times, and streamlined workflows, the prevailing sense was one of exclusion from SMEs.” Barriers range from “a lack of willingness on the part of smaller suppliers to adapt existing processes, to problems relating to capacity that fail to make P2P systems a viable investment for these organizations.”

So what is the solution to the matter? As with heartburn, there’s three ways to go about fixing it. The first is to take a medicine or food that immediately suppresses the problem. The P2P equivalent here is buying organizations realizing they need to prioritize help for SMB suppliers or limit e-invoicing and P2P rollouts requiring true online submission and management of transactional documents and data to larger vendors.

The second is to suppress the acid (but not treat the underlying symptom) with a more powerful drug. One could argue the P2P equivalent of this is working with a full service network provider or one that specializes in the onboarding and management of smaller suppliers.

And finally, the third (and best) means of treating heartburn is to address the underlying problem itself. In the final installment of this series, we’ll introduce this type of holistic approach to overcoming supplier trepidation with mandated P2P system participation.

Related free research downloads:

20 Questions to Ask Before Writing an EDI, Supplier Network, or e-Invoicing RFP 

E-Sourcing: Criteria for Selecting a Provider

First Voice

  1. Harry John:

    Thanks for following up. I agree that the best means of overcoming the obvious qualms that SMEs have is to get right to the problem and you’re right, mandated P2P participation must be considered given the ease of integration into existing systems, even for the smallest of vendors: perhaps the most memorable insight from said conference was one contributor explaining how they had enrolled their team’s lunchtime sandwich provider onto their e-invoicing platform – food for thought indeed.

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