The Finance Category

E-Invoicing’s Growth and the Supply Chain Finance Opportunity — For Buyers and Suppliers

The global invoice finance market is massive — and growing. Already topping $3 trillion worldwide, increased use of e-invoicing by companies and mandates for the technology by tax authorities are creating new opportunities for buyers and suppliers. What’s more, the rise of P2P and S2P systems has brought buyers and suppliers into closer collaboration than ever before, positioning supply chain finance to jump from a fraction of the invoice finance market to a dominant player in this evolving space. To learn more about these trends and what solutions are available to procurement, suppliers and solution providers, we sat down with George Shapiro, CEO and chairman of The Interface Financial Group, to get his take on the state of the market today.

Sponsored Article

What CFOs and CPOs are Looking at to Transform Accounts Payable in 2018

As companies set their strategic priorities for 2018, the push for digital transformation has taken hold. But while functions such as sales and marketing already have a firm foothold in the digital world, supply chain-related functions have had to wait their turn to revolutionize their tools and process. This year, however, stands to be the one where procurement and accounts payable organizations shed their back office brand for a new, strategic approach. To find out just where CPOs and CFOs are focusing in 2018 as they lead their digital transformations, we sat down for a quick Q&A with Xavier Olivera, our in-house purchase-to-pay (P2P) expert, and David Gustin, executive editor of Trade Financing Matters, for a conversation spanning procurement-finance collaboration, common barriers to technology adoption and the future of early payment programs. 

10 Reasons For Procurement to Work With Payments (Part 2) [Plus+]

e-invoicing

In the first installment of this series, we explored several arguments in favor of why procurement should get closer to the actual settlement process and cash flows of the final step in procurement transactions: payment. Today, we move into reducing supplier risk, capturing savings and reducing contract/compliance leakage through closing the transaction, invoice, and payment loop, and the importance of greater visibility into supplier engagement models and supplier network fees (amongst other reasons).

Payables Automation Provider Tipalti Raises $30 Million in Series C Round

funding

Tipalti raised $30 million in its Series C financing round last week, bringing the global payables automation solution provider’s total funding to more than $50 million, according to the press release. Zeev Ventures, which focuses on investments on small businesses, led the round. This is the venture capital firm’s first investment in the P2P market, notes David Gustin, lead analyst and founder of Trade Financing Matters. Oren Zeev, the founding partner of Zeev Ventures, is also the co-founder of Tipalti, playing what Forbes has called a hybrid founder-investor role.

10 Reasons For Procurement to Work With Payments (Part 1) [Plus+]

Sometime shortly after the phrase “P2P” was born, we managed to collectively forget what the second “P” meant. As a friendly reminder, it stands for “pay.” Rather than spanning the length of a transaction from an initial order to payment to a vendor, P2P became known (while companies wrote RFPs for solutions and as vendors marketed tools) as the combination of e-procurement and e-invoicing. This duo, while extremely valuable, doesn’t exactly impact payment all that much (if at all).

But payment matters much more than most folks we talk to in procurement think. By taking control of payments, we can, for example, do an end-run around the administration hassles and supplier headaches that poorly run accounts payable (AP) functions create. And this is just one reason to consider getting more involved in payment strategy and execution. In fact, we can think of at least 10 reasons that should factor into a business case for procurement to seize control and initiative around payments.

Sponsored Article

Italy and the Real-Time VAT Control Big Bang

Electronic invoicing is on the decline — and rapidly so. No, I don’t mean companies have started exchanging fewer invoices in electronic format. I mean that the domain that we have in the past 15 years called “e-invoicing” is converging with the broader VAT compliance domain. Together, the two are morphing into what might be called “VAT compliance v2.0.”

Unlocking Deeper Value in the Procurement and Finance Relationship (Part 3): The Top 10 Impact Areas for Procurement’s Involvement in FP&A [Plus+]

invoice

In the second installment of this series, we discussed procurement’s role in helping finance professionals and budget owners use spend data to improve the FP&A process and general business planning. Now in Part 3, we get specific about how to tackle this beast with some specific recommendations that we’ve seen proven out at both advanced firms and at firms that are further back in the bell curve of procurement maturity.

Unlocking Deeper Value in the Procurement and Finance Relationship (Part 2): Spend Planning and Analysis [Plus+]

e-invoicing

In the first installment of this series, we discussed ways to align procurement with the finance function, starting with financial accounting and then moving into cost accounting. Although cost accounting has one foot in the financial accounting world in terms of tracking costs and having them flow to the general ledger (GL), the more important side of cost accounting is its part in managerial accounting and total cost management.

Managerial accounting is about analyzing financials to make good business decisions. It includes analyzing historical costs and spending, but only in the context of improving future spending and reduce total economic costs. One aspect of economic costs is opportunity costs, and procurement must work hard with finance to understand the procurement ROI that comes from strong management of external spending led by the procurement organization. This ROI is measured in triple digits but must be demonstrated with hard numbers.

More importantly, however, procurement’s ability to partner with finance to better influence future spending is the most practical way to influence financial and business results. This comes from procurement aligning well with finance within the financial planning and analysis (FP&A) processes that occur in finance. Hopefully, FP&A is more than just basic budgeting at your organization. Done well, it provides the critical linkage to not only financial planning but also strategic and operational planning that drive success for budget owners, broader stakeholders and shareholders.

Given the importance of FP&A, we’re going to focus on this collaboration area and how to apply it to spend management, which you can think of as “spend planning and analysis” before the spend actually occurs, as opposed to traditional “spent analysis” of spend that already happened. This focus upstream is fundamentally about transformation and changing procurement’s role in the planning and budgeting process. Luckily, this area creates much higher quality of spend influence, which drives proven levels of spend savings.

Intuit’s QuickBooks Brings Small Businesses and Independent Contractors Closer at Tax Time — and More

Financial software giant Intuit announced Wednesday that it is adding two new tax-related features to its QuickBooks products. The release of two features might seem like small potatoes, but we’ll elaborate on why that’s not quite true. The new features benefit both small businesses and their contractors, which could be considered the core of the expanding gig/freelance/self-employed economy, where Intuit is nurturing a growing, cloud-based software and services ecosystem.

Unlocking Deeper Value in the Procurement and Finance Relationship (Part 1) [Plus+]

finance

Much has been written about the need for procurement and finance organizations to better align with each other, in particular how the two functions can best integrate purchasing and payables into an end-to-end purchase-to-pay (P2P) process. The opportunity for aligning these two functions, however, is much greater than simply improving transaction efficiency. Unfortunately, the various sources of misalignment that plague procurement and finance prevent many businesses from identifying these opportunities in the first place.

The sad part of this story is that the two functions share many common traits. Both seek to:

  • Elevate their value propositions as enabling business partners by providing compelling service offerings — and overcome their perception as bureaucratic corporate overlords
  • Maximize enterprise value and profitable growth through disciplined spend management
  • Spend not just less but better in terms of process efficiency and process effectiveness
  • Use new techniques and technologies to help the business make better decisions that support the above goals
Additionally, these functions should in theory strive to serve each other as internal customers while also enabling the other to deliver higher value to their own internal (and external) customers. Unfortunately, theory has rarely translated into reality, and the result is that each function is leaving money (and risk) on the table.

Procurement can certainly help finance get more value from its suppliers, but it can also help finance improve service delivery in areas such as FP&A, treasury, tax, financial accounting, risk and compliance, commodity management and even accounts payable.

On the flipside, finance can help procurement in multiple ways, namely to help procurement on value-adding activities — including helping finance. This is a classic “help me, help you” moment. If procurement can help finance help procurement (and help finance help itself), then procurement’s value potential can be truly unlocked.

Supplier Retention Seen as Increasingly Important to Businesses, But What About Screening?

suppliers

For today’s executives, achieving supplier retention is increasingly seen as vital to the business. When the payables automation provider Tipalti surveyed executives on issues related to supplier payment, 68% of respondents said that maintaining long-term business relationships with their payees is critically important.

5 Best Practices to Improve Accounts Payable Processes

invoice

Spend Matters welcomes this guest contribution from Steve Johansson, director of marketing at iPayables.

The act of processing your invoices and handling your accounts payable has traditionally been considered a reflexive function of business, but in today's digital age it can become more strategic. Automated accounts payable solutions have undergone a significant evolution regarding efficiency and functionality, primarily through software that streamlines the entire process to ensure that best practices are being implemented consistently. The following is a list of methods you can use to within your accounts payable team to streamline your business and maximize the benefits of digital technology.