Becoming Paperless – Tips & Tricks (Part 2)

Yesterday we featured the first part of ‘how to become paperless’ from Dan Butts, Principal Consultant at Xoomworks procurement consultants and business intelligence experts. Today, he continues with …

Successfully enabling your suppliers

Whilst it’s not a walk in the park, it is possible to get a good chunk of your suppliers to invoice you electronically. You’ll need to treat the initiative as a project to achieve such impressive stats, with senior sponsorship and a clear plan in place. Here are some tips & tricks:

  1. Executive Sponsorship

To put this in a practical example, some suppliers will push back when you ask them to move to e-invoicing. You will need that mandate and a solid relationship with the business to be able to hold firm and push back to the supplier that e-invoicing is a requirement. As a general rule you should confidently be able to tell the supplier that you will go elsewhere if they can’t comply with e-invoicing. To do this you need the support of the business and direction from your executives.

  1. Clear Policies

Policies should be created to define which suppliers should be enabled and what the procedures are if issues occur when enabling a supplier. Some of the typical questions asked when creating these policies are: All suppliers? Suppliers submitting over 4 invoices a year? Those traded within last 24 months or 12? What happens when they refuse? What if they demand payment to comply?

Without clear policies there is a risk that time is wasted enabling suppliers who should not be enabled.

  1. Team

Not all suppliers want to move to e-invoicing and this can slow up progress in processing what is often a long list of suppliers that you want to enable. To better manage this we recommend setting up two teams.

The first team covers the process of contacting the supplier to sell e-invoicing and guiding the willing suppliers through the enablement process.

The second team manages any issues that the first team encounters when selling e-invoicing or during the enablement process. The two processes are different and require different skill sets. By segregating the work in this way you can use lower cost resources more efficiently in team one and more skilled trouble shooters in team two.

  1. Process

A clear process and plan is required to effectively enable the different categories of suppliers. An important area often overlooked is an escalation process for when problems arise.

  1. Supplier Data Segregation

One size doesn’t fit all – meaning it will not be possible to enable all suppliers using the same e-invoicing method due to difference in supplier types. Providing options to your target suppliers provides the best chance of those suppliers adopting e-invoicing.

  1. Data Cleansing

It’s advisable to review your master data prior to launching the enablement drive, with the aim of ensuring you have up-to-date supplier lists with correct contact details etc. This is important as often, suppliers use account managers’ email addresses, personal emails or ones that are caught in junk filters meaning orders don’t get to the right people.

  1. Supplier Engagement

It’s advisable that you do more than just tell your supplier that they must invoice you electronically. We advise to sell the benefits to the supplier – get paid on time, improve working capital, self-service invoice tracking. Also to offer trainings sessions for your suppliers and provide supplier training materials for use of e-invoicing platform.

  1. Procurement Engagement

E-invoicing might be driven by finance but procurement has a role to play. Procurement can help by adding an e-invoicing clause to new and existing supplier contracts and by managing any commercial discussions the supplier might bring up as a result of the project. Ensuring that any new suppliers automatically have an e-invoicing clause is also a sensible move.

  1. Accounts Payable Engagement

A successful e-invoicing project will change AP processes and the skill sets required in the team, moving from invoice processing to exception handling and proactive capital management. Planning for and selling these changes to your team is therefore crucial. AP become more strategic, this should be an opportunity for your team members. Inevitably, not everyone can make the transition, so work with HR to plan for this with training and re-skilling.

Where to next?

Embarking on a mission to remove (or at least reduce) paper invoicing should not be under estimated. It’s not easy but then nothing worth doing ever is!

 

 

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