How Supplier Networks and P2P Systems Fit With E-Invoicing – Defining Networks

In our past lives designing, advising and implementing e-invoicing programs with clients, the Spend Matters team has found that far too many people inside procurement and finance organizations are confused about what supplier networks provide and what purchase-to-pay (P2P) and e-invoicing solutions deliver. For example, in many cases supplier networks incorporate e-invoicing capabilities within them; in other cases they incorporate some but not all capabilities.

To understand how e-invoicing programs fit with supplier networks, we should first explore what supplier networks are. As we have previously explored, supplier networks:

• Represent a subset of the broader source-to-pay market that can be purchased or leveraged as part of or separate from a specific P2P program
• Sometimes functionally appear somewhat similar to electronic data interchange connectivity for basic company-to-company transactional connectivity scenarios but often take advantage of standards-based connectivity approaches, such as cXML, to connect with suppliers to exchange a range of document types
• Deliver core capabilities that often include: supplier enablement and on-boarding support, supplier validation such as tax look-ups, invoice and other document exchange (purchase orders, ship notifications, change orders, etc.), regulatory compliance for invoice and related document exchange, value-added transactional services such as archiving and trade financing in the form of receivables financing and payables financing
• Can, depending on vendor/provider, potentially offering a many-to-many (i.e. multiple buying organizations, multiple suppliers) approach to a number of functions, tasks and transactional interchanges

E-invoicing and supplier networks can provide significant overlapping capabilities – in fact, many e-invoicing programs are delivered via a network as the core technology. Yet understanding what networks can offer more broadly – and how they do it – is key to getting the most from e-invoicing programs and selecting the right providers to begin with.

This article is based on content from the Spend Matters Perspective: Understanding How E-Invoicing Fits. Authored by Spend Matters Founder and Managing Director, Jason Busch, with input and guidance from Trade Financing Matters’ David Gustin, it provides a foundation for organizations considering or already putting in place an electronic invoicing (e-invoicing) or purchase-to-pay (P2P) program.