After more than 15 years of working within the procurement and supply chain automation sector, I know how essential it is to protect the supply chain. Without a doubt, suppliers play an absolutely vital role in making sure that a business runs effectively. As such, businesses need to manage their suppliers thoughtfully and carefully – just like any other valuable resource.
For example, purchasing organizations should be sensitive to suppliers, especially when dealing with smaller suppliers and areas such as cash flow. For most suppliers, the prompt payment of invoices is essential, and can mean the difference between success and failure. As such, some companies may even want to negotiate special early payment terms with some of their critical suppliers.
e-Invoicing makes it easier to meet the needs of individual suppliers in this way, and to work within much tighter timescales; in fact, some companies now even offer seven-day terms to certain suppliers. Special agreements like these make it much easier to build strong supplier relationships and easier to negotiate favorable prices. They make the purchasing company very easy to do business with and – unsurprisingly – suppliers value that highly.
However, even when on-time payment is guaranteed, building strong relationships with suppliers can still be more difficult than it seems. We have found in our business that alternative payment solutions can work well in this scenario. Supply Chain Financing, for example, can enable suppliers to be paid early, and for you to make payment on standard terms.
The ultimate goal here is to ensure that key suppliers are protected, while maintaining both your own business and their cash flow. In return, suppliers will typically want to help out the purchasing organization where they can – whether that means going the extra mile to provide an urgent delivery, or with favorable terms when renegotiating a contract.
All of these examples of positive supplier management boil down to the same thing: suppliers appreciate having easy access to simple processes that simplify and streamline the invoice-to-pay cycle. e-Invoicing can really help here: there is much less room for error, invoices are delivered quickly and suppliers can be paid promptly and efficiently. It is not uncommon for a paper invoice to take 10-15 days to be input to the buyer accounts payables system. This can be achieved in minutes with e-Invoicing, giving more time for approvals and payment processing.
Even though organizations may differ in their approach to supplier management, suppliers are essential to their business and should be protected. The creation of a streamlined process that meets the needs of both sides is not only an attainable goal for any modern business, but also one that will pay substantial dividends for years to come.
Click here to read more of Stefan's blogs.
For example, purchasing organizations should be sensitive to suppliers, especially when dealing with smaller suppliers and areas such as cash flow. For most suppliers, the prompt payment of invoices is essential, and can mean the difference between success and failure. As such, some companies may even want to negotiate special early payment terms with some of their critical suppliers.
e-Invoicing makes it easier to meet the needs of individual suppliers in this way, and to work within much tighter timescales; in fact, some companies now even offer seven-day terms to certain suppliers. Special agreements like these make it much easier to build strong supplier relationships and easier to negotiate favorable prices. They make the purchasing company very easy to do business with and – unsurprisingly – suppliers value that highly.
However, even when on-time payment is guaranteed, building strong relationships with suppliers can still be more difficult than it seems. We have found in our business that alternative payment solutions can work well in this scenario. Supply Chain Financing, for example, can enable suppliers to be paid early, and for you to make payment on standard terms.
The ultimate goal here is to ensure that key suppliers are protected, while maintaining both your own business and their cash flow. In return, suppliers will typically want to help out the purchasing organization where they can – whether that means going the extra mile to provide an urgent delivery, or with favorable terms when renegotiating a contract.
All of these examples of positive supplier management boil down to the same thing: suppliers appreciate having easy access to simple processes that simplify and streamline the invoice-to-pay cycle. e-Invoicing can really help here: there is much less room for error, invoices are delivered quickly and suppliers can be paid promptly and efficiently. It is not uncommon for a paper invoice to take 10-15 days to be input to the buyer accounts payables system. This can be achieved in minutes with e-Invoicing, giving more time for approvals and payment processing.
Even though organizations may differ in their approach to supplier management, suppliers are essential to their business and should be protected. The creation of a streamlined process that meets the needs of both sides is not only an attainable goal for any modern business, but also one that will pay substantial dividends for years to come.
Click here to read more of Stefan's blogs.
