You’ve taken the steps to automate your accounts payable processes. Now how do you convince your suppliers to come aboard?
Companies that exhibit reluctance to e-invoicing often cite the expected lack of compliance by suppliers as a primary reason for their concern. So being able to convince suppliers that they will also experience significant benefits by submitting their invoices electronically is a big step in moving the process along. We’ve talked before about the main benefits of e-invoicing: faster processing and approval cycles, reduced cost, greater accuracy, increased visibility, discount capture, and improved dispute handling. What suppliers need to realize is that they can also reap rewards from these same benefits, especially if the e-invoicing solution implemented by the customers includes a supplier portal.
A supplier portal is, quite simply, a web-based, self-service interface that automates invoice submission and allows suppliers to view invoice status and payment information, 24/7. Suppliers can now see for themselves which invoices have been received, which have been routed to the appropriate approvers, which are being held as exceptions, and which have been submitted for payment. That results in a marked decrease in phone calls to the AP department (which makes for a happier customer…and supplier). This also gives both parties the information they need to better manage their cash flow.
So why the resistance? Let’s deal with a primary human characteristic…people, by and large, resist or fear change. For suppliers, the resistance is more than just a reluctance to change (although that is still a factor). Additional barriers include potential fees, tech implementation, and a sudden lack of human contact. Depending on the e-invoicing solution implemented, a supplier’s resistance can be mitigated.
Fees: Suppliers don’t want to pay to submit their invoices. Force them into that situation and they’ll stay with the status quo. Some supplier e-invoicing models require suppliers to pay a percentage of spend; some require a flat monthly fee; but the path of least resistance tends towards those e-invoicing models where suppliers pay nothing. Make sure when evaluating a solution, there’s no charge to suppliers.
Tech Implementation: Hardware, software, training: these are all expenditures that suppliers don’t want to incur, especially since many of them are still comfortable with using paper invoices. A cloud-based, SaaS solution eliminates the first two concerns, since there’s no cash outlay necessary. Confirm that the solution you’re considering includes onboarding and training suppliers to use the system, and that the solution is easy-to-learn and easy-to-use.
Human Contact: Some people just like to talk to other people. No automation solution can answer that need; but that’s not the purpose of business. Suppliers, like their customers, look at the bottom line, not at social interaction. Time spent on the phone tracking down payments or discussing disputes is time likely not spent on more productive tasks.
Here’s a fact that you should remember and suppliers need to realize. The business world is changing; supply chains are often global in nature; and throughout a growing part of the world, e-invoicing is mandated. So whether your suppliers like it or not, e-invoicing may well become a significant part of their business dealings.
The important thing is for you to communicate with your suppliers early on, to relieve their fears and concerns, and to convince them of the benefits they’ll realize. One of the ways to allay fear is to remind suppliers that many are already submitting invoices electronically as PDFs or TIFs, so they’re already part of the way towards full e-invoicing.