Simplifying transactions in a complex B2B ecosystem becomes possible with the creation of supplier networks and the collaboration between procurement and accounts payable.
This blog first appeared on the Corcentric Website.
For those enterprises that have seen their supply chains expand globally and have experienced the problems that result from that complexity will understand the significance of this prediction from Ardent Partners. Through its Payables Place and CPO Rising blog sites, the research and advisory firm began a series on 2015 predictions for accounts payable. These predictions are based on the major AP trends identified by Ardent Partners; one of which was an ongoing collaboration between AP and Procurement. This reflects the symbiotic relationship that is a direct result of the growth in procure-to-pay technology. Traditionally, these two departments operated in very distinct silos, only crossing paths when invoice exceptions and/or disputes came into play. Yet the benefits of collaboration couldn’t be clearer: the financial data accumulated by AP can help Procurement make better supplier decisions, and AP’s access to Procurement’s supplier contract information can help speed up the invoice approval workflow. And speed, efficiency, and accuracy all add up to a better bottom line and improved cash management.
In an effort to make this collaboration even more effective, it is essential to create links that give more flexibility to suppliers and enterprises when it comes to communications, visibility, and document submissions. This is leading to a growth in business networks, which Ardent Partners predicts will continue to grow considerably over the next few years. They describe business networks as “web-based platforms that enable interconnected buyers and sellers to trace, communicate and collaborate with each other.”
In a business environment that is rapidly expanding across the globe, these networks become even more important. With the growth in M&A, suppliers are expanding in a wide variety of geographic areas, creating an even more complex supply chain. Anything that simplifies this complexity is welcome, and networks that digitally link these entities definitely do that. So how do these networks do that?
Anywhere, anytime visibility into the AP process – Suppliers are now in multiple time zones; having to staff up to handle phone questions and concerns regarding invoices is not an efficient use of working capital. Supplier networks allow suppliers to view the status of every invoice, in real time, rather than placing a call to the enterprise’s accounts payable department. And since many of these supplier networks are mobile-ready, suppliers can access the information they need from anywhere.
Ease of communication between suppliers and companies – Communicating digitally is definitely more efficient than other forms. As with the invoices, these networks provide access to all documentation, including purchase orders, receipt of goods, advance shipping notice, contracts, and more. From the company’s standpoint, Procurement and AP have that same access and visibility, allowing each to independently verify information, speeding up any necessary resolutions.
Cloud-based, scalable, and configurable – Business networks are primarily, but not specifically, cloud-based. This gives businesses the ability to configure and scale as suppliers are replaced, removed, or added with no costly expenditures in new software or expensive hardware, and with little additional training. Plus, upgrades are able to occur simultaneously across the entire supply chain.
Business networks have gone a long way towards creating even greater collaboration between AP and Procurement. They have also altered the relationship, in a very positive way, between suppliers and their customers, giving them a level of control they might not otherwise have.
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