Turn on the Power in Finance/AP Shared Service Part Two
Business networks have become the Net 2.0 solution for commerce collaboration challenges. Business networks connect your existing back-office systems to all your suppliers regardless of their size, volumes, location, or technical sophistication.
Often times a single connection from your ERP/Finance systems to a business network can connect your company to all of your suppliers and allow you to exchange catalogs, purchase orders, invoices, dynamic discounts, payment remittance detail, and much more.
Leading business networks today include supplier portals that allow your suppliers to maintain their own contact and even bank routing information. This not only improves the timeliness and accuracy of vendor master management, it also reduces inbound supplier inquiry calls into your Accounts Payable and procurement staff asking about invoice or payment status.
I’ve talked with Finance Shared Service leaders who said they’ve been able to reduce their inquiry staffing requirements by over 70% with the use of a business network supplier portal.
It is these kinds of progressive Finance and AP leaders that are transforming AP into a far more strategic function:
- A leading oil and gas producer in the central U.S. has driven over $1.5 million in early payment discount savings within the first year of their e-Invoicing program.
- A global leader in oil and gas drilling and distribution has achieved over 98% touchless processing of electronic invoicing using a “smart invoicing” approach that eliminates errors and exceptions at the point their suppliers submit the invoices.
- The world’s leading water treatment company has improved customer relations, sales revenue, and working capital by reducing their invoice cycle time creating a win-win-win with their customers and suppliers. They’ve been able to reduce their DSO by about five days.
- A leading shipping and distribution company is saving millions of dollars by capturing pre-negotiated contract savings through electronic contract invoicing. They estimate that they are saving about $4 million for every $1 billion of spend under contract by matching e-invoices with contracts.
This kind of innovation is really turning on the power of Finance and AP organizations. Check out my blogs and follow me on Twitter (@jbtucker3) as I continue to explore ways in which companies are extending investments they’ve made with their ERP and finance solutions using business networks. You can also join me in an upcoming free webinar on this topic: