Supplier Enablement

B2B eCommerce is in error; sonny got that wrong!

The B2B eCommerce agenda: work smarter not harder, reduce costs, increase productivity and reduce errors.

Eroors? Whet errorrs?

What is the cost of an error? If your suppliers’ invoices has errors on it then that causes work for you and your supplier to resolve. These errors demand a disproportionate allocation of resources to resolve. This is counterproductive to the Number 1 aims of B2B eCommerce: to reduce costs.

So, perhaps our implementation of eProcurement/eInvoicing should consider how we aim for the error free processing of invoices.

What is the origin of these errors?

They could be originated by your supplier in information passed to a buyer that is then used to to create a purchase order. These errors work there way out of the system over time as they are corrected. Even so, errors in purchase orders prevent suppliers from processing those orders resulting in delays to customer and lengthening the order to invoice cycle for the supplier. That is a cost to both buyer and supplier.

They could be made by the supplier during the handling of the purchase order and input into their system for processing. Errors are common during manual entry of data and they perpetuate in all related documents that rely upon that entry of data. For example, if the customer PO number was EYO990 and that was entered as EU0990 by the supplier then that error will perpetuate through to the creation of the associated invoice if it remains undetected.

The buyer receives the supplier invoice complete with incorrect PO number and then is unable to post this.

One error has created a problem that now needs to be resolved by both buyer and supplier. Actually, the supplier is more inconvenienced as their invoice could reasonably be disputed and payment withheld.

The error-free way.

Buyer creates requisition/purchase order based on supplier information either from an electronic catalogue or from punch out web site.

Buyer sends electronic purchase order to supplier

Supplier receives electronic purchase order and imports this into their system for processing. The system performs validation checks against customer and products ordered before allowing the order to be accepted for processing. No manual data entry has occurred and no errors are introduced. We now have a clean sales order for processing.

Supplier now processes the order and creates electronic documents for internal use and for despatch to customer. Internal documents would include a Pick Note. Documents for the customer would include a GRN and invoice. The supplier now creates an electronic invoice and sends this to the customer.

Customer receives electronic invoice, reception is automatic and it is automatically processed based on a two or three way match. As the customer has not intercepted the invoice nor performed any manual data entry there is no scope for the introduction of errors.

Error free processing is achievable but it does depend on eliminating manual data entry and having supplier content that can be relied upon to create requisitions/purchase orders.

It also requires the end-to-end integration of buyer and suppliers systems to eliminate the need for manual data entry. The reality is that few have achieved this and the cost and technical complexity are two good reasons.

WHAT IF: you could have end-to end integration with suppliers without making any new investment in hardware or software or changes to your or your suppliers IT systems. Would that change things for you and your suppliers?

Click here to request a demonstration of error free eCommerce.

posted by FrankB @ Thursday, October 05, 2006