Honey, I shrunk the invoices
I have a buying organisation that has asked me for information on what savings could be achieved by a supplier if they removed paper from their order to invoice process.
The buyer has data on their before (paper) and after (no paper all electronic) costs.
Why the sudden interest? Ordinarily a buyer is focussed on what their savings are and making sure they achieve that at the smallest cost to them, often that is achieved by putting costs on the supplier. When a supplier presents an electronic invoice I can process that at a fraction of the cost of a paper invoice and the supplier meets the cost to create that electronic invoice. Honey, I've shrunk the cost of our processing our invoices. But at what cost to your suppliers?
This blog has previously dealt with the debate: who pays and how much?
If, and it is a big IF, we had transaparency and an agreement between between buyers and suppliers as to what they recorded as savings from replacing paper transactions with electronic transactions then would that change things?
For example, buyer records savings of £5 and supplier records savings of £2. The savings for either could not have been achieved without the collaboration of the buyer and supplier so should they share the resulting benefit equitably? In this case buyer pays supplier £1.50. Now we have an incentive in place.
Last thought: Don't call you boss Honey, at least not without a lawyer present.
eProcurement - SMEs get it but?
So what is the but?
According to an article published by FT.com:
For small and mid-sized companies (SME) outside the IT industry, running IT infrastructure is rarely a core competence. All too often it is an area – and a cost – that senior management feels it cannot control.Click here to read the article and what it proposes SMEs do.
It is a fact that SMEs have some challenges if they are to participate in eProcurement; meeting the costs to set up the technical infrastructure for sure and knowing that there is going to be a benefit to the business.
But consider: if you didn't have the challenge of buying, building and maintaining IT
and you had control over costs
and there were no risks to the business would the decision for you to participate in eProcurement be easier?
What's changing that makes that decision easier?
Click here to find out
eProcurement boost for SMEs
SMEs are often referred to as the lifeblood of the UK economy.
They may not be always on the leading edge when investing in IT and we have discussed this in past blogs.
Click here for a refresh on why that is.
Some recent research identifies that some of the benefits of eProcurement are specific to the SME community. These include the following:
•
Competition with any other supplier, regardless of their size – any supplier with access to the internet is now on a par with even the largest suppliers.• Being strategically valuable, as it helps them to win other business elsewhere.• Receiving payment more quickly as there is less of a paper chase at the buyer end.• Business does not need to be limited to one geographical area.• Removal of some of the process costs associated with supplying to government.This is good news for SMEs but they still need the tools to equip their business to be a player.Click here if you are a SME
Click here if you a Buyer and have SME suppliers
