As I look at payables and invoicing case studies from both software providers and banks, I’m becoming more convinced than ever that discounting and EIPP solutions are capable of delivering perhaps the most important type and level of value today across the procurement spectrum. Consider, under ideal circumstances, how solutions such as these can:
- Help companies significantly reduce transactional costs and improve accuracy (in some cases coming close to all but completely eliminating the transactional resources required to run A/P)
- Get cash in the hands of suppliers more quickly (with flexible sources of early payment financing: treasury, bank, non-bank third-party etc.)
- Provide a means of engaging suppliers of all sides in a manner of invoicing and payment that fits their needs based on size, sophistication, etc.
- Provide a means to identify and stop potential fraudulent activities
- Automate payment and VAT documentation (both inter- and intra-country) and provide a line-item level accounting for such activity
- -/+ numerous potential other benefits
Yet it’s rare that invoicing and EIPP solutions enable all of these benefits at the same time — especially across an extended supply base. Perhaps most disappointing of all has been the uptake of discounting capabilities, where even in the best of cases only a small minority of suppliers ever take a company up on its offers either because of technical or process limitations or due to other, often vendor-specific circumstances. Software providers and banks love to tout their discounting case studies, but I’d challenge anyone to step forward and show a situation where they’ve been able to achieve a greater than 3% discount acceptance/penetration across their entire supply base (versus just a demographic or regional subset)…