In part of one of my post on the “cloud nine,” we looked at five key elements of a business network that will maximize the value of collaborative commerce. Here are the final four.
Manage cash better
The ability to process a clean, valid invoice in a few days over a business network allows you to capture all available early payment discounts as well as new, dynamic discounts, on a sliding-scale up to the invoice due date. You will find many new opportunities for early payment discounts, from the many cash-strapped suppliers transitioning from paper to electronic invoicing. Many of these suppliers will select an early payment discount term to help them better manage cash flow. And by combining a dynamic discount and payment terms standardization program, you can expand early payment discounts while maintaining or extending your Days Payable Outstanding (DPO).
Reduce business risks
A business network can deliver proven controls to protect against risks to your business, such as ensuring tax compliance and supporting country-specific, e-invoicing regulations. The ability to configure business rules at the country level and support digital signatures is especially valuable for global business commerce. Digital signatures are widely accepted by all tax authorities as proof of authenticity and integrity for e-invoicing. This assurance of compliance can’t be underestimated. If you learn that an e-invoice process you relied on lacked adequate controls a year after the fact, you could potentially be liable for a year’s worth of taxes on transactions and the substantial penalties that go with them.
Ensure value for both trading partners.
Providing value to suppliers as well as buyers is another critical feature of a business network. In addition to e-invoicing over the network, suppliers can leverage a business network to deliver e-catalogs to their customers, generate e-invoices from contracts and service entry sheets, view invoice and payment status, take advantage of early payment opportunities from a web portal, and use the network as an e-commerce channel to develop new business opportunities. To help drive suppliers off paper to an electronic process, leading providers such as Ariba have a team of supplier enablement experts and self-service tools to automate the enablement process for any supplier anywhere in the world.
Deliver a closed feedback loop.
Last, but not least, a business network should provide a closed feedback loop, where you can capture detailed information on invoices and payments and share it with your sourcing group for future analysis and negotiations with suppliers. The substantial additional cost savings from this process is often not considered when developing a business case for invoice automation.
To probe these topics further and help you better understand the business advantages as a networked enterprise, I invite you to attend a Shared Services Link (SSL) webinar sponsored by Ariba:
How to Close the Loop in Source-to-Settle
Tuesday, September 30, 3pm to 4pm BST – 10am to 11am EDT
The webinar will share results from an SSL research survey on procure-to-pay operations and how you can close the loop in your source-to-settle process. For more information and to register, click here
Interested in learning more about developments and trends in the networked economy? Join the discussion in Conversations on the Networked Economy.