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Can you make e-invoicing work financially with low volumes?

BlogSarah Feurey09.07.2012 Comments (0)Bookmark

Electronic invoicing, Finance shared services, Purchase to pay


Scott Turkington of Scottish Water was one of our speakers at Toning Up Purchase to Pay to Attain Touchless Processing. His story was an interesting one. Because his team only processes about 100,000 invoices per annum (seemingly low volumes for an e-invoicing programme), he initially didn’t consider e-invoicing as a solution. However, two years ago, he was introduced to an e-invoicing network at a sharedserviceslink.com conference and started thinking differently: e-invoicing could be an option after all.

As a utility, Scottish Water’s business goals were to:

  • Ensure continuity of service

  • Improve customer service

  • Protect the business from financial shocks (i.e. costs during droughts)

To see if e-invoicing could help him achieve these goals, Scott developed a detailed analysis. He recognised the benefits of a fixed-cost network fee, a lower volume of manual invoicing, and a reduced risk of service failure.

So it looked like there was a business case on his side (the buyer side) regardless of the relatively low volumes. The unanswered question however was, was there a business case on the supplier side?

To address this, Scott sent out a survey to 60 key suppliers asking “What is your company’s cost of printing, sending and tracking a paper invoice to your Scottish Water?”

The results were insightful:  

Less than £1 26%
£1 – £2 52%
£2 - £3 16%
More than £3 6%

 

 

 

This meant that 68% of suppliers spent between £1 and £3 to send a paper invoice.

This helped Scottish Water to realise that even if the supplier was charged an acceptable fee for e-invoicing, a business case existed on the supplier side.

Scottish Water went ahead, using OB10 as their e-invoicing provider. According to Scott, here are the results:

  • Productivity increased  of 30% year on year

  • PO compliance increased to 99%

  • Payment on time reaching 96%

  • Invoices processed electronically reaching 42% (aiming for 60% next year)

These are impressive results. Scott’s secrets for securing the above include:

  • Engage early with your suppliers, buyers, IT, and procurement department. Anyone who has direct contact with suppliers should be able to reinforce the fact that this is coming. They should be well versed in the benefits of enrolling.

  • Secure strong internal project management and ensure people understand drivers and goals of your project.

  • Bring in suppliers to discuss the business case and understand the risks. Scottish Water was very open and shared their business case with service providers to make them prove they could deliver value and reduce risks.

  • Tailor your supplier communications - they are not ‘one size fits all’. Sit down face to face with your top 5 suppliers and let them know e-invoicing is coming and explain the process and benefits. Communication methods included: webinars, supplier relationship meetings, phone calls letters and emails.

  • Motivate your AP team. Scottish Water had a team who were process- focused, cared about development plans, drove compliance, understood the process and made it work. These are not easy tasks, and it is essential to keep the team motivated through this challenging time.

So to summarise, can you make e-invoicing work financially with low volumes? Scottish Water has.

What about you? Do you have a similar story?

e-invoicing, electronic invoicing, einvoicing, purchase to pay, business case

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