e-Invoicing - The 7 wonders of supplier onboarding
By Susie West
It still amazes me that there are companies out there that consider onboarding suppliers to their e-invoicing project themselves. Why would you bother? We all need stationery, but rather than set up a function to make folders within the business, we place an order with Lyreco don’t we? The same approach should be held when looking at e-invoicing.
I was chairing a Masterclass last month on ‘The Truth Behind Supplier Onboarding’. It struck me that 50% of the companies attending started the day believing they could do e-invoicing and supplier enrolment themselves. What was that figure by the end of the day? Before I share that figure with you, let me tell you about what The 7 Wonders of Supplier Onboarding are, which helped the delegates with the insource/outsource question.
Wonder No.1
Engage Procurement. If you only choose to take away two of these wonders, take away this one. Anyone believing they will see onboarding success and 85% invoice conversion without the support of Procurement is kidding themselves. Procurement own suppliers and therefore suppliers listen to them, not Finance! So ensure they are engaged early, and that they are involved in the evaluation of the project and the selection of the e-invoicing service provider. This will make a massive difference to the outcome of your project and could well be the difference between you converting 30% and you converting 80% of transactions.
Wonder No.2
Cleanse your supplier data. How will you tell your suppliers about the change in invoice processing? Well, you will most likely start your comms effort with an email or a letter. Which needs to reach the supplier! There is no point sending out a beautifully crafted letter for it to sit on the wrong desk for 3 weeks. So you need to make sure your supplier data is de-duped, clean and complete. It’s worth getting temps in to clean the data thoroughly and when they’re given an email address, to test it there and then. This will provide you with a good start to your e-invoicing project.
Wonder No.3
Have a very strong letter. This does not necessarily mean mandate e-invoicing, but it does mean: say what you’re doing and why you’re doing it, when you want suppliers to be live by, and what you want suppliers to do. And keep telling them. Letters without a compliancy date, or stating a gentle request will not be successful. E-invoicing is about change and this requires effort, so you need to have a strong approach. If you can mandate it, great!
Wonder No. 4
Have a consequence to non-compliance. To make a strong letter even more powerful, mention in your letter and communications programme that if suppliers don’t convert to electronic by the required date, they will suffer a consequence, ie payment terms will be extended, there will be a cost to process the paper invoice, or you may even stop doing business with them.
Wonder No. 5
Prepare Procurement for kick backs. Some suppliers will clearly dig their heels in. Imagine you are the supplier – you receive a letter from one of your key customers. Chances are you’ll want to hear it direct from your buyer. This is often the case with suppliers, and is the single biggest reason why suppliers delay onboarding. So have your buyer community ready to follow up the communications with all resisting suppliers. This is typically a phone call. Just make sure what your Buyers say on the phone is congruent with your overall project message and you have a single voice as a company.
Wonder No. 6
Know the cost to suppliers. This is key. Some service providers offer the service ‘free’ for the supplier. But always investigate this. If the service provider can take an electronic invoice file, but only in a certain format/choice of 5 formats, be mindful that there are many formats and versions of formats out there, and if the supplier doesn’t have the exact format type requested, they will need to configure their system. This can take one to 30 days and can cost £500 to £10,000. This can hurt the supplier and therein hurt your project success. So be mindful of the cost of change. Ideally you want a service provider that can take any file format. If the service provider has a ‘mapping’ function as part of their service (which means they create a unique map for every supplier), it means they really can take any format, and the supplier is saved from ‘tweaking’. So be aware of what the service provider charges the supplier, or what the supplier’s costs will be if the service provider is ‘format prescriptive’.
Wonder No. 7
Don’t attempt to do this yourselves! Your strength is in making cars, making plastics or making soap, not making e-invoicing work, so leave it to the experts. Service providers have made complete businesses out of this and have processes, tools and systems to support the complexities of supplier onboarding. They have trained supplier sales people, implementation people, programme managers and mapping people. It’s a service based on skilled people, so don’t attempt to create it internally unless you are looking to go into the e-invoicing business for real. When interviewing service providers make sure you ask them what percentage of their staff operate in the supplier onboarding function. You want the number to be well over 50%.
And the number of companies at the end of the masterclass which still thought they could do this themselves? One. A company which had already made the decision and investment.
Please print this article off and include it in your e-invoicing project pack. These are top tips which companies successful in e-invoicing have followed to the letter. Kellogg’s is one example and they have converted over 80% of their invoices to pure electronic as a result. Find out more about their e-invoicing story by attending our webinar in October. If you are based in the US join our E-Invoicing Readiness webinar on 5th November.
With thanks to Jo Harris, Programme Director at OB10 who ran the Supplier Onboarding Part 1 and 2 sessions at the e-invoicing masterclass.
