One of the challenges with Electronic Data Interchange (EDI) and Business-to-Business (B2B) is enabling small suppliers to exchange electronic business documents such as invoices and purchase orders. To exchange business documents, either electronically or paper, between small suppliers and large businesses costs a lot for both parties. Every paper invoice or purchase order has a lot of administrative overhead. Enabling a small supplier to exchange electronic documents with a large business is costly in terms of recovering the start-up costs and on-going costs in comparison with the low volume of transactions per supplier enablement.
What if a third-party offered B2B integration for free for small suppliers and businesses?
Potential Solutions for Enabling Small Suppliers to Exchange Electronic Documents.
There are several promising third-party solutions that offer the promise to lower the overall cost of enabling small suppliers to exchange electronic documents. See example third-party solutions below that offer free solutions for small suppliers and businesses and potentially lower costs for large businesses to enable electronic document exchange with small suppliers.
- Tradeshift. Danish start-up Tradeshift has launched a free e-invoicing platform for small suppliers and businesses. They feature EDI integration, ERP integration (SAP, Oracle), and open APIs. For their business model, their revenue will come from companies with 250 + employees and government agencies. I would also guess they would have other revenue opportunities as their user base grows.
- BillFLO Anoowa, a U.S.-based company offers billFLO an electronic B2B invoice presentation system that interfaces with businesses’ accounting systems for accounts receivables and payables. For sellers (small suppliers and businesses) this solution is free. For buyers they have a 30-day free trial. If buyer receive five or less BillFLO invoices a month, it stays free for both the buyer and the seller. This solution works by the seller using BillFLO to send and track computer readable, electronic invoices from their accounting system to buyers that use BillFLO to receive electronic invoices that are then imported into the buyer’s accounting system.
The Benefits to Large Businesses With Using a Third-Party B2B Integration Solution That is Free for Small Suppliers.
Many large businesses and Governments should be attracted to this type of service offering as they are already directly or indirectly paying for the B2B integration (or lack of it) for small suppliers and businesses. There are many large companies (like Wal-Mart) that give “free”, proprietary B2B integration software to their suppliers. Other large businesses that do not help with enabling their small suppliers are indirectly incurring higher costs by either being burdened by paper-based document exchange or their small suppliers pass their B2B integration costs (either internal IT or 3rd party VANs/service providers) on to their large customers through higher prices.
