Electronic Cash News

Most companies desire to have automated information exchange with their suppliers. This is especially true in the area of paying supplier invoices. Besides saving on administrative labor, companies also have opportunities to take advantage of supplier discounts and proactively manage working capital. There are four stages to Accounts Payable (AP) automation: manual, tactical, collaborative, and working capital.

Manual Solution: centralized, manually process and approve invoices

Tactical Solution: OCR, document and approval workflow, online reporting

Collaborative Solution: Outsource, automated matching, online dispute / resolution

Working Capital Solution: 100% electronic invoice (EDI / information exchange), supplier self-service, integrated purchase-to-pay processing

See SDCExec.com article, Emerging Payment and Discount Paradigms in the Supply Chain for more information

I always say that half the challenge in succeeding in business is having a good contract in place with your customers and suppliers. There is a good podcast (Contract Management -the Next Level of Procurement) out that talks about the other half with suppliers: realizing the savings with a contract. It is easy and I think quite common for a procurement office to award a contract and then put out an internal announcement that they saved the company so many millions of dollars. In reality they have not saved the company any money yet. The real savings comes with the proper execution of the contract. That is where you need to track and have contract metrics to measure the actual savings as they occur. If you do not, you are sure to have revenue leakage.