How to Convince Your Suppliers to Adopt e-Invoicing
You’ve implemented e-invoicing. You’ve enacted Accounts Payable automation too. Still, there’s one missing part to make your digital payment ecosystem complete persuading you’re suppliers to adopt electronic invoicing. How can you persuade your sellers to implement electronic invoicing and ditch paper invoices once and for all? Well, show them the benefits. You see, organisations reluctant to adopt e-invoicing often cite the anticipated supplier’s hesitation to comply as the main reason to continue receiving/sending paper invoices.
This means that persuading your seller they’ll reap significant benefits by sending e-invoices is a huge step toward achieving 100% supplier adoption.
First, your suppliers need to understand they equally stand to benefit, especially if the e-invoicing solution includes a supplier’s portal.
What is a Supplier’s Portal?
For starters, a supplier portal is an internet-based, self-service interface that enables you to automate invoice submission. It also allows your suppliers to track invoice status and see payment information round the clock. The portal lets suppliers know which invoices have been received, invoices routed for approval, invoices held as exceptions, and the ones already submitted for payment. With a portal in place, suppliers don’t have to call your AP department, resulting in an improved relationship with your trading partners. Also, the portal gives both parties the info they need for better cash flow management.
With all these benefits, why do your suppliers resist adopting and implementing e-invoicing? Well, the thing is, people naturally fear or resist change. But for suppliers, there is more than meets the eye.
Why Are Your Suppliers Hesitant to Adopting e-Invoicing?
These are several barriers that may lead to supplier indecision regarding e-invoicing, including:
Many suppliers don’t want to pay to send their invoices. Coerce them into that situation, and they’ll opt to continue sending paper invoices. Note – some supplier e-invoicing solutions require the suppliers to pay a predetermined percentage of spend or a flat monthly fee. Still, suppliers prefer a model where they’re not paying.
– Technical Implementation
Hardware, training, e-invoicing software – suppliers don’t want to incur these expenditures. Many suppliers – especially those still comfortable submitting paper invoices – see these as unnecessary expenses meant to bloat their budget.
– Human Contact
Some people just like to interact with other people one on one. If you’re dealing with such a supplier, it’ll be hard to convince them that they need to automate their invoicing process.
Still, there’s a way around supplier’s resistance to electronic invoicing – choose a solution that creates value for your sellers. Put differently, recommend an e-invoicing solution that your suppliers want to use, even if it means making a couple of changes here and there.
Choosing an e-Invoicing Solution for Your Suppliers
You can convince suppliers to adopt electronic invoicing by picking a solution that:
– Charges a Reasonable Fee to Suppliers
As stated, few sellers are willing to pay to use an e-invoicing solution. So, when evaluating a service provider, make sure that there are no charges to suppliers. And if there are fees, ensure they’re negligible and affordable to the supplier.
– Simplifies the Process Change for Sellers
When your supplier is a small and medium-sized enterprise (SME), they may not have enough resources to overhaul their entire accounting system. Change for them is expensive, and they might not be able to implement e-invoicing fully. However, you can help your sellers bridge the gap. Offer them an option to send PDFs by choosing a solution that allows you to convert PDF invoices to e-invoices automatically. You can onboard them to full electronic invoicing with time. The idea is to reduce your onboarding rates while allowing your suppliers to derive the benefits of e-invoicing with the least interruption to your seller’s processes.
– Creates Universal Value for Sellers
It is important to make sure your preferred e-invoicing solution offers a convincing and easy-to-understand value proposition.
You need to show your suppliers that your shift to e-invoice will actually provide value and that the change will be worthwhile.
So, choose a solution that makes it easy for the supplier to get started. Also, ensure that the provider offers insights into their e-invoicing process while highlighting benefits your suppliers couldn’t get elsewhere.
Also, make sure that the solution lets the suppliers leverage early payments without limitations or obstacles.
– Caters to Different Types of Suppliers
Your suppliers aren’t the same. Different suppliers are dealing with different challenges and circumstances.
So, when introducing them to e-invoicing, it would be best to approach them individually. You should avoid sending a blanket email recommending your electronic invoicing provider.
Instead, call or send them an email advising how and why they should partner with a provider that offers customized solutions as per their needs.
– Offers Value to Internal Supply Chain Stakeholders
Account Payable doesn’t have to shoulder the burden of bringing sellers onboard single-handedly. In fact, your vendor can offer 100% support by leveraging their expertise and resources to convince your trading partners to adopt e-invoicing.
Procurement can also chip in, especially because they interact with your suppliers more often.
Ensuring an Even Stronger Supplier e-Invoicing Adoption
You may have found the right e-Invoicing provider for your suppliers, but you’ll have to do a couple of things to ensure maximum adoption.
Analyze Your Spend
Before you introduce electronic invoicing to your sellers, you’ll want to evaluate your spending first. That way, you can pinpoint ideal candidates for e-invoicing. Some of the things to look at include:
- Payment value
- The number of transactions per supplier
- The percentage of corporate spending the supplier represents
- Your contractual agreement with the supplier
- How the supplier responds to the idea of e-invoicing
The supplier’s strategic importance
You can review your spending with your electronic payment solution to identify suppliers that can quickly join the bandwagon. For instance, suppliers that already accept virtual card payments from other businesses are more likely to adopt e-invoicing than their counterparts that don’t.
– Segment Your Suppliers
The data you gather from reviewing your spending will allow you to categorize your suppliers. That way, you can determine how to approach each one. Segmenting your suppliers also allows you to work with procurement and Accounts Payable departments to develop onboarding strategies for large-ticket, contracted, and one-time suppliers.
As many as 85% of businesses still send and receive paper invoices.
But, with the adoption of e-invoicing picking up pace, these businesses will struggle to gain a competitive edge over their counterparts already sending and receiving electronic invoices.
Convincing your suppliers to take up e-invoices will streamline the payment process for both parties and make it easier to archive and trace financial records.
While e-invoicing may do everything you want for your business, none of that matters unless it offers value for your sellers too.
After all, the most valuable business network for buyers is also the most valuable for sellers.
Ready to introduce your suppliers to electronic invoicing? Schedule a consultation session.