Expert briefing: Can tech help suppliers with the problem of portal proliferation?
What do companies do when they get asked by their customers to invoice them via their portal? Sounds good, sounds like digitisation is coming on apace, and e-invoicing has been a boon for digitisation. But it’s no fun when you have many thousands of customers, and they all want something different. What are the answers?
When we look at source-to-pay solutions, we tend to look at it from one side. That is, how this is going to improve the accounts payable department, reduce cost, be more efficient and improve supplier collaboration?
But then I hear quotes like this ...
“Our customers [suppliers] hate their clients [having multiple] e-invoicing providers. They get the calls from Coke or Kraft, who say, “Hey, you can now send invoices to us through our portal (in fact, that’s the new policy if you want to get paid)." But if you [suppliers] have 20,000 customers, you are busy with debt collection, especially now. And now you have to go from your billing file and pull the 200 invoices manually that need to go to an array of e-invoice providers and get them into a portal because your customer requires it.”
Increasingly, small businesses are getting overwhelmed with too many portals to log into for invoicing. A survey done by APEX Analytix found that 60% of the supplier respondents had to log on to 10 or more portals every month and 10% log on to more than 50. And 40% said that portals had increased, rather than reduced, their department's workload.
I wrote about this [in June 2015], Are Too Many Supplier Portals Causing Companies Headaches? As more payers (buyers) force companies to use portals to upload invoices to get paid, the number of portals that companies must deal with proliferates.
Hope but no quick answers
Are there any technology solutions? Perhaps, but there is no real quick fix.
- First, large companies that purchase from thousands of suppliers can use RESTful APIs [a Representational State Transfer application program interface (API)] that uses HTTP requests to GET, PUT, POST and DELETE data on their supplier portals. Large buying organisations are increasingly publishing APIs for various functions. For example, SAP is increasingly enabling procurement organisations to use internal transaction and catalogue data to build reports, check status, fetch catalogue data, etc. into a data warehouse or application, combine it with other organisational data, and build custom reports. Another example is to provide access to supplier data to get a list of all suppliers with registered, qualified or preferred status for a specific category, region and business unit. But all this is for internal cost and effectiveness. Being able to extend that to enable companies to send external data via API seems doable.
- A second option is to use a billing consolidator to automate the delivery of invoices to various portals. There are a number of order-to-cash software specialists that are integrated to AP portals, including industry verticals, specific portals for spend categories like transportation, and horizontal portals. Customers integrate with the order-to-cash vendor and send them a ‘Bill To’ file, and the vendor extracts invoices going to the different portals automatically with no manual intervention.
- Another option could be using bots that could be used to log into AP portals to extract data needed for billing.
- Perhaps there is even a blockchain solution here, where encrypted invoices can be uploaded to a platform that integrates with the necessary AP portals. Right now there are several companies that are working on blockchain-based infrastructure to solve the SME liquidity gap, and they could develop the API library to integrate without all the development overhead.
Is all of the above wishful thinking? Perhaps, but portal proliferation has been an issue for some time, and right now, if you are not using a billing consolidator and have not taken the time to integrate, you are using headcount.
This also has implications for if and how you take early pay discounts offered by these various portals. If a company has two full time equivalents devoted to manually connecting to portals (logging into to portals, uploading invoices, etc), do they have authority to take discounts if and when they occur?
What is valuable from a seller’s perspective as we increasingly digitise is both to be able to automate buyer portal integration and to have a single view of all the various buyer finance programs you work with and all the currencies that you settle invoices. This would be a powerful cash flow planner.
Additional thoughts or comments progress are welcome.
David Gustin is the chief strategy officer for The Interface Financial Group responsible for digital supply chain finance and is a contributing author to Trade Financing Matters where this article first appeared.