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6 Ways to Build On Your E-Invoicing Program

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Susie West
Mar 18, 2025

You’re rolling out e-invoicing. Either you have to, because of a country mandate, or you want to, because the business benefits are so obvious. You work with Procurement and Accounts Receivables on the plan and the scope…

And now there is a very handy opportunity to be seized upon as you onboard your eco-system. While you’re asking suppliers to onboard, why not optimize that important “talk time” to improve the purchase-to-pay process even more?

Some ideas could be:

1.    Consolidate your Supplier base: Great idea. As we exist and grow, our supplier base balloons. Companies generally assess the growth of their supplier bases periodically rather than real-time.

When the assessment period rolls around, the level of expansion can come as a surprise. (“Wow – we went from 12,000 live suppliers to 16,000 in 6 months!”) It keeps things tidy to consolidate and helps with governance, purchasing power, risk mitigation, and cost reduction.

2.    Standardize Payment Runs: Even an established shared services will have multiple payment runs across a region, say Europe. A history of acquisitions, or country-specific requests, may have encouraged this. If you can move suppliers onto standardized payment runs so they are paid during a run that happens once a week or twice a month, this is ideal for the Buyer. But be careful not to frustrate your Supplier (see next bullet).

 3.    Standardize Payment Terms: Buyers take heed – this is where you need to be very careful. It’s great to use this time to standardize payment terms, but do so with consideration. If your terms are 30 days and you think it sensible to improve working capital a bit and increase your Days Paid Outstanding (DPO) to 40 days – or, more commonly, 45 days – let your suppliers know this is happening and communicate with care.

You would be asking your suppliers to float what is technically their money for an extra 10 to 15 days, and this could hurt a supplier.

Recently I was asked to onboard onto Ariba by a client. Historically, my payment terms had been 14 days. While onboarding, I was told my payment terms would be extended to 70 days.

A moment on this: The words “Hang on – that’s not right” looped on repeat for hours. The client was suggesting that, by agreeing to these terms, I wouldn’t see my money for an additional 56 days. That’s almost 2 months of float. That’s not right. 30-day terms I can live with. 45 days at a push, but 60…? No way. 70? You gotta be kidding me. Just no.

I have some friends on LinkedIn so wanted to ask them if I was being unreasonable, and should I acquiesce?

·      7% said yes – agree to the 70 days

·      44% said no – push for 14 days

·      49% said meet in the middle – agree on 30 days

(130 votes – thank you, voters!)

Responding to the 70-day request, voters remarked “too long,” “unreasonable”. John Dickens, Head of Transition at Kantar, commented, “Receipt terms are fraught with risks for all sides. In these days of electronic emailing I can see how easy it is to confirm it was sent but not so easy to confirm it was received. Best receipt of invoice terms I’ve seen were contractually phrased as “Payment terms will commence on the confirmation of receipt, by the contractually identified recipient, of a clean and accurate invoice that is deemed fit for payment.”

Martin Creese, Finance Business Partner – Inbound and Outbound Logistics at Jaguar Land Rover, commented, “The cash flow impacts for changing terms by 30 days can really be profound for those smaller suppliers along with the knock on impact on those businesses’ cash flow and liquidity . Whilst you can argue it is just business there is an ethical angle around whether you are doing the right thing by your suppliers and trading in a way that encourages a growing partnership within supply chain, rather than purely transactional one.”

4.    Third Party Risk Assessment and Scoring: While onboarding suppliers to your e-invoicing program, it’s a great time to run due diligence on each supplier to understand risks and suitability. sharedserviceslink is running a webinar with John Lewis in April which reveals how John Lewis Finance Ops is leading the management of 3rd Party Risk with the help of Coupa.

3PR is owned and governed by Procurement, but the management requires features that shared services excel at. Shared services operate at scale and set systems up to continuously check. These are two operational characteristics required for solid 3PR management, according to Chris Darlington, Global Process Lead S2S & Finance, John Lewis.

5.    Improve Your PO Rate and More Spend Under Management: Control and Visibility are two key words for shared services in 2025. If you’re buyers are buying from supplies that are not approved or preferred, this needs to change because this maverick behavior compromises your company’s ability to reduce cost, mitigate risk, and leverage supplier relationships. The more spend you have under management, the higher your PO rate. And the higher your PO rate, the higher your straight-through-processing and touchless rates will be across Purchase to Pay (P2P). This makes all the difference to a Finance Shared Services organization and will affect nearly all P2P and AP KPIs.

 6.    Onboard Suppliers to Your Discounting Program: Driving an early payment discounting or dynamic discounting program reaps savings between 1% and 3% the total value of in-scope invoices. Accounts Payable need to be able to process the invoice quickly and pay quickly in order to take the discount. John Lewis has an average invoice-to-post cycle time of 4 days, which means a discounting program is achievable. If you’re reaching for the classic “2% discount if paid within 10 days net 30,” and your average cycle time is 11 days, you have a little work to do to speed up your cycle.

 

Efficiency gains in P2P abound. And if you’re running one onboarding program with your suppliers, it’s ideal to maximize the moment, and weave in other programs. But don’t overwhelm. Seek your savings, but not ruthlessly. Remember suppliers are your partners and they are people – look after them. It’s not always just about the profit.


Upcoming webinar - John Lewis: E-Invoicing Enables 7 Finance Super Powers

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