First, it’s important to set concrete goals. For example, consider goals such as, "I want 50% of my incoming invoices to be delivered digitally in one year" or "I want to receive only digital orders by 2024.” These goals may seem broad, but it’s important to establish your company’s individual goals and needs for growth.
First, the Low-Hanging Fruit
The next step is to engage with customers or suppliers about your ambitions. During these conversations, it’s essential to outline what the goal is, why it’s important, when it must be achieved by, and what resources are needed to achieve it. The message you want to emphasize here is: “We can only digitalize if you also digitalize.” However, it’s advisable to pick out the low-hanging fruit and start with the largest customers and suppliers. It’s also important to have research done into how much they are already able to digitalize. This could look different for different companies, but one example might be if they've already adopted digitalization practices for exchanging documents with a few specific customers or suppliers.
The biggest area of improvement in terms of digitalization is at the intersection of invoices and orders. The most obvious place to start is digitalizing invoices, then orders, and finally invoice-order-related documents. Consider a timecard from a temporary worker. The operational benefits for both supplier and buyer include reduced processing time and faster payment.
Breaking the Impasse
We won’t lie; aligning customer and supplier processes can be easier said than done, but luckily there are standards in place to help facilitate the task. For example, European standards regulate what data needs to be in an invoice, so if both parties adhere to this, it’s possible to prepare both ends of the system accordingly, whether it concerns an incoming or outgoing invoice. Standards like this one help because they only need to be applied once to all customers and suppliers, eliminating the need to change it every time for each trading partner.
Sometimes customers have a particular supply platform that they feel their suppliers should connect to, which can get in the way of the necessary standardization when suppliers push back and, in certain cases, demand additional compensation for this effort. To break such an impasse, it’s important to return to the original goal and explain why that goal is so important to both parties. When it comes to e-invoicing, it’s crucial to keep in mind that every company will have to deal with it by law at some point in the next four years.
At TIE Kinetix, we get excited by the success stories we hear from our daily practices. One good example is Plus Supermarkets, which has almost completely digitalized their store inventory purchasing processes. This can be credited to the use of standards and a thorough informing and onboarding process for suppliers. Another success story comes from the public sector, where the municipality of Amsterdam has now achieved more than 60% e-invoicing, which is quite an achievement given they have as many as 16,000 suppliers, ranging from small to large companies.
Finally, TIE Kinetix would like to emphasize how important it is to get started on digitalization projects as quickly as possible. We often see reluctance in mandating a tool like e-invoicing because it’s still thought to be unnecessary, or of fear that suppliers will be unwilling or unable to adopt these practices. However, the urgency is there, and it’s important to advance past these uncertainties.
Moreover, the fear that suppliers cannot or will not keep up with these technological developments is unfounded. Five years ago, this may have been a valid concern, but today it simply isn’t. We know this partially because the government is already making e-invoicing mandatory. Suppliers are more and more used to these developments and often find the connection to the desired platform effortless. It’s even possible to have testing done in advance for a selection of suppliers to see if they already have the ability to send e-invoices. When it comes down to it, nothing stands in the way of companies taking full advantage of the opportunities of digitalization.