As a business, getting your invoice paid on time is a matter of good courtesy to your buyer. Everyone will agree on that. But in order to pay on time, suppliers need to make it as easy as possible for their buyers. And that starts with submitting an e-invoice.
The first reflex after the outbreak of the corona crisis in the Netherlands 2.5 years ago was one of great solidarity. People shot into relief mode en masse, and companies selflessly offered their services. But just a few weeks later, this sentiment among some companies had already tilted. So much so, that the purchasing association Nevi together with MVO Nederland made a publication about it.
The article states that some companies are taking advantage of the situation to extend payment deadlines substantially or even suspend all their payments until further notice. A few also dare to demand a hefty discount on their invoices. This is often done without any consultation. They announce it bluntly, via letter or e-mail to their suppliers.
Improper, Nevi and MVO Nederland believe, and disastrous for many suppliers. They sometimes have to wait as much as one hundred and twenty days for payment instead of the standard sixty. Nevi and MVO Nederland believe that it shows short-term thinking to go purely for one's own business in this situation and pass on problems to suppliers.
Companies with good decency
Poor payment behavior, however, is not unique to the corona crisis. The problem has been around for much longer. The Internet is full of articles and social media posts about and from suppliers who have to wait a long time for their money. The corona crisis only reinforces this trend. Because of all this negative reporting, I feel called to jump into the breach for once for the group of large companies and multinationals that do pay on time or are trying incredibly hard to do so.
For example, more than 60 large companies have joined the Betaalme.nu initiative. These companies have each drafted a manifesto on how they contribute to timely payment to their SME suppliers. Thanks to the participation of these companies, some 283,000 suppliers are currently paid on time as required by law and contract.
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Equally important are the efforts made by ambitious companies and institutions in the area of automation, a basic component for processing invoices quickly and error-free. Indeed, large companies receive a large volume of invoices. We are easily talking about several hundred thousand incoming invoices per year. Manual processing is really not an option.
After all, with these volumes, the traditional process of scanning and validating PDFs with an optical character recognition solution is time-consuming and error-prone. Incomplete information (for example, a forgotten VAT or Chamber of Commerce number) or errors on the invoice (for example, an incorrect amount) means longer processing time to retrieve the correct information. Not to mention line information is lost because often only header-level scanning is done.
E-invoice
To process these incoming invoices quickly and error-free, these organizations have invested in processes and technically advanced software systems. However, just having a system implemented does not shorten the turnaround time. For the system to work optimally, it is necessary for buyers to receive invoices digitally. Only with an e-invoice (not a PDF via e-mail) can these invoices be automatically coded, validated and even approved.
So dear suppliers, it may seem cheaper to stick with the old and familiar PDFs, but it is not, nor does it lead to faster payment. With e-invoicing, one hundred percent of the data is correctly and immediately recognized and processed. An additional advantage is that the invoice always arrives at the correct address. An e-invoice directly from the financial or ERP system is therefore really preferable for both buyer and supplier.
Readiness
What we see in practice especially among SME suppliers is that they do not know what is meant by an "e-invoice" nor where and how to submit the invoice. And why should they suddenly start invoicing in a different way? They already send PDF invoices via email; that's already digital, right?
In the wholesale market, we unfortunately encounter organizations that do expect their own suppliers to send e-invoices, but are unwilling to do it themselves for their own customers.
Many vendors think this is difficult, but there are several simple and very affordable accounting/billing programs on the market that allow you to send e-invoices, both for large and small businesses.
Alternatives
If this fails, there are other options available. In turn, the buyer does have a responsibility to make it as easy as possible for the supplier to offer multiple options for converting invoices to e-invoices. Think for example of a shipping (network) connection.
Even for companies that have no automation capabilities at all, there are solutions. For example, the use of a supplier portal where, on the basis of a purchase order that has been submitted, the supplier is asked to approve it and then it can easily be converted into an invoice that can be presented to the buyer as an e-invoice (also called PO-flip). If there is no purchase order underlying it, the supplier can also enter the invoice itself in such a portal.
Admittedly, the latter solution may not be entirely ideal, but it does lead to the desired end result: faster invoice payment. After all, without using the portal, invoices would have to be processed manually.
Taking steps yourself
Suppliers themselves can take a number of steps to get paid faster. Therefore my appeal to all suppliers who regularly get paid late: see what you can do yourself to speed up payments. Read up, download a white paper, subscribe to newsletters, talk to your peers, broaden your knowledge about e-invoicing.
In short, do some research. Where is the delaying factor? Have a conversation with your buyer. Improve paymentbehaviorstart with yourself. Don't you want to talk to each other? Yes, then we can have that discussion about good decency.
Want to know more?
Together with Graydon, I conducted a webinar on corporate payment behavior. You can watch it back here. Of course, you can also contact me directly.
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Ronald den Hartog |
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