We are often asked about vendor invoice processing using a vendor portal. There are many different ways of automating the exchange of vendor invoices which leads to a certain amount of confusion as to how you should solve this business problem. The reason that invoices are more complex to manage than, for instance, purchase orders is that purchase orders are created in a system that you control while invoices are usually created in your vendors systems.
Since the invoices often originate in your vendors system, the complexity is in providing a means for them to transmit those invoices to you as well as to convert the invoice data from their format into your format at one end or the other of the transmission.
There are several ways that your vendors can transmit the invoices to you. Some common methods are: Direct FTP file exchange or the use of web services and the older Electronic Data Interchange (EDI). Files can also be uploaded manually using the functionality of our vendor portal, presuming that your vendors can provide the invoice data in the correct format.
Another way that your vendors can provide you with an invoice is to take a purchase order in the portal and “flip” it into an invoice. This “flipping” is a function in the portal that creates an invoice that mirrors the PO line for line and provides entry fields for the vendor to make any modifications based on specific quantities shipped etc.
There is one other way to deal with invoices presuming that you have a purchasing system that can support evaluated receipt settlement (ERS). ERS modules generate pre-matched vendor invoices within your purchasing system based on the purchase order prices as well as the amount of goods received. These invoices can then be extracted from your system and presented to your vendors for confirmation in the same way that you would send them a purchase order.
You will usually need to provide several of these methods to your vendors to allow for their different technical capabilities.
There are many ways to automate your Purchase Order processing. Often people look to solutions that add automatic faxing or emailing capability to your purchasing system. While these solutions do remove the need to manually print and send your purchase orders to your suppliers, the process stops once the purchase order is sent. There is no provision for the management of the purchase orders outside of your organization or the processing of information coming back from your suppliers.
In this article, I will review some of the benefits that you can realize by using a proper “2-way” communication system such as the B2B Connex Supplier Portal. An on-line supplier portal not only displays the purchase order detail, but also provides the ability for the supplier to make change requests or attach additional information by accessing your system using a browser.
How often have you lost track of the status of a purchase order that you have sent to a supplier? When an order is faxed or emailed, there is no way to ensure that the supplier has received it without a manual follow-up. When a delivery is late, you may find out by running report from your ERP system, but again, any expediting would be done manually.
With a “2-way” communication system, your suppliers would enter their order confirmations electronically when they receive their orders. Any order that hasn’t been confirmed within a few days would be flagged by the system and expedited electronically. There is no way that an order could “slip through the cracks”. In a similar way, orders that are not fully received or shipped by the required date would be flagged and expedited by the system without any manual intervention.
Delivery Date Confirmation
With a “2-way” communication system, suppliers are asked to confirm delivery dates with their electronic order confirmation. They are also given the opportunity to inform you of changes to those delivery dates right up to the time of shipment.
While changes to delivery dates for an order are never desirable, providing a means of tracking the changes and updating your ERP system electronically will lead to more accurate production and maintenance schedules.
Price Change Requests
Similar to delivery dates, your suppliers can be given the opportunity to confirm the prices on a purchase order at the time of order confirmation. In fact, when done electronically, an acceptance of a purchase order by your supplier is their guarantee that the price is correct. If it is not correct, they have the ability to request a new price when confirming the order rather than waiting until it is time for the invoice.
This means that there should never be a difference in the price on a purchase order and its related invoice. This can eliminate invoice match problems. Also, by managing this process electronically, you never have to worry that price changes negotiated verbally or by email will be lost before they are entered into your ERP system.
Evaluated Receipt Settlement (ERS)
Once you have eliminated invoice match problems, you could be ready for the next step – Evaluated Receipt Settlement.
ERS is the process of auto-generating supplier invoices within your ERP system based on the quantity of received goods and the purchase order price. This can only be done if you are sure that the purchase order prices are correct. Once the invoices are auto-generated they can be sent for payment without requiring that your supplier send you an invoice. This eliminates all of the manual tasks of receiving invoices and entering them into your system. It also removes the need for your supplier to create and send their invoices to you.
Procurement professionals that belong to the Purchasing Management Association of Canada will be attending a show October 22-23 2010 Beyond 2010: The Future of SCM located in Toronto, Ontario Canada.
David Kuehner, President of B2B Connex has been selected to discuss hidden savings in your supply chain.
Many people consider purchasing to be an overhead expense. However, the automation of your purchasing processes can have a big impact on costs, cycle times, and the accuracy of price data. There are several ways that manual processing can add to your overall costs. Inaccurate pricing can cause invoice match problems, incorrect delivery dates can cause maintenance scheduling problems, rekeying RFQ data can introduce errors in your vendor data that will cause recurring purchase order change requests until the data is corrected. One way to solve these, and other problems, is to implement a “2-way” vendor communication process that will control the distribution of Purchase Orders, RFQs, and other purchasing documents to your vendors, as well as to control the communication of price, delivery, and other critical information from your suppliers back to you.
Registration for the event is relatively inexpensive and is still open to those that are interested in meeting B2B Connex and learning more about achieving savings within purchasing.
What savings have you been able to extract from your supply chain?
1. Include attachments with a PO sent/received via the supplier collaboration portal. Attachments may include specifications, check lists, diagrams, etc. These attachments may be in the form of a Word document, Excel spreadsheet, JPG, BMP, VSD, etc.
2. Include add-on information with a PO sent through the supplier collaboration portal (e.g. FOB information). This feature is of particular importance with material purchases.
3. Vendor to confirm/acknowledge a PO through a supplier collaboration portal, resulting in a subsequent update to the ERP PO to indicate it was confirmed by the supplier.
4. Vendor to suggest changes to a PO through a supplier collaboration portal. Critical changes include Price, Quantity and Delivery date, Terms and Conditions.
5. Vendor to easily review the orders sent to them and the Purchase Order processing status (e.g. Changes accepted, under review, cancellation, etc.)
6. Easily review the orders being managed via the supplier collaboration portal, and the Purchase Order processing status (e.g. Changes accepted, under review, cancellation, etc.).
7. Accept PO changes proposed by the Supplier, resulting in the creation of an ERP PO Change Order to facilitate PO updating.
8. Reject PO changes proposed by the Supplier.
9. Buyer and the supplier to negotiate PO changes via the supplier collaboration portal until such time as the buyer accepts (most important) or rejects them.
10. Audit trail of accepted and rejected changes be maintained to provide tracking of all communications between Buyer and the Supplier. It is also desirable for proposed changes to be tracked
Are there features missing on this list that you would include? Please feel free to comment and provide your suggestions
Thanks again to our friends at Sourcing Innovation. They have recently posted a new article about B2B Connex and our latest shopping cart product which provides your customers an easy to use store front to place orders without the need for contacting a sales representative.
About B2B Connex Store Front
Sales Order Acknowledgements
Sales Order Acknowledgement history is maintained online so your customers can review current and historical orders. This information can be verified and accepted prior to production to ensure there are no misunderstandings. In addition, a change notification is sent to the customer to keep them informed when your scheduling updates the delivery date. Keeping your customers in the loop means that the information that everyone needs is available when they need it.
Advanced Shipment Notices
Once a shipment is complete an ASN can be sent to the customers receiving contact to inform them of an imminent delivery.
Invoices are also delivered to the customer Accounts Payable contact using the portal.
To read more about Sourcing Innovations review of B2B Connex https://blog.sourcinginnovation.com/2010/07/29/b2b-connex-automating-the-endtoend-purchasing-process.aspx
For a demonstration please contact us at 1 (866) 317-1951
How to add efficiency to the procurement department without requiring your suppliers to implement EDI
- Pricing, delivery and any other negotiation are easy to work within the B2B Connex supplier portal
- Automatic expediting of a purchase order based on business rules defined per supplier, per plant location
- Revision control over B2B documents exchanged
- Viewable worklists to highlight areas of priorities
- One document source to work with, no knowledge of different standards required
- Images of products and engineering drawings and msds are available for the supplier to confirm product specifications which in turn improves supplier quality
- B2B Connex requires no middle service like a VAN (value added network) to exchange business documents
- Invoice matching is a reduced or totally eliminated by using B2B Connex
- Works easily with smaller trading partners. Typically trading partners needs infrastructure to handle EDI communications
What are your experiences with implementing EDI with smaller trading partners?
The following describes a typical purchasing scenario between buyer and supplier with the B2B Connex Supplier Portal
1. The supplier is notified by e-mail
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2. The supplier easily navigates from the e-mail to the B2B Connex Supplier Portal application
3. The supplier views the new PO and decides on the appropriate action
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4. The supplier may request negotiable changes as required. Negotiations can be completed on a price, quantity and delivery date
5. The buyer sees the supplier’s response on a work-list
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6. The buyer views the request for a change
7. The buyer acts on the request, and accepts/rejects the change
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8. The purchase order change is sent back to ERP from the Portal
The B2B Connex solution provides a simple and easy to use supplier portal to help facilitate a 2 way negotiation between a supplier and a buyer. The solution provides everything a buyer needs to communicate with suppliers while removing:
– telephone calls
Additionally, the B2B Connex supplier portal provides a process for tracking PO fulfillment and an audit trail of activity, available for reporting.
Thanks to the PurchasingB2B magazine for providing a recent article called “Bye-bye, busy work!”. The article provides details behind one of our customers experiences with the B2B Connex vendor portal.
You can find the article on the B2B Connex vendor portal here https://www.canadianmanufacturing.com/purchasingb2b/features/strategicsourcing/article.jsp?content=20100603_094906_13976
During the writing of this article, B2B Connex will soon provide new functionality to help extend and support your supplier quality initiatives including the 8D process.
What to look for when researching a supplier portal solution:
1. Remove common barriers of communication like lost emails/phone calls
2. Provide robust reporting and supplier metrics
3. Allow all suppliers to collaborate in a easy to use interface without the need to update supplier infrastructure
4. Provide the ability to negotiate on delivery dates, and price if required
5. Remove processes that don’t add value, such as trading purchase orders
Have you reviewed your purchasing and quality processes? What parts of the process would you like automated?
Thank you for visiting the new B2B Connex web site. B2B Connex is the number one B2B portal solution that easily allows you, your vendors and your customers to track purchase orders, invoices, vendor scorecards, sales orders and any other document that you want through the web.
Here you’ll find more information and news about the B2B Connex web portal solution, company news, upcoming events and new features of our product.
Please feel free to follow us on twitter (https://twitter.com/b2bconnexportal). We’ll also be adding an RSS feed so that you can follow our blog as well.
For a free supplier communication evaluation, please contact us (www.b2bconnex.com/contact-us).
When the Burlington, Ont. company he worked for as chief technology officer went bust, David Kuehner saw value in its Supply Chain Management Software. He secured its rights and now, two years later, a new company known as B2B Connex is ready to make another go of it.
Kuehner said the old company was primarily a consulting business, and didn’t really want to become a software product company. He saw potential, though, in the supply chain management software that had been developed with a number of the company’s clients.
“In purchasing, a company needs to be able to communicate a purchase order to a supplier, and in the past that was mailed, but now it is probably faxed or e-mailed,” said Kuehner. “Those are all good solutions, but they don’t, I think, go far enough.”
After he acquired the rights, Kuehner spent two years working with a pair of primary clients to improve the application, a Web-based tool for purchasing and supply chain management.
The application sees purchase orders posted to a Web server, with the supplier notified by an e-mail with a link to view the order in their browser. Data entry, such as a request for a price change, can be done on screen, and if approved, the change is automatically fed into their backend systems, such as an SAP enterprise resource planning (ERP) suite, reducing the error potential that comes with manual data entry.
“The big benefit is things are done correctly and they’re not lost,” said Kuehner. “We’re making the communication between a company, and both their suppliers and customers, smoother and more accurate.”
One of the long-term customers Kuehner worked with closely during B2B Connex’s “under-the-radar” period is Briggs & Stratton, an international engine and machinery manufacturer based in Milwaukee.
Art Nelson, IT business process lead, product lifecycle management with Briggs & Stratton, said the previous firm hit his radar screen three to four years ago when they were looking for a Web-based tool to communicate with their maintenance, repair and overhaul (MRO) vendors.
“We had looked at three or four different solutions, only to realize that most of them were very expensive and very complicated,” said Nelson.
He said B2B Connex’s application was relatively inexpensive compared to the other competitors because it offered just the capabilities that were needed and was focused on their business needs.
The application is being used at 10 Briggs & Stratton plants across the U.S., and by 20 external vendors. By communicating with vendors via the Web rather than by snail mail or by fax, Nelson said information is received more quickly and they’re more confident that it was received.
By feeding information into the company’s backend systems electronically, including matching purchase order information and fulfillment with invoices, Nelson said the company’s accounts payable department has become comfortable enough to pay vendors electronically, which has allowed the company to negotiate better prices.
Nelson said Briggs & Stratton has been working closely with B2B Connex to improve the product, and a number of their suggestions have been incorporated into the tool.
While Nelson said he did look at making alternate arrangements when the old company was going out of business, including a consideration around acquiring a copy of the source code in case they needed to maintain it for themselves, Nelson said Briggs & Stratton has been very satisfied with the software’s performance.
“As long as B2B Connex is still with us and still maintaining the system, we’re very happy with staying there,” said Nelson.
Kuehner said he’s not surprised that companies have stuck with B2B Connex’s software suite through a few years of limbo, saying that while it’s nice to be able to buy from an industry giant, there are some niches where the big guys just don’t play.
“When you’ve got this kind of a new product, it’s recognized there’s no one that’s been selling this kind of thing for 10 years, so it’s going to be a newer startup,” said Kuehner. “Some people are concerned, and they’ll only buy from Microsoft or IBM, but then they won’t get the latest and greatest.”
Now, though, Kuehner said B2B Connex is ready to take the suite to the wider market.
Call us now at 1-866-317-1951 / 1-470-819-3662 or contact B2B Connex to learn more. If you have any questions, please feel free to ask!