You’ve seen it before at the grocery store--the separate line for self-checkout, where you skip the line, bag your own groceries and pay electronically.
Pretty convenient, right? Well, imagine you’re a small business and you either 1) Have a question about an invoice, 2) Want to know the status of expected payment, 3) Want to ask to be paid early, or 4) Need to notify your customer that your preferred method of payment has changed. Also, imagine that you’re only able to complete these tasks between the hours of 9-5, Monday to Friday. When running a small business feels like a 24/7 job, how do you find time to take care of these activities?
That’s where a supplier self-services solution comes in. With a supplier portal, a company allows its suppliers to log onto a web-based platform--no matter what time of day it is--and complete multiple business-related tasks:
Check their invoice status
View payment status
Update their own information (VIM/SIM)
Dispute messaging to interact and communicate more effectively
Send Advanced Shipping Notices (ASN)
Receive rich remittance information
Communicate real-time with the buyer
A supplier portal allows your suppliers to be self-sufficient, while saving you the time it takes to answer phone inquiries and manually key in data.
What are the pros and cons of having a supplier portal?
While the pros might seem obvious, recent research revealed:
Suppliers want invoice and payment visibility. In IOFM’s recent webinar, they discovered the top complaint among suppliers is lack of visibility. A self-service portal helps suppliers answer their own questions, becoming more efficient, productive and effective.
A typical AP department can expect inquiries from 3-15% of their invoices volume, and 60% of these inquiries are in regards to invoices that are already paid. If you’re processing 100,000 invoices annually, you can expect anywhere between 3,000-15,000 inquiries/year, and 11-55 inquiries a day. Of these inquiries, between 1,800 – 9,000 are about invoices that are already paid. To resolve these inefficiencies, a supplier portal automatically sends a notification when an invoice is approved or payment is processed, giving your suppliers peace of mind knowing payment is on its way. You’re also saving them (and yourself!) time from having to call about the status.
Supplier portals can eliminate up to 80% of inbound inquiries. If your AP department spends 3 hours/day answering inquiries, that’s 15 hours/week total spent on communicating with suppliers. Implementing a supplier self-services portal would free up 12 hours/week, or 648 hours/year.
What is the value of a supplier portal?
To calculate how many resources you will be saving with a supplier portal, multiply the time per query (in hours) by the cost per hour, number of queries per day, and 250. Finally, compare that to the cost of a portal.
• Time per query (in hours)_____
• Cost per hour $____
• Number of queries per day _____
• 250 work days per year
= Annual Cost of Queries $____
Portal cost $____
Remember, the value of a portal is directly related to the adoption among your suppliers. The more suppliers enrolled in your portal, the higher ROI you’ll achieve.