Collaboration between local and foreign companies have become seamless and easy now more than ever before. Thanks to the advancements in technology, local companies and foreign enterprises can easily partner with each other and reap the benefits of international collaboration like addressing transnational or global problems and sharing techniques and skill with each other.
But as foreign and local companies become more collaborative, it’s important that processes remain cost-effective and organised, which has become a problem for many companies with manual processes and under-optimised processes. Because of this, companies insist on upgrading their operations to be more automated and for supply chain processes to have a more holistic approach.
Process Automation and the move to digital format
Local companies in Singapore, especially small-medium enterprises (SMEs), who have global partners are slowly adapting electronic communications to improve the quality of data transfer between them and their overseas partners in a bid to improve their business relationship. On top of that, many SME companies are moving away from paper documents and embracing the digital formats to better optimise processes in the supply chain as they deal with international trade partners.
As technology further promotes business growth and international collaboration, the overall business operation is headed towards full electronic optimisation. According to The Paypers report “B2B Fintech: Payments, Supply Chain Finance & E-Invoicing Guide 2017: Insights Into The B2B Payments, Supply Chain Finance And E-Invoicing Market”:
“Nowadays, companies insist on operations that may result in the cost reduction and process automation… Therefore, there has been a growing demand for solutions enabling onboarding of partners worldwide, exchanging the whole set of messages in the supply chain (order-to-cash / procure-to-pay) and guaranteeing legal compliance, project management, and local support.”
E-Invoicing As Support To Supply Chain Optimisation
Of the numerous documents that go through a business process, the invoice is one of the most important.
Invoices are needed in order for businesses to get paid for their goods or services while providing legal protection for both the client and service provider. An invoice notes the name of both the buyer and seller, description of the goods/services, and total amount due. It also helps keep track of payments due and help support your income in case of an audit by government revenue bodies.
But manual preparation of invoice is very costly and prone to error. This can lead to heavy expenses, especially for SMEs. According to a special report by AP & P2P:
It costs 39 percent of businesses more than $6 to process a single invoice, the Institute of Finance and Management (IOFM) reports. But those costs are the tip of the iceberg. Paper-based and semi-automated invoice processing and disbursements create hidden costs that chip away at profit margins
Because of the large expenses and human error of preparing manual invoices, companies are looking into e-invoicing as an optimal solution to the problem. Not only to reduce costs, but also to reduce lag time in supply chain operations
“Automation has a big impact on the cost of invoice processing and disbursements. Automation delivers an average reduction in invoice processing costs of 29.2 percent, AIIM reports. A 29 percent reduction in average invoice processing costs translates into savings of approximately $300,000 per year for a business that processes 10,000 invoices per month at an average cost of $10 per invoice.“ The special report adds.
Automation of invoices helps better cash flow and expenditure management, resulting in better optimisation of working capital and day-to-day operation. This, in turn, supports the supply chain cycle by reducing administrative tasks with receiving, reviewing, and disposing of paper invoices.