Enterprise Software and Cloud Computing Blog

Free Electronic Transaction Benefits

Nathan Joyes |

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In my last post, I talked about how you can use electronic transactions to Negotiating Prices like the Big Guys.  The concept is to improve efficiencies for suppliers and share those costs savings.  Although the supplier benefits may justify the use of electronic transactions, it’s interesting to note that there are also a wide range of potential benefits for your member companies that come for free, creating a true win-win scenario.  Let’s look at how electronic transactions could benefit your member companies.

Electronic Catalogs

Those that have made the transition to electronic catalogs are already enjoying the benefits of being able to access, search and share product and pricing information more efficiently.  But when all your authorized suppliers provide catalog information, it takes the member benefit to a whole new level.  Now your members have the ability to search and compare product and price information from multiple suppliers at the same time.  Anyone who has searched for products and compared prices using paper-based catalogs will appreciate the time-savings of a consolidated electronic catalog.

Electronic Ordering

As margins get tighter, suppliers are increasingly reducing staff on their order desks and putting pressure on member companies to order online from the suppliers’ websites.  The challenge for members is to break their comfortable routine of calling the order desk and take the time to learn the online ordering system.  The issue is that the ordering process is different on each supplier’s website.  When you provide a single site that members can use to order from all approved suppliers, it makes the transition much easier.  An online ordering site can also be used to highlight quantity discounts and track returns for things like damaged goods.  

Electronic Invoicing

In addition to getting all supplier invoices in the format and method of their choice, members can enjoy other benefits of electronic invoicing when used in conjunction with electronic ordering.  For example, duplicate invoices can be automatically rejected when the system identifies that an order has already been invoiced.  For less severe issues, like pricing or terms discrepancies between the order and invoice, warnings can be added to the invoice to alert the member.

Electronic Payments

When a member is able to select all invoices to pay from all suppliers, it makes it much easier to manage cash flow and take advantage of early payment discounts.  For groups that are set up for central billing, members no longer have to wait for their next purchase from a particular supplier to take advantage of credits.  They can simply apply the credit from any supplier to their centralized payment to head office, for an immediate improvement in cash flow.

Free  Money

Just in case all those free electronic transaction benefits are not enough for your members, you may be able to offer them free money.  When you consider all the supplier cost savings that I identified in my last blog post, you may be able to negotiate passing some of those savings along to the member companies in the form of product discounts or rebates.  The benefit of free money speaks to members in any language!

Are there other electronic transaction benefits for member companies that I have missed?  Leave your comments below…

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