![]() ![]() ![]() “Just seeing an invoice electronically versus on paper doesn’t save money,” says Stewart McCutcheon, CTO with Elemica, a B2B exchange for the chemicals industry based in Wayne, Pa. But its customers, many of whom have received invoices via electronic data interchange for many years, had as their first priority getting copies of their shipping manifests online and being able to check the status of their shipments. The logistics company, which logged nearly $2 billion in sales last year, hopes to cut invoicing costs by 90 percent by switching to electronic billing. Jacquelyn Barretta, vice president of information services with Con-Way Transportation Services based in Portland, Ore., only began online invoicing in March after contending with mail delays caused by the anthrax scare. Customers using Air BP’s electronic billing and payment service, which is provided through Citibank, do pay faster, says Novaria, in part because Warrenville, Ill.-based Air BP and its customers can now identify billing mistakes before an invoice is past due.īut as with many e-commerce applications, it’s the purchasers of goods and services, rather than the suppliers, that are driving adoption. division of aviation fuel and lubricant seller Air BP. ![]() “It fit into the business climate that we’re in,” particularly after 9/11, says Bob Novaria, treasurer of BP North America and sponsor of the e-billing implementation project for the U.S. It may be a coincidence, but the technology started to flourish as the economy soured. Many EIPP software vendors market their products to financial officers of supplier companies with the promise of faster payments and, as a result, improved cash flow. But as more and more companies aim to eliminate paper from business payment transactions, it’s a challenge many CIOs will have to meet. Given that integrating systems and processes is one of the biggest challenges CIOs face today, EIPP can further complicate an already daunting integration picture. “Integration is where you get the direct savings,” says Judy Cavalieri, director of e-business strategy and marketing with AT&T Wireless in Redmond, Wash. The key to deriving the most value from EIPP technology is to integrate it with back-office applications like ERP, purchasing, accounts payable, order management and call center systems. John Hagerty, vice president with AMR Research in Boston, observes that EIPP vendors first concentrated on helping sellers generate electronic invoices and are only now writing code to help buyers load the data into their ERP systems for processing. For instance, the break-even point for bill recipients is less clear. From a survey of more than 100 U.S.-based corporations with at least $100 million in revenue, Avivah Litan, vice president and research director of financial systems for Stamford, Conn.-based Gartner, concludes that suppliers that bill their customers electronically can earn back their investments?and save an average of $5.7 million a year?if a mere 2.3 percent of their invoices are “viewed, paid and disputed” online.īut there are still many hurdles to overcome. Though companies have long known that they save money when they pay (or get paid) electronically, it’s the ability to manage invoices online that makes the business case. A year ago, TowerGroup, a market research company, predicted that by 2005, the number of business and consumer bills that will be presented and paid electronically will approach 5 billion world-wide, up from 60 million in 2001. Among the benefits: In addition to lowering invoice processing costs, companies can reduce billing errors, improve cash flow, provide better customer service, and obtain more timely and accurate data for analyzing how they spend money or sell their products. And it’s a trend CIOs need to pay attention to.Įarly adopters of these new Web-based financial applications, including AT&T Wireless, Con-Way Transportation Services and General Electric, have begun to achieve savings throughout the enterprise. For those companies that buy and sell goods or services online and use the Web to manage their logistics, electronic invoice presentment and payment (EIPP) technology?sending and receiving digital invoices?is the next logical e-business step. For most companies today, B2B transactions start and end with the purchase order?with billing and payment still largely done the old-fashioned way, on paper.īut many companies are increasingly seeing fully digital transactions?including invoicing?as the wave of the future to save money and improve efficiency. ![]()
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