B2B transactions can be a primary source of potential friction within a company. However, businesses are increasingly discovering solutions through collaboration. When suppliers, buyers, and solution providers collaborate, they are working together to remove friction from the end-to-end P2P process.
Strengthening the Buyer-Supplier Relationship
This past year has seen an acceleration in the technology that provides a platform for companies to interact with suppliers and their customers. Working together to implement solutions that provide value to both the buy-side and sell-side of the equation, buyers and suppliers achieve insight to working capital that was not previously possible. The main reason is visibility. Collaborating primarily through digitization, buyers and suppliers — with platforms provided by third-party solutions providers — are able to instantaneously organize and access account information. The total cost of the buyer-supplier relationship is no longer only about the pricing of goods and services. It’s about the pricing and processing of transactions.
Building the Digital Supply Network
Digitization has the power to transform that relationship, but only if the parties work together to apply what they learn from the data. A digital supply network between buyers and suppliers accumulates data on crucial elements of the P2P cycle, like the status of invoices and supplier payments, procurement pricing, payment terms, and discounts. Reams of supporting data and documents validate the transactions, in addition to providing connectivity among buyers and suppliers that makes it easier to streamline how buyers and suppliers “talk” to one another.
Additionally, one of the major barriers to collaboration has been the pre-existing business siloes within a company. Procurement, finance, and accounts payable have tended to follow their own agendas and pursue their own goals. That has often worked at cross-purposes to overall corporate goals and initiatives. But, thankfully, these silos begin to dissolve when the entire purchasing cycle is brought online.
Understanding the Value of Collaboration
And it’s not just about the obvious benefits of minimizing complexity in the P2P cycle, such as controlling purchases — and indirect spend, specifically — centralizing accounts payable data and eliminating data errors. Everything that comprises the P2P cycle, from POs to invoices to payments, is now capable of being done electronically. Collaboration enables businesses to focus on the ease of doing business overall, in order to foster better and stronger B2B relationships — relationships that are based on the fact that each stakeholder has an investment in ensuring the process works quickly, efficiently, and accurately. The power of organized and accessible data that results from collaboration empowers decision makers. Armed with the data they need regarding their businesses’ upcoming profitability and expenses, they can make the decisions that will build their companies’ growth and success.