B2B is shifting as technology becomes ever more present in daily transactions. For many companies, linking with suppliers and tracking everything from invoices to payment status can still be time-consuming and even tedious activities, mired in paperwork and phone calls. PYMNTS spent time talking to Vishal Patel, senior marketing leader of Tradeshift’s industry solutions operations, to find out how real-time e-invoicing and other digitally driven processes can make the supply chain run a bit more smoothly.
As a platform Tradeshift connects half a million buyers and suppliers globally. Suppliers, however, can join in for free. What are the drivers behind this decision, and how has it helped your businesses?
VP: From the very beginning, Tradeshift wanted to remove any barriers that prevent buying organizations from successfully connecting to a majority of their supplier network in order to facilitate digital transactions and interactions.
One of the major barriers has been supplier fees, both participation fees and per transaction fees. In fact, in a recent report by Hackett Group, 65 percent noted that the top challenge for enabling e-invoicing solutions is supplier fees from the software provider. We decided early on to make the platform free for suppliers, and we were the first to do this.
The results have been fantastic. We’ve seen superior supplier onboarding rates, among the highest in the industry.
When companies think about innovation, payables is not typically an area considered strategic to their core mission. First, do you agree with this statement, or do you have evidence to the contrary? Second, what are the consequences of this type of thinking?
VP: First, I think that there is room for every process and every function to innovate, especially as we quickly move into an era of digital business.
Payables is, in our view, a central part of any trading relationship and at the same time an area that is too often inefficient and error-prone.
For Tradeshift, payables was — and continues to be — a way for us to help our customers connect to their suppliers, by onboarding them onto the platform for payables automation. Once all the suppliers of an enterprise are onboard and connected, we provide various capabilities that allow buying organizations to manage all their supplier interactions in one place, whether it is e-invoicing, supplier information management, dynamic discounting, e-procurement and even supply chain processes.
Given that payers have been paying in a certain way for years and suppliers have been paid a certain way for years, is there inertia in B2B payments?
VP: I think there has been tremendous inertia over the last couple of years on the technology side of things, multiple electronic payment providers, new payment methods, new card offerings, B2B networks and even banks providing payment solutions.
However, there is a lot of work to be done from the enterprise side in terms of moving towards electronic payments and off checks (at least in the U.S.). This is changing, and payments will continue to move towards electronic [processes]. It’s not a fast transition, but I’m sure it will begin to accelerate in the near future.
Who is ultimately responsible for the vendor enablement process?
VP: For our customers, we are responsible for enabling suppliers, from the largest to the smallest. We’ve had great success there with our innovative approach to onboarding. We use a combination of modern marketing automation and event-based triggers to drive our onboarding efforts.
The Tradeshift platform makes it very easy for suppliers to onboard. They onboard without really thinking they are onboarding. When a supplier sends their first invoice (via email/PDF), our platform converts the PDF electronically and asks the supplier to validate the information. Through that process there is progressive registration, and then subsequent invoices and transactions are all handled online.