© GT Nexus, Inc.

How to Optimize the Management of Supplier Orders and Invoices with Processes that Automate Three-Way Match and Payment

Drive Supplier Payment Automation

A STRATEGIC IMPERATIVE FOR MANUFACTURERS

As manufacturers deal with a greater amount of suppliers from regions around the globe, it becomes more diffi cult to pay supplier invoices by manual processes. The traditional three-way match of invoice, order, and receipt of goods becomes tedious and ineffi cient when supply chains involve a large network of suppliers. Relying on external parties to manage document fl ow often results in low supplier satisfac-tion levels due to late and inconsistent payments.

Companies fi nd it diffi cult to optimize working capital in this situation. If they attempt to extend payment terms to increase days payable, suppliers suffer from liquidity constraints — often leading to strained relationships and inability to ship goods on time. Manufacturers need a way to automate sup-plier payment and use exception-based management to catch discrepancies in the fi nancial supply chain.

Impact of Poor Supply Chain Finance When payments are not made on time or in the right amount, suppliers are left unhappy and possibly unable to meet the demands of the next purchase order. Companies that are still using traditional systems to manage payments in a complex,

global commerce environment will experience signifi cant problems:

Invoices and shipment documents that do not reconcile to orders

Incorrect shipments delaying payment to suppliers

High volume of support calls due to limited invoice status visibility

Lack of effi cient ways to provide a three-way match between order, invoice, and receipt

Overall supplier dissatisfaction due to delayed payments

The Root of the Problem

Supply chains today involve many global participants, with most data lying outside the four walls of a single enterprise. Manufacturers are struggling to reconcile payments with out-of-date systems and many partners.

1. Frequently changing orders

When demand for products changes frequently and sup-plier order tracking is a manual process, manufacturers encounter:

Unreliable information

Lack of audit trail on changes

Reactive and hectic approach to gathering data

2. Complicated and outdated three-way match process

When paperwork is often late and incomplete, documents are not compliant with orders, and managers must go through a manual receipts matching process, several things can happen:

Supplier dissatisfaction

Overpayment for items not shipped

Inability to accurately predict cash fl ow for all parties

© GT Nexus, Inc.

2

Companies struggle to effectively collaborate with suppliers on orders, shipments, and invoices. This creates complex and ineffi cient processes.

The Challenge

The manual process for matching order, invoice, and receipt is not suffi cient in a complex, global supply chain with a multitude of stakeholders.

Ack

Ack

Receipt

Invoice

Invoice

Consignee

Out of Sequence

Manual Matching

Approval Delays

Order

Payment

Order

Order

BankBank

BuyerBuyer

SellerSeller

Consignee

Receipt

Plant

Plant

NetworkConnectivity

Agility

Customers

Customer

DC / Warehouse

Plan

Actual At-Risk DelayDynamic ETA

B

A

Sense more accurately

Operate more efficiently

Respond faster

Make better decisions

3

The SolutionDealing with supplier invoice payments becomes much easier in the cloud. Suppliers and fi nancial institutions are brought onto a single platform, using an exception-based system to automate payments.

In the cloud, orders are updated automatically across all supply chain partners. Invoices will match the latest order, and pay-ment to suppliers can be made on time. Automation causes better buyer-supplier relationships and more accurate forecasts for inbound cash fl ows. It also eliminates costly letters of credit and may greatly reduce bank fees. Financial documents are standardized and instantly available to all relevant players in a manufacturer’s supply chain network.

Automate three-way match and payment to suppliers on a cloud-based platform.

Collaborate with suppliers, logistics providers, and banks on order and invoice documentation

Automate electronic payment process from end-to-end

How to use it to automate payments:

1. Manage DPO and cash position

2. Speed up payment reconciliation and approval

3. Collaborate on line exception management and resolution

4. Avoid overpayments by matching invoice with actual receipts and POs

Value PropositionsAutomation of supplier invoice payment on a cloud supply chain platform can help improve sup-plier relations, optimize working capital, and reduce fees and ineffi ciencies along the fi nancial supply chain. Manufacturers can benefi t in the following ways:

1. Reduce cost with improved supply chain document compliance

Improve supplier payment visibility and management

2. Reduce supplier payment costs

Centralize access to bank payment and trade services

Enable suppliers to accelerate receivables through invoice discounting

Inject liquidity to suppliers through pre-shipment fi nancing

Use bank or self-funding sources

3. Improve cash management through accurate cash forecasting

4. Free up working capital by improving payment terms

5. Improve supplier relations; gain higher levels of satis-faction and retention

Supplier Invoice Payment Automation and the Networked CompanyTo automate supplier invoice payments and standardize documentation, companies must transform themselves from silo-based, inward-facing corporate operators to intercon-nected, highly agile business network orchestrators.

Manual payment processes are rife with error and delay; only with cloud technology can documents be standardized across suppliers and used on an exception-based, automated system.

In the cloud, orders, supplier invoices, and receipt are all reconciled automati-cally; supply chain partners collaborate in an exception-based process.

Purchase-to-PayAutomation

Self-InvoicingOperation

Trade DocumentManagement

ExceptionCollaboration

Receipt

PaymentAproval

Order

Consignee

BankBank

BuyerBuyer

SellerSeller

Consignee

Invoice3-WayMatch