The process of creating paperless offices has advanced enormously in most larger companies, but a major hurdle is still suppliers–often smaller concerns that have not developed electronic invoicing capabilities and still use old-fashioned paper catalogs to describe their products and services. Now Basware Corp., a leading purchase-to-pay software provider based in Finland, is launching Basware Connectivity that aims to remedy that problem.
The new product allows buyers to make purchases via a Basware portal, which suppliers can access free in exchange for sending electronic invoices, says Robert Cohen, Basware's director of marketing. Smaller suppliers still using paper invoices would be able to either key invoices in on a pay-to-use portal or have them scanned in by Basware and forwarded to the buyer.
The "pay as you go" system offers an advantage in the current era of tight budgets, says Esa Tihil?, Basware's senior vice president of global operations, who says that cost savings estimates for both suppliers and buyers range from "70% to 90% by switching from paper to electronic transactions."
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Nigel Rayner, an analyst with the IT research firm Gartner Inc., agrees with Basware's projections. "Typically, companies don't get more than 40% to 50% of their invoices electronically," he says. "What Basware is doing is making it possible to move that up closer to 100%."
Potential savings extend beyond just handling invoices, Rayner says. "For suppliers, sending invoices electronically means they get validated faster and that they're more likely to get paid on time. And for buyers, especially in the U.S., where the practice of discounts for early payment are common, buyers are more likely to get those discounted prices. They may also be able to negotiate better discounts with larger suppliers, who will know that they'll be getting paid earlier automatically."
The switch to more electronic payments should also be good news for risk managers and internal auditors, suggests Tihil?. "We've designed the whole system to have all the controls that risk managers and auditors want," he says. "And the audit trail and rules are adaptable. For example, if the company has a budgeting system and has ordered a 10% cut in a certain department's purchasing budget, once that limit is reached, further purchase orders can be flagged for approval before they can go out."
"Everything that happens on this system is auditable," adds Cohen. "It will cut auditing time by more than 50%."
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