Its tricky to define the exact cost of invoicing in your business, but general market data points to a net invoice price of between £6 and £15 per invoice. More and more businesses are now accessing cloud based platforms to generate invoices and some are going further with invoice validation and automated payment tools.
Why reducing your number of suppliers means a reduction in invoicing costs
Having a large supplier base can make things more complicated than needs be, especially where suppliers issue different invoices for different service lines. All this adds more cost in resources, administration and system costs.
Finance departments usually have to deal with far too many suppliers. Often for one off purchases, new suppliers are created on a regular basis. Having to manage this large pool of suppliers is time consuming and inefficient.
Consolidating your suppliers reduces the number of invoices and saves money on payment processing costs. It also frees up your teams to be productive in other key areas and allow your business to become much more efficient.
Structure better contracts to reduce invoicing costs
You may have multiple suppliers dealing with areas of your business that could be consolidated to one supplier. If you are buying recurring services which attract multiple invoices, you could restructure your contracts into a managed service, with a defined statement of work and only one invoice per month (or service period).
Below are some of the benefits for your business:
- If you reduce suppliers, you could have one contract to cover (for example) all of your Facilities Management costs rather than separate companies for cleaning, maintenance, catering etc. This means there will be one point of contact in your business, one invoice to one company and reduced administration costs.
- One well defined contract allows for transparency and clear requirements and solutions for your business. Poorly defined contracts are difficult to manage effectively, and make it difficult to ensure you’re getting good valuefor money.
- By having less suppliers to manage, there is much more time to focus on your strategic procurement and you unburden your internal stakeholders from the workload.
- Supplier consolidation means you can re-negotiate your contracts, consolidate your requirement, make costs savings and lock in future pricing.
In summary, less suppliers combined with better contracts means less invoices and opportunities for cost savings.
Athena Commercial specialise in cost savings for your business. Please get in touch to discuss how we can help you.