Last year, Coles said it had reduced its payment terms to 14 days for businesses that supply the supermarket giant up to $1 million worth of product.
To make that happen, electronic invoicing is key.
We know that cash flow headaches can stem from long payment terms, which in some circumstances can even cause businesses to go to the wall.
In fact, MYOB research found late payments were causing 35 percent of small business owners to delay paying their own expenses such as rent and electricity.
The sooner businesses can be paid for the products and services they provide, the better, as it helps them maintain a strong business position.
“We understand how important cash flow is for small suppliers and shortening payment time will help make it easier for them to run their business,” said Coles managing director John Durkan.
However, large retailers are also using e-invoicing solutions to get paid faster and this means implementing this technology drives benefit in both directions along the supply chain.
As an example, The Reece Group has recently integrated MYOB’s online solutions into its business management system, thereby allowing customers to search and purchase products, generate quotes and track deliveries all from their laptops or smartphones.
The integration also means Reece’s predominantly trade-based customers can have invoices automatically uploaded to their own MYOB accounts, thereby eliminating the need for manual entries.
“Integrating MYOB with our online business management system, maX, provides an end-to-end digital experience for our customers, now with the added capability of sending invoices straight into our customer’s MYOB accounts, helping track payments and improve cash flow,” said Reece Group chief marketing and supply officer Adrian Palumbo.
The availability and obvious benefits presented by payment solutions has already caused major shifts at the consumer end of the market, but in e-invoicing we’re beginning to see the change ripple up through the supply chain.
After all, which business wouldn’t want to decrease the amount of time it takes to get paid?