A STRATEGIC IMPERATIVE FOR MANUFACTURERS

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

As manufacturers deal with a greater amount of suppliers

from regions around the globe, it becomes more difficult

to pay supplier invoices by manual processes. The

traditional three-way match of invoice, order, and

receipt of goods becomes tedious and inefficient

when supply chains involve a large network of suppliers.

Relying on external parties to manage document flow

often results in low supplier satisfaction levels due to

late and inconsistent payments.

Companies find it difficult 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 supplier

payment and use exception-based management to

catch discrepancies in the financial supply chain.

Ack

Ack

Receipt

Invoice

Invoice

Consignee

Out of Sequence

Manual Matching

Approval Delays

Order

Payment

Order

Order

Bank

Buyer

Seller

Receipt

The manual process for matching order, invoice, and receipt is

not sufficient in a complex, global supply chain with a multitude

of stakeholders.

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 significant 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 efficient 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payments with out-of-date systems and many partners.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 supplier 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 flow for all parties

The Challenge

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

Dealing with supplier invoice payments becomes much

easier in the cloud. Suppliers and financial 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 payment to suppliers can be made on time.

Automation causes better buyer-supplier relationships

and more accurate forecasts for inbound cash flows.

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.

Purchase-to-PayAutomation

Self-InvoicingOperation

Trade DocumentManagement

ExceptionCollaboration

PaymentApproval

3-Way

Match

Consignee

Bank

Buyer

SellerInvoice

Order

Receipt

In the cloud, orders, supplier invoices, and receipt are all reconciled

automatically; supply chain partners collaborate in an exception-

based process.

Automate three-way match and payment to suppli-

ers 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 Propositions

Automation of supplier invoice payment on a cloud

supply chain platform can help improve supplier

relations, optimize working capital, and reduce fees

and inefficiencies along the financial supply chain.

Manufacturers can benefit 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

financing

• 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 satisfaction and retention

Supplier Invoice Payment Automation and the

Networked Company

To automate supplier invoice payments and

standardize documentation, companies must

transform themselves from silo-based, inward-facing

corporate operators to interconnected, highly agile

business nework orchestrators.

NetworkConnectivity

Agility

B

A

Sense more accurately

Operate more e�ciently

Respond faster

Make better decisions

The Solution

Manual payment processes are rife with

error and delay; only with cloud technol-

ogy can documents be standardized

across suppliers and used on an excep-

tion-based, automated system.

GT Nexus provides the cloud-based collaboration platform that leaders in nearly

every sector rely on to automate hundreds of supply chain processes on a global

scale, across entire trade communities.

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