One of the biggest challenges in the credit-to-cash cycle is supplier-buyer collaboration for processes across credit, billing, collections, payment processing, and dispute resolution. Since teams collaborate manually over email, it proves to be a huge challenge to maintain a system of record especially on past communication and patterns of problems.

11.1. Top Challenges in A/R-A/P Collaboration

A/R and A/P collaboration is very important right from the credit application process where the credit terms are set to the collections process where the A/P team pays invoices and reaches a settlement on deductions.

Figure 22: Manual Process in The Invoice to Cash Process

Figure 22 outlines the number of manual steps from the invoicing process to the payment process. An error in even one of the steps will result in a late payment and increase in DSO.

11.2. How Top Organizations Facilitate A/R and A/P Collaboration

Figure 23: Enabling Digital Collaboration Between Buyers and Suppliers

As Figure 23 outlines, establishing a digital collaboration portal between buyers and suppliers is the first step that organizations have undertaken. The platform is able to link the supplier ERP with the buyer ERP so that with a single click the supplier is able to post invoices directly into the buyer?s ERP.

Figure 24: Condensing a 10 step process to a 2 step process by leveraging a buyer-supplier network

Figure 24 outlines what the new process will be. A billing analyst generates an invoice for a product/service and posts it on to the network which in turn posts it directly on to the ERP of the buyer. This results in faster invoice delivery, seamless payment from the accounting system and straight through cash posting as the payment happens through the portal.