Nowadays more and more vendors who sell tangible items are introduced to (or forced into) setting up a punchout catalog site for their largest customers. At first, many vendors view punchout as… well, a hassle. In the eyes of these vendors, when they are initially told by their customer that they must set up and connect a punchout catalog – they typically cannot see any benefit in their favor… all they see is cost, effort and… for what?
“Punchout for what”, you ask? Some vendors are completely satisfied with this answer: ‘because one of my biggest customer said so…’ And, that is totally well-understood but it proves too simplistic because there is much more benefit to the vendor who is willing to recognize it and capitalize on it. Let’s give a short list of the benefits and we’ll focus on each on in this series “Capitalizing on punch-out”.
Here are answers… reasons why these vendors should not only be excited but rejoice indeed that they have been invited into the very small world of punchout capable suppliers and vendors:
1) Punchout catalogs solidify more long-term customer relationships.
2) Punchout catalogs offers new potential buyers from within your customer’s buying organization.
3) Punchout catalogs give you a captive audience of buyers within your customer’s organization.
4) Punchout catalogs opens up a market that is a much greater range of new potential large customers.
5) Punchout catalogs give you a potential huge increase in revenues (as created by #1-3)
6) Punchout catalogs promote much greater shopping and order automation.
7) Punchout catalogs with eInvoicing will bring on faster customer payments.
Since vendors love to talk about getting paid, we will start this series focus on #7 – getting paid faster. One of the mistakes that vendors make when setting up a punchout catalog for buyers is just doing the bare minimum. This plays out mostly when it comes to invoicing. At the beginning of a punchout project, the buying organization of the customer will lay out their requirements and often eInvoicing is either not included or completely absent. However, vendors who will proactively offer the ability to finish the punchout ordering process with eInvoicing – either directly from their accounting software or from a third party – will be doing themselves a big favor. Most buying organizations will not proactively require eInvoicing but they will also not usually turn down the opportunity to receive invoices electronically directly into their system.
The wise vendor offers eInvoicing to his customer to complete the punch-out ordering process. The typical net result is getting paid dramatically faster because the invoices are now being processed directly into their system – expediting the time it takes to get to accounts payable.