More B2B suppliers are selling their services and physical goods through web shops than ever before. A trend that was accelerated tremendously by the Covid-19 pandemic. Suppliers worried that traditional revenue streams would decrease, and buyers worried that their procurement capabilities would be greatly diminished by supply chain disruptions and outdated procurement processes.
But this new digital reality is here to stay. And that is excellent news for both buyers and suppliers. Buyers can more cost-effectively get information on suppliers and make purchases in a fast and convenient way, while suppliers can extend their reach and improve sales effectiveness. But online purchases are not just small convenience purchases. According to McKinsey, 70 percent of B2B decision makers say they are open to making new, fully self-serve or remote purchases in excess of $50,000. So, B2B online purchases will keep increasing and it is therefore critical that buyers have the proper processes and technologies in place to fully utilise the value of online purchases.
Processes that simplify and provide transparency through the entire purchasing process while improving compliance and security. This will especially benefit procurement, finance and the individual employee.
Online purchases typically fall under long-tail procurement, so there are a lot of purchases and suppliers to manage. So, it is important to have a simple and automated process for online purchases. Optimising the process will improve organisational agility and make procurement teams less dependent on otherwise complex processes. Often for online purchases, there is no need to involve procurement teams as employees can make purchases themselves. This allows procurement to focus on strategic suppliers and empowers employees to make smaller purchases – where approval happens before the purchase, of course.
Especially removing the need to onboard long-tail suppliers will save valuable time and resources and prevents one-time suppliers from filling up the enterprise’s systems. But the contrast – not collecting any information on used suppliers – is not sustainable either as visibility into spend disappears. A procurement solution that both removes the need to onboard suppliers and still collects supplier data from the transaction itself is therefore necessary.
Long-tail spend has been causing finance problems for years and it is no different for online purchases. Manual tasks, payment risk and maverick spend are all symptoms of inefficient procurement processes, but for online purchases these can easily be solved with a simple and automated purchasing process. One that utilises virtual cards to make payments, handles pre-approvals seamlessly and provides a complete audit trail for compliance and accounting purposes. This will remove the need for Accounts Payable to become detectives and track down employees when ‘wild invoices’ start piling up. And it is a very useful way of mitigating risk throughout the entire procurement process.
By using virtual cards and single-use virtual cards, enterprises can take advantage of proven payment rails that improve cash flow by offering immediate payment to suppliers while extending the buyer’s own payment terms. This will also allow the enterprise to collect transactions for online purchases on a single monthly invoice, thus freeing up valuable resources in Accounts Payable by moving away from handling invoices individually.
Covid-19 has expedited the need for enterprises to accommodate to remote work, and it is no different for purchasing processes. 100% digital business processes are required to ensure that business operations can proceed. This also counts for long-tail procurement and it is a key reason why smarter online purchases will enhance the enterprise’s procurement capabilities and allow employees to make purchases anytime, anywhere.
Simplified and automated online purchasing benefits any employee involved in the procurement process. By utilising innovative cloud-based procurement solutions, enterprises can ensure pre-approval before any purchase is made – either given by a manager or automatically according to business rules – without compromising process efficiency. Employees who need to make a purchase can easily make purchase requests and get approval, while managers can easily approve purchases and get improved visibility into their department’s spend.
There is no doubt that the increase in online purchases is here to stay – and will continue to grow in the future. Being able to handle these purchases through smarter cloud-based procurement solutions will undoubtedly improve cash flow, employee efficiency and organisational agility.
Mazepay utilises smarter payment technologies to provide a simple and secure process for online purchases through our cloud-based solution. Get in touch with us to learn more about how Mazepay will help you simplify your business.