Construction eInvoicing - COINS Expert Insight
In this expert insight COINS P2P specialist, David Bullock, discusses some of the hidden problems that may exist when implementing financial software for construction businesses such as Procure to Pay, Supply Chain Management and Electronic Trading. What often appear to be straightforward processes can have hidden costs and implications if not implemented correctly.
According to Wikipedia, ‘The devil is in the detail’ is an idiom that refers to a catch or mysterious element hidden in the details, meaning that something might seem simple at a first look but will take more time and effort to complete than expected. It derives from the earlier phrase, ‘God is in the detail’ expressing the idea that whatever one does should be done thoroughly; i.e. details are important.
So, how does this idiom fit into the world of Supply Chain Management, P2P and electronic trading within the construction industry?
Let’s take the process of eInvoicing as an example. The process of taking an invoice from a supply chain partner into your construction ERP solution is fairly straight forward, however, its not as simple as turning on a tap - it takes time, co-ordination, communication and commitment to make the necessary changes to your financial processes to achieve the greatest value. You need to bring your construction supply chain partners on the journey with you to create a win:win for all concerned.
So, let’s take it as a given that your supply chain partners are ‘on-board’ and you have configured your eTrading hub to transfer eInvoices into your construction ERP. Happy days? Well not necessarily. You may have unwittingly reduced administration burden in one area, but increased it elsewhere, or perhaps created a situation whereby you must make yet more important decisions.
I am talking about invoice lines and the line level detail contained within your supplier invoices. Imagine, if you will, that you have taken the time and effort in onboarding your suppliers capable of transacting via ‘Electronic Data Interchange’ (EDI) and have now moved onto those who can supply their invoices as PDFs, which could be a sizeable chunk of your supply chain. Surely PDF’s are easy to work with, ‘that’s why we have PDF’s’, I hear you say! However, not all eTrading hubs are equal.
Let us run through the issues that may result from your eTrading hub not being able to bring through PDF line level detail and can instead only bring through header information and totals. Don’t get me started on multiple page PDF’s, that’s another bug bear of mine!
Firstly, where do you apportion costs? When the invoice hits your construction ERP, you could do one of two things. You could get your staff to ‘improve’ the invoice information by adding in all the invoice lines. This obviously takes time and resource, but you can at least place the costs in the right place. Hmm, that however negates some of the efficiency improvements that you were hoping to gain from eTrading in the first place! Alternatively, you may, to save time and resource, push the cost to ‘blanket’ headers. This means that your invoices get into the system quickly, with minimal work, everyone is happy. But, hang on, the construction financial data is now incorrect, your visibility of cost data is now somewhat cloudy, and your cost heads can’t be accurately reported on. What a dilemma!
But with COINS Electronic Trading we can ensure that line level detail from your construction supply chain invoices is passed through the e-trading hub into your COINS ERP software solution, giving full visibility of all detailed line items and ensuring that minimal additional work is required to ‘improve’ the transaction within the ledger. You will save time, money and sanity and achieve a clearer picture of your current position by utilising your construction data to provide real-time accurate intelligence relating to ongoing project costs, budgets and allocated funds. Your project teams will benefit from having access to accurate and dynamic information on the state of construction projects whenever they need it, and by minimising paper processing you will be contributing towards sustainability and environmental objectives.
More about COINS Electronic Trading
The COINS Electronic Trading solution enables buyers and suppliers to trade electronically whilst providing seamless integration of commercial transactions into back office systems.
The main benefits of COINS Electronic Trading include:
- Process cost savings.
- No re-keying of data
- Auto-matching of invoice and order
- Reduced number of invoice queries
- Automatic cost allocation
- Clear audit trail of all transactions
Significant spending often occurs outside authorised construction purchasing agreements, resulting in significantly higher acquisition costs. Therefore automating the construction procurement process represents a great opportunity to achieve significant bottom-line savings, whilst also improving internal financial processes and service levels.
COINS Electronic Trading enables partners in the construction industry to transfer electronic data within a secure environment. For example, companies can exchange commercial documents such as construction project invoices and orders with their trading partners. All transferred data is in a structured format to facilitate data exchange between different applications, financial data can be integrated directly into the COINS construction solutions where it automatically populates the core procurement and financials elements of the COINS solution.
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