Billing: where enterprise can support small business

Philip King
October 11, 2022

Businesses are facing tough, unpredictable times. If you’re pessimistic, you’ll be battening down the hatches and working out how to handle a downturn. But if you’re optimistic – and there’s always room for optimism – you’ll be focusing on agility, collaboration and all the other good things that make a business more resilient.

Businesses have looked in all the usual places for resilience. Labour is a good example: can we do more with the same resources? But today, talent is at a premium. It’s time to look at other opportunities to change the way businesses work.

One new opportunity to create resilience is in larger businesses supporting small businesses – whether that’s up the supply chain to suppliers, or down the line to SME customers. 

First, it’s morally the right thing to do. Plenty of businesses acted altruistically during the pandemic, so we are clearly capable of a more enriching approach to business. 

Second, it makes good business sense. Enterprise is reliant on its SME supply chain. Small suppliers tend to be more innovative, more creative, more nimble and flexible. They implement ideas quickly, and reduce the complexity of peaks and troughs in supply.

The value of those relationships should be exploited for the ample value and resilience they create. These relationships should be partnerships: you’re not dealing with “third party suppliers” and “third party customers”, rather, you should be working together for mutual benefit.

The classic billing operation hasn’t done a particularly good job of building those relationships, because it’s been transactional, a pair of binary outcomes: paid (great!) or unpaid (go through an expensive process of chasing and recoup).

It’s time for billing to get better at relationship-building. We all know that communication is at the heart of a strong relationship, and that’s as true in business – including order-to-cash – as in our personal lives.

Communicate to simplify and cut costs as a customer: Paying a couple of days late while communicating effectively about it is hugely less costly to the supplier than not paying at all, or paying a couple of days late without communicating it and therefore incurring the costs of chasing.

Communicate to simplify and cut costs as a supplier: All customers have a choice as to who they pay and when. So they will select the suppliers they wish to preserve the most, and with whom they are most comfortable. If you give them flexibility, you can become the supplier of choice (and that can even mean being chosen when you’re not actually the cheapest…) – simply because you’re liked and respected.

With communication channels open, both supplier and customer win. By leading the way in billing, enterprises can make a major contribution to the welfare and security of its supply chain.

Philip King has 42 years’ experience in credit management and related disciplines. He was Chief Executive of the Chartered Institute of Credit Management from 2005-2020. He also served as Interim Small Business Commissioner from 2020-2021, supporting small businesses in their trading relationships with large customers, particularly in relation to payments.

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