Bringing Suppliers on Board

By Maria Trombly

October 14, 2002 12:00 PM ET

Computerworld - Sprint Corp. is one company that's luring its suppliers to switch to electronic invoicing and payment by getting money to them faster.
According to Tammie Calys, director of supplier disbursement, Sprint processes about 7.2 million invoices annually. In 2000, 98% of those invoices were handled manually and paid with paper checks -- at a processing cost of $4.85 per invoice.
In 2001, the percentage went down to 83%. Today, about 54% of Sprint's settlement is electronic, Calys says, at a cost of about 80 cents per invoice.
That adds up to annual savings of millions in payment processing costs, not to mention an extra $150,000 saved this year by switching from paper checks (about 50 cents each) to electronic payments (about 6 cents each) using an automated clearinghouse. And there's the fact that it cost Sprint about $12 to handle each payment mistake, which used to happen about 1% of the time with paper-based payments.
To make these changes, Sprint persuaded its suppliers to send invoices through a system from Pleasanton, Calif.-based Xign Corp. Sprint pays Xign about $300,000 a year; the total figure depends on a number of factors, including the number of invoices, and can vary for other customers.
In addition, Sprint spent another $200,000 to create some internal tools that helped the company with change management.
Sprint's vendors don't have to make any modifications to their systems to use the Xign platform, Calys says. Xign accepts file formats from most enterprise resource planning and back-office systems. And if they aren't computerized themselves, they can log onto to Xign's Web site and input the invoicing information manually through a form.
Next up for Sprint is to start billing its own corporate customers electronically.
"We wanted to get the payables solution in place before we start looking at that," Calys says.

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