I was engaged in a thoughtful conversation recently about the benefits and shortcomings of supplier and customer portals. The discussion eventually steered to which solution was better for the supplier. Trying to answer that can be like having a discussion about whether apples or bananas are better for you. It really depends on what you’re trying to accomplish. The short answer is that customer portals provide serious benefit for the supplier while supplier portals really help customers. While that’s true, the longer answer is a bit more detailed and requires a more comprehensive look into the purpose of each type of portal.
Reasons for a customer portal:
A customer portal can be deployed by a supplier organization for a variety of reasons, including extending/supporting customer service, the submission of invoices and enhancing the sales process. Regardless of how the portal is designed and used, the platform’s purpose is to more efficiently engage with customers.
Reasons for a supplier portal:
Like a customer portal, a supplier portal may be deployed by a buyer organization with the intent of engaging multiple suppliers around invoice submission, P.O. delivery, payment information and compliance. Guiding multiple suppliers to a central location – rather than contacting each provider one at a time – helps drive efficiencies for the buyer organization.
Benefits of a customer portal
- Enhancing customer relations. Effective suppliers will always engage their customers in a way that helps them understand their needs and challenges. Customers have questions and it might be impossible for a supplier to answer all customer queries immediately via conversation or email. A customer portal allows the supplier to develop and share information that helps answer frequent customer questions about product, delivery, price, etc.
- Improving customer support. Similar to customer relations, good customer support is necessary in ensuring customers are happy and remain positive in relation to the sales process, delivery, returns, etc. Regardless of how many support channels a supplier might have, providing a self-service customer portal allows the customer to quickly grab needed information or submit a question without having to speak directly to an individual.
- Decreasing costs. By providing another channel for support and to help with the sales cycle, suppliers can decrease their costs by having personnel focused on more strategic activities. It requires more time, effort and resources to have staff chasing individual customer requests when most of that information can be housed on an easy-to-access customer portal.
- Enhancing the sales process. Whether the sales cycle is 2 weeks or 1 year, having a customer portal to aid in the sales process can be invaluable. In addition to decreasing costs, sales staff can be aided by having a customer portal that provides important product, service and pricing information to avoid answering the same or similar questions over and over. At times, it may be necessary to ‘train’ prospects and customers to use the portal, but those that do use it are usually that much more satisfied because they received the answers they needed quickly.
- Shortens and enhances the payment process. Anything that helps eliminate paper and manual intervention is usually a benefit to the supplier because it translates into getting paid faster. By having a central location for customers to receive invoices and provide payment information, suppliers can facilitate an expedited the payment process as well as enhance cash application – which ultimately improves cash flow and working capital.
Benefits of a supplier portal:
- Improves the payment process – including early payment. A supplier portal can allow a provider to submit invoices electronically in a way that removes manual intervention on the customer side. When this is done, the payment process can be expedited, errors reduced and supplier DSO reduced. In addition, a customer may offer an early payment mechanism via their portal that allows the supplier to paid significantly sooner (for a small percentage) – further reducing DSO.
- Better customer-supplier relations. Customers can more readily engage a larger number of suppliers when informing them of changes in vendor requirements, new invoice submission and payment processes, and upcoming product and service opportunities to bid on. As with the payment process, information on when payment will be available in addition to remittance data can be provided via the supplier portal.
- Submit invoices more efficiently. With a supplier portal, a customer can receive invoices through a central, standardized channel. This allows the customer to capture invoice data faster and more efficiently, thereby reducing errors, eliminating exceptions and processing payment faster.
Shortcomings for the supplier
There are potential shortcomings for suppliers when using either portal method.
- Encouraging customers to use the portal can be a significant challenge – especially if the customer has tens of thousands of other supplier relationships and also have a portal they encourage their suppliers to use.
- Developing, deploying and maintaining a customer portal may not be with the time and effort. If only a small percentage of customers use the portal, the supplier will struggle to see a return on investment.
- Almost every customer has a supplier portal. If a supplier has dozens of customers and each customer requires invoice submission through their individual portal, it can be very time-consuming and frustrating for the supplier.
- If problems arise while using a customer’s supplier portal, getting support could be problematic. While some customers offer great support in conjunction with their supplier portal, many customers fall short in helping the supplier understand the nuances of the portal.
Which is better for the supplier?
To answer the question regarding which portal method is best, we first need to understand what the supplier’s objective is.
If the objective is to simply offer a way to provide information to customers and assist the sales cycle, an off-the-shelf or homegrown information portal might be the best course of action. It’s relatively easy to maintain and requires no complex transactions. If the purpose is to provide information and facilitate transactions, perhaps the best course of action is to select a third-party solution provider such as NetSuite Customer Portal or Billtrust Invoice Central.
If the objective is to simply get invoices submitted, processed and paid as quickly as possible for a small number of very large customers, then using a customer’s supplier portal works well. With fewer portals to learn, it becomes less time-consuming for the supplier to engage with those customers in the way they prefer.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. His resume also boasts time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific as well as a number of years as an independent consultant.