The following description is provided to assist the understanding of the reader. None of the information provided or references cited is admitted to be prior art.
In the normal course of business, a company can utilize a number of vendors to procure needed products and services. As a company can be both a buyer and a vendor, a buyer refers to a company that is purchasing goods or services, and a vendor is a company that sells goods or services. FIG. 1 is a graph 100 of a common relationship between a buyer's amount of purchases and the number of vendors used by the buyer. Some buyers spend a large amount at a small number of vendors (102). These buyers though tend to still have numerous vendors that provide smaller amounts of products and services (104).
In instances where the buyer is a very large corporation, with very substantial financial resources, and the vendors that represent the majority of purchases are also very large corporations, with very substantial financial resources, costly, complex and customized electronic supply chain order, fulfillment, invoice presentment and payment systems are sometimes implemented. Once these complex systems have been implemented, the large buyer and vendor are able to interact with one another in a nearly paperless fashion, including purchase order delivery, invoicing and payment. These systems are often referred to as closed loop environments, as the platforms are not extendable, without deep and costly integration, to all other customers or vendors. Often, these systems rely on electronic data interchange (EDI) interfaces, provided by third parties, to deliver data to one another. And, when payment is due, these systems rely on integrations with bank software platforms to deliver electronic payment via the Automated Clearing House (ACH). The deep customized integration that can exist in these highly complex and costly systems, by its very nature, requires substantial effort, often completed by third party consultants, to design and implement. And, once the system is designed, both buyer and vendor must still allocate substantial management and staff resources during the setup process. All of the above ignores completely that finding vendors and buyers, completing and responding to requests for proposals (RFPs), and “setting up vendors and customers” within each other's accounting or enterprise resource planning systems is time consuming, manual and relies heavily on the acquisition of information that can only be provided directly by the counter party. That said, once the system is complete, efficiencies still improve. In other circumstances such deep integration is simply not practical. For instance, in the retail sector, consumer tastes change so rapidly that many purchases from vendors must be managed on a moment-by-moment basis. Notwithstanding, large buyers with substantial financial resources still work very hard to eke out as much efficiency from the procurement process as possible, often at the expense of their much smaller vendors, who are forced to comply with the variant invoicing requirements and standards imposed upon them by their large customers. And even then these systems are generally designed for vendors that supply valuable inventory, and are not implemented with small infrequently used vendors supplying items that would generally be classified as general and administrative expense items.
In many cases, these large buyers eschew deep integration and simply require their vendors to communicate with them concerning transactional information via Electronic Data Interchange. In these cases, the vendor is generally required to hire a third party integrator to serve as an intermediary to enable them to receive each of their customers' electronic orders and comply with each of their customers' unique invoicing requirements. The introduction of a third party integrator is an expensive necessity for vendors who choose to do business with these customers. It should be noted that it is highly unusual that all of a vendor's customers require EDI integration, and as a result, vendors are required to maintain many disparate processes to support and manage their many customer relationships. Some customers receive invoices via EDI, some via paper, others via email. Managing the funds owed by their customers is equally inefficient for small and large vendors alike.
In rare circumstances, large buyers with substantial financial resources have gone to the trouble and expense of developing, or purchasing, Electronic Invoice Presentment and Payment (“EIPP”) solutions to communicate invoice and payment status to vendors. However, this remains rare, and even where it exists, the invoice and payment information is buyer specific. That is to say, when vendors sell to buyers that have a platform that provides invoice and payment information, each system is unique and independent, a closed loop. And even then, there is no standardization within these platforms (the information available is different, both in terms of its type, presentation, access, etc.), and as a result, even in the rare circumstances where an online system is available, the acquisition of invoice and payment status across customers is time consuming and inefficient. In most cases, no data is available online and vendors must call each of their customers on the phone, or email them, to obtain invoice and payment information, necessitating customer response to these calls and emails.
All of the above consume substantial time and effort for both the buyer and vendor.
Electronic invoice and presentment solutions are generally designed to meaningfully improve the efficiency of a large buyer with a large number of disparate vendors. This improvement is accomplished in numerous ways, but heavily focuses on the elimination of paper handling, data entry, and manual invoice approval among accounts payable departments. The solutions are, by design, buyer-centric. The buyer receives increased efficiency at the expense of the vendor, who must comply with specific invoice requirements mandated by the buyer. This arrangement often means that the vendor must submit invoices to the buyer following very precise business rules that often force vendors to ignore the invoice printing and email functions that exist within their accounting software platforms, instead submitting invoice information to various customers using unique buyer-specific one off processes. While electronic invoice presentment and payment systems can integrate into a buyer's accounting system, they rarely integrate with similar efficiency into the systems of their vendors, and then, only within custom designed and highly complex systems available only to the largest vendors with substantial financial resources. Even then, the integration is unique to the specific buyer-vendor relationship, rather than to all buyers, and conversely, all vendors. In the rare cases where a customer has made an online invoice status system uniquely available to the vendor, if a vendor needed to request the modification of an invoice after delivery to their buyer, the vendor would need to make the change within their own accounting system, and then resubmit the corrected invoice, or credit memo, to their customer, in a duplicative process.
Smaller vendors with fewer financial resources, or that sell small quantities of goods or services, particularly on an infrequent basis, or larger vendors with substantial financial resources that sell a small amount of product to their customers, simply have too little capital, sophistication, or financial incentive to undertake such integration projects or implement an EDI relationship. In these circumstances, relationships generally involve the production and mailing of a large number of paper invoices, manual buyer approvals, data entry, collection phone calls and, ultimately, payments by check.