Category: FMCG Food & Beverage
Highly Commended: Henkel
Summing up: A well-received SCF programme that coupled the introduction of streamlined automated invoice processing with the ability to offer early payment on supplier invoices.
What the judges said: The participation rate and the handled volume is very impressive! The concurrent transformation from paper to electronic invoicing is a compelling add-on.
- Electronic invoicing was introduced to automate the accounts payable processes
- Platform offered suppliers a real-time view of invoice status
Henkel is a German chemical and consumer goods company employing 52,000 people around the world, with 85 percent working outside of Germany. It is present in the beauty care industry, laundry and home care, as well as in industrial sectors such offering adhesive technologies. It prides itself on being a leading force in sustainability.
The company wanted to develop a supply chain finance (SCF) solution to help its suppliers access earlier payment on invoices via automated processes.
It decided to work with financial technology provider Taulia to develop the solution. A platform was created that not only gave suppliers the option to access affordable financing options through early payment requests, but also introduced electronic invoicing which streamlined their entire accounts receivable process.
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Suppliers were able to access a real-time view of their invoice status – a service that became even more valuable this year as the impact of the Covid-19 virus hit supply chains, shutting down or stalling production around the world, and creating a high level of uncertainty about when payments would be made and when new orders could be placed.
The swift onboarding process for suppliers won the praise of this year’s judges. Henkel wanted to improve supplier adoption with the offer of a free portal.
The SCF platform helped the company reach two strategic goals of optimizing working capital and invoice automation.
The company has both improved its cost-income ratio as well as provided support and liquidity to their suppliers’ businesses in an increasingly tough economic climate. Suppliers have benefited from improved cash flow and are able to better forecast their financial position. Ensuring the company’s network of suppliers remains in good financial shape will inevitably benefit Henkel through minimising the risk of future supply chain disruption.
The automation of invoice processing has also proved successful, with the company decreasing the level of manual data entry required to be carried out by its staff and providing Henkel with more visibility and control over processes.
Data provided suggests the programme has been well-received by suppliers, with high levels of uptake and high volumes of processed transactions. It has also provided a necessary liquidity lifeline for many of Henkel’s suppliers during this difficult year.