Accounting

New Shopping Habits? New Solutions!

Seven Tips for Retailers in Times of Crisis.

The recent health crisis has been going on for a while now and, unfortunately, its end might not be yet in sight. However, with the help of remote working platforms and automation tools, you can not only mitigate its economical impact, but also explore new opportunities.

In this series we’d like to show you how reliable and efficient P2P automation, backed by record and contract management, can help different types of companies keep their cashflows afloat. Our first article is about the retail industry, one of the most heavily hit by the isolation measures and whose representatives are now fighting with unstable demand, difficult to manage stocks, and a burdening amount of paper documents.

Supply, Demand, and Paperwork

With shoppers no longer crowding supermarket isles and customers orienting themselves towards online shopping, retailers, from hypermarkets and food retailers to convenience stores, face serious losses or at least a rapid shift in their supply chain. In fact, according to an E-Commerce Europe Survey published in late March, all participating organizations claimed that the Covid-19 outbreak affected their business, with 65% of them expecting a sharp decline in sales.

The reason for this is quite simple: unlike other industries who thrived because of their business model (like online services) or simply had to stop all activity (like the hospitality industry), food retailers are in an unusual position. The demand for their products grew exponentially, while their ability to satisfy it declined due to a lack of personnel, manual processes, and an inability to use fully use their physical selling points.

In other words, retailers found themselves in front of a fledgling market, whose demands they could not fully satisfy due to being tied to legacy processes and paperwork. And paperwork, especially when post offices and couriers work at a lower capacity, is really difficult to handle – not to mention, a health hazard to employees, many of whom are working confined at home.

How Isolation Changed Shopping

While some feel that online shopping is in a clear advantage, the same study shows this might not be the case. Indeed, e-commerce has skyrocketed in some countries, as McKinsey highlights, and 35% of the interviewed E-Commerce Europe companies claimed online and offline were now entering a silent conflict. However, once you get down to each side’s pain points, you will easily notice that they are identical, ranging from transport costs to supplier issues and either too many or too few orders for certain products.

 

 

So, how did shopping habits change during this crisis and how does it impact online and offline retail, as well as producers?

  1. Demand is now highly unpredictable, with people buying large quantities of essential goods, while perishable items remain in stock. In fact, online canned goods and shelf-stable products sales (rice, flour, pasta) have gone up with more than 50%, while others completely tanked. This affects retailers, as well as small and medium producers, who can’t reroute their production overnight.
  2. Stock management has become a burden. At this point, not all suppliers are able to work at full capacity, while, at the same time, multiple products just fly off the shelves. Whether you’re an online or offline retailer, it’s becoming more and more difficult to predict product availability. A promotion you’re running right now might be for a product that’s no longer in stock.
  3. Delivery services are overcrowded. This makes the delivery of essential goods a priority and pretty much eliminates the delivery of paperwork and additional documents, an action that used to keep delivery services busy before the crisis.
  4. Invoicing and order management, especially in paper form or by phone or email, are often delayed. Which means accounting processes lag behind. Manually creating or processing a single invoice can take anywhere between 5 and 29 days (according to Billentis), but when you’ve got suppliers sending new batches every day, all P2P and O2C processes are slowed down. On top of that, your accounting department is working remotely and not at full capacity.
  5. The dwindling staff makes back-office process management cumbersome. Back-office processes seem irrelevant in times of emergency – unfortunately, mismanaging them can block your entire business, which is why many companies are trying to either externalize or automate them. Even so, outsourcing accounting processes is not without its downfalls during this period: SSON estimates a loss of productivity of around 25-50%.
  6. Difficult payment reconciliation and delayed payments complicates treasury management. This is tied to the loss of productivity of the accounting department and its ability to issue reports, but also to the inability of paying suppliers in time, due to a lack of documents.
  7. Safety concerns for both staff and customers make you reroute all your essential staff to fulfill customer needs in the safest possible way. This means that relieving your employees of non-essentials tasks should be a priority.



So, what can online and offline retailers do to boost productivity without affecting their employee’s safety or their long-term finances?

Seven Tips to Boost Business Efficiency

When internal resources are in short supply, business process automation becomes a worthy ally. And, since many of our partners come from this industry, we’d like to share a few tips and tricks that will help you get a grip on your sales during disruption.

1.Promote Effective Digital Transformation. Digital transformation has been a buzz word for years, yet a lot of companies are only now forced to apply it. The problem is, many retailers and producers simply create new web pages or enhance existing ones. While that’s a good step in the right direction, it’s not enough. Proper digitalization starts with core business processes. What good is a website, if you still process orders and invoices by hand or use delivery services for them?

2.Prevent supply chain disruption through P2P and O2C automation. In order to do this you need agility. If you still rely on phone orders and ad-hoc processes, you are sure to miss customer deliveries. An integrated P2P automated process, with all your suppliers, distributors and transporters, ensures that data flows correctly at the right time, and you can deliver a good customer experience. No matter where your employees are working from, because these services are offered in the cloud.

For one of our customers, a national retailer using our DocXchange solution, ensuring that all orders are received in due time is easy: each day, over 1500 suppliers receive their orders electronically, in a web portal or directly into their ERP. Also, the retailer is notified of order status, whether the supplier confirmed it as is, or performed changes due to lack of stock. This allows the retailer to quickly tap into another similar supplier to make up for the desired quantity.

Note that, while P2P and O2C automation is welcome in any scenario, there are certain differences between providers.

3.Manage stock availability and prices with an electronic catalog. Using an electronic catalog solution allows you to see which products suppliers have in stock and how their prices vary. Furthermore, it can allow you to secure vital promotions and make considerable savings. For suppliers, a catalog will also help tackle fast-selling goods faster.

4.Automate purchasing processes by eliminating paper contracts. Using a contract management tool that runs in the cloud and is 100% digital would relieve not just purchasing, but also category managers and the accounting department of extra manual work. Not to mention it brings a lot of productivity improvements, sufficiently to set-off the normal drop we’re all experiencing when we try to juggle home duties and work duties.

For one of our customers, we implemented DxContract, a solution that has over 19 types of specific contract templates and associated workflows. This solution cuts down the time you need to generate a contract, to approve it and sign it and also to track the contractual terms and turn them into business transactions. For example, you can see if discounts are correctly applied in invoices related to that contract.

5.Eliminate all manual input in your ERP. This would be the next step after eliminating paperwork. Using a fully integrated P2P automation program would not just free the time necessary for paper management, but also that necessary to validate documents and enter them in your ERP.

With DocXchange, all invoice control processes – be it fiscal validation, business rules validations, n-way matching or complex approval workflows, happen in maximum 5 seconds. Once done, data is directly pushed into your ERP of choice, all the way to entering the transactions into the general ledger.

6.Use electronic archiving and audit trails. If creating and processing paperwork is cumbersome, storing and manipulating it afterwards is even worse. So, make sure you’ve got your documents archived and stored electronically, in a legally compliant manner.

Using our DxArchive solution offers you: a cloud-based solution flexible enough to support customers with over 40M documents down to small customers with only 50-100 documents; Also, with document information accessible anytime, anywhere, working from home you can be just as efficient in retrieving the necessary information.

7.Pay your suppliers in time with electronic invoicing. Electronic invoicing doesn’t just relieve your employees of manual work, it also helps you pay your suppliers faster. This way, supplier relationships will be improved in a time when they matter the most. Studies show that only 45% of paper based invoices are paid on time, because their processing and validation time often takes longer than the due date, while 95% of e-invoices are paid on time. This is a significant cashflow improvement that allows both buyers and suppliers access supply chain financing solutions such as factoring or reverse factoring.

Using our DocXchange solutions all suppliers have real-time visibility into their document status. So once an invoice has been validated and confirmed by the recipient, they can send the documents right away to their bank, asking for invoice financing. No need to take the papers and actually go into a branch.

Overall, using these business process automation techniques would allow you to institute a ‘’touchless’’ policy, where the lack of paper and manual process would keep your employees safe and your cashflow running. By setting this example, your partners and suppliers will soon follow.

A brief case study

DocProcess builds automation software in the cloud that helps companies automate business processes both within and among their network of partners (buyers, suppliers, financial institutions). Our solution – DocXchange –  takes away the hassle of paperwork and manual operations, giving managers and employees alike full control over their time and finances. Our vision is that all companies, irrespective of size, will work with one another, 100% digitally, paperless and in real-time.

Our complete automation solutions are currently used in the retail, automotive, professional services, logistics, healthcare and utilities verticals by over 3500 clients and more than 25 000 users. Here’s some of the improvements we’ve brought to one of our client’s P2P process.