Electronic Trading
Electronic Trading utilises information technology and the internet to bring buyers and sellers together. Traditionally buyers and sellers had to ring up and order, or post or fax purchase orders halfway across the world. Nowadays, commerce can be carried out all over the world, at any time of day or night, thanks to electronic trading.
Over the last ten years the adoption of Electronic Trading has increased substantially. Today, many Business to Business (B2B) companies, both buyers and suppliers, have taken advantage of Electronic Trading, and have benefitted from the cost and time savings, which have lead to improved efficiency.
Electronic Trading increases efficiency by reducing the manual workload required to raise and process orders, and so the number of errors. As orders are processed automatically, there is no need to re-enter orders or invoices manually. This reduction in data entry also helps to improve performance. Freeing up staff from data entry and associated tasks, is another advantage to Electronic Trading. This helps businesses to be able to grow, without the associated risks of needing more staff to expand.
Quality control is more transparent when using Electronic Trading, and so any mistakes can be seen as they happen and issues do not spiral out of control. This helps to lower the demand for reprinted, corrected paper purchase orders or invoices to be sent, which delay orders or payment. With an efficient Electronic Trading process in place, customers are more likely to purchase again, as they have had a smooth trouble free experience.
Electronic Trading help to shorten delivery times. Buyers receive their orders quicker, and for suppliers, it means less time for things to go wrong. With no paper purchase orders or invoices to get lost or misplaced, or filed away in the wrong place, the risk of human error is all but eradicated. Data integrity is assured, as spelling mistakes, illegible handwriting or transposed digit issues are issues of the past as all aspects of the ordering and invoicing processes are automated. Electronic Trading benefits all aspects of the supply chain. Fewer procurement procedures result in less time waiting for other parties involved such as suppliers to respond with a quote, manufacturers to provide more information about a product and buyers to pay an invoice. This leads to less risk, to all involved.
Some suppliers will offer an early payment discount. This encourages buyers to pay sooner, and guarantees that suppliers get paid quicker too. It also reduces the number of Days Sales Outstanding (the time between a sale and payment being received for that sale) figure.
Traditionally buyers and suppliers may have used different file formats, and back office systems, meaning that documents were not always compatible, which could lead to problems. For companies with hundreds or thousands of suppliers, keeping track of data formats would be an almost impossible task. Electronic Trading means that managing suppliers is now a much easier task.
There are many advantages for companies wishing to take advantage of the benefits of eProcurement, eInvoicing, and Electronic Trading. Find out how ProcServe can help you make the most of Electronic Trading.
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