When companies with an extended workforce program lack proper visibility into, and oversight of, their finances, they could struggle to answer complex questions from vendors and become vulnerable to certain unfavorable scenarios. Sometimes, payments will fail, other times they’ll be made twice. As concerning as this sounds, these are not uncommon situations when managing a contingent labor program’s finances.
Many companies lack insight into how their program is performing. Organizations may not know how many contractors are on their premises, the status of their worker background checks, or whether or not they’re being overcharged by their vendors. Clearly, having visibility and consistency on these elements would be massively beneficial.
One of the main needs companies have is to build an organized process to ensure vendors are getting paid accurately and on time. There are two key overviews companies can implement with the help of a vendor management system (VMS) to gain greater visibility: Consolidated Invoicing and Processing (CIP), and optimized time and expenses reporting
A Consolidated Method for Easier and Faster Invoicing
Organizations need seamless backend invoicing and billing processes. The ideal would be for them to have full payment visibility and simplify the payment process through a single procedure. To achieve this, companies need to have all approved time and expenses processed and get a single consolidated billing extract.
This is the purpose of CIP (Consolidated Invoicing and Processing). CIP is a centralized automated invoicing process that seeks to make it easier for organizations to consolidate their invoices and process payments, which otherwise tends to be an entangled and time-consuming procedure. CIP is part of VectorVMS’s Shared Managed Services (SMS) program—a hybrid solution where companies can directly manage their contingent workforce using a VMS while still receiving specialized support from a team of experts. Finance management with CIP is one of those services.
The benefit of this type of system is that no matter how big an organization is, or how many vendors it has, it only gets a single consolidated invoice where everything is included and considered. Payment can be processed via this single invoice, and the system efficiently breaks it down and distributes it among all the suppliers.
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Why Would You Need Consolidated Invoicing and Processing (CIP)?
Technology like a VMS can consolidate all approved timecards, expenses, and invoices and deliver a unified invoice to a client. However, it’s still the client’s job to distribute that invoice across its vendors, resolve any questions vendors may have, or any other problems that might come up when dealing with payments. Although this might work for some organizations, others lack the manpower or time to take care of it efficiently.
When CIP comes into play, a team of experts at VectorVMS takes care of that step. This service complements the VMS by providing visibility through reporting, thus eliminating the client and supply chains needed for individual reconciliation.
For example, organizations working with only a VMS are usually responsible for distributing payment across all their vendors. However, if they use SMS with CIP, the team would create a single consolidated invoice they have to remit, and then VectorVMS is in charge of distributing payment as established. The VectorVMS team will answer any questions from vendors regarding the payments and get corrections made if necessary.
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Optimized Time and Expenses Reporting
Time reports or timesheets are incredibly important, as what they show can directly impact the company budget and they will help you determine if vendors are getting properly paid. This process must be optimized for all participants involved, providing contractors an easy way to submit and correct information, while companies get full visibility of the reports, easing the discoverability of any corrections that need to be made.
Ideally, contractors should be allowed to enter their timesheets and expenses online and get them automatically routed for review and approval. Rejected timesheets or expense reports should be available electronically for the contractor to easily correct and resubmit.
A VMS can generate different time and expense reports for different needs. For example, on a pre-determined day of the week, a company can receive a report with all the timecards submitted in the system that haven’t been approved. Organizations can then analyze the information and make the adjustments they need.
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Expert Assistance Can Also Help You Leverage Visibility
Financial management is one of the most difficult tasks for companies working with contingent talent. It’s natural to have many questions and doubts, take plenty of calls, and make a few mistakes while finding the perfect process. However, with the right expert support, you can expect those questions, doubts, calls, and mistakes to eventually disappear, allowing you to save both time and money.
If you think your team needs help to improve visibility and other financial processes related to your organization’s contingent labor program, VectorVMS’s Shared Managed Services (SMS) hybrid program is the best option for you. With SMS, you can manage your program’s finances directly while relying on an expert team to back you up in minimizing incidents and solving the most intricate parts of the financial process.
Want to learn how to successfully manage your contingent labor program finances? Download now our ebook ‘4 Ways to Successfully Manage Contingent Workforce Program Finances’. You can also get in touch with our team to learn more about what Shared Managed Services can offer you.
Meet the Expert
Jay Grissom – Vice President of Account Management & Operations
Jay Grissom has more than 22 years of experience in managing contingent workforce solutions. He leads the VectorVMS team of program managers, who help clients optimize their contingent workforce programs through strategic planning, process improvements, and compliance and operational services. He also manages a team of consultants who lead implementation and ensure VectorVMS clients are able to achieve their workforce strategy with our vendor management system. Jay’s prior experience includes leading HR staffing teams at IBM, where he was responsible for full lifecycle recruitment, implementation of an applicant tracking system (ATS), and driving compliance.
He has developed the overall strategy for and executed vendor management systems for Fortune 500 companies across both the US and Canada. He is committed to working closely with his team to ensure client satisfaction is achieved, and to ensure our products align with, and promote, our clients’ goals and objectives. Connect with him on LinkedIn.