Where Is Self-Billing Applied?
Self-billing processes can be a cost-intensive source of errors in the collaboration between supplier and customer if it's not set up professionally.
Self-billing is a common practice in many industries where buyers and suppliers are working in close relationships and where comparable, reoccurring orders are requested based on long-term agreements. The process is most popular in the automotive industry where buyers release comparable orders for vehicle components on a frequent basis and in the following scenarios: In industries like Automotive, Mill Products, High Tech, Industrial Machinery, Chemicals, Professional Services, Cargo & Transportation, and so on.
What Is Self-Billing?
Self-billing is a common billing process that allows buyers to shift ownership of the invoice verification process to the supplier. This change means that instead of the supplier, it is the buyer who prepares and sends the invoice in the form of a so called self-billing document - along with the payment to the supplier. The supplier must then verify if the stated quantity and values of the deliveries in the self-billing document match the actual quantity and values of delivered parts. The process allows buyers to send self-billing documents to the supplier, stating the deliveries and amounts that are settled and paid. On supplier side, the incoming self-billing transmission is received and processed to prepare clearing process.
Challenge
The biggest challenge is to detect issues when comparing the received with the internally created data, and to ensure efficient processing. At many companies, processing incoming self-billing transmissions is still a manual process. The processing is cumbersome, time consuming, prone to errors, and discrepancies are easily missed. These issues lead to higher costs and reduced cash flow.