Transforming The VMS Starts With Invoicing

In previous discussions, I’ve talked about why only 6% of spend is currently being captured in a traditional VMS. Most sourcing and hiring decisions occur outside of it, either bringing in workers buried under a statement of work (SOW) or other processes that sit outside a VMS/MSP program. We won’t rehash the why of it here, but it does serve to cement our decision to transform the VMS - and that transformation is particularly notable in the invoicing process.

From our lived experience, conversations with experts, and feedback from suppliers, we believe one of the central reasons contingent workforce programs, managed through a traditional VMS, have lacked global and category adoption is because of legacy invoicing processes. Invoicing within VMS systems has been fundamentally predicated on an original notion that Managed Services Providers (MSPs) own the contractual relationship with and treasury function for the entire set of suppliers supporting a given enterprise. As the external workforce has grown in size, complexity, and geography, the reality now is much more nuanced - and that original assumption is often false.

The historical approach to invoicing functionality has been US-centric, making it difficult to expand globally. This means a lack of care for invoice-based accounting rules versus ledger-based accounting practices. And in the early 2000s, we were only talking about time and materials staff augmentation workers, so SOW consulting practices, including SLA management, deliverables, and complex invoicing was never part of the original design. This is why we have created a transformational approach to invoicing - to be more global and work-category scalable. 

The need to enable new ways of billing means suppliers must be responsible for invoice creation, proper tax treatment, error handling, and on-time submission. We make this very easy to do, which gives the supplier control over their business. We are empowering them to receive correct payments on time and pay their workers in a similar fashion. Most crucially, they can control their compliance with local regulations. 

As the Extended Workforce System, Utmost consolidates and reconciles the supplier submitted invoices against all approved expenditures. We are the only system that allows the supplier to submit an invoice rather than sending the invoice of record to the enterprise, forcing AP teams to reconcile VMS invoice data to the supplier invoice itself.

In other words, we provide the most efficient process for enterprise AP while also driving more spend and workers into one system - improving visibility (and all that comes with it) across the enterprise. This approach enables faster global implementations and quicker time-to-value across the organization. Finally, we can all start to achieve that long sought-after goal – go live faster with more spend in more geographies.

We know change is hard, but if we aim to transform a traditional way of doing things, we must shatter legacy processes. We also can’t lose sight of the efficiency of accounts payable and the critical importance of on-time payments (which impacts the cash flow of both workers, suppliers, and the MSP). But we must empower suppliers to take control of their business. Innovation is necessary to ensure continued value to our network, including suppliers, workers, and the enterprise. We believe changing how the invoicing process works will fundamentally improve the experience for all involved. 

I’m looking forward to sharing more about how these changes and others will improve program adoption in future blogs.

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