What is Tail-end Spend?
What is Tail-end spend?
“Tail-end spend” is the name for supplier invoices for ad-hoc or one-off purchases or purchases without proper procurement planning also called non-PO invoices.
The suppliers are not registered in the vendor database and the purchase can not be automatically matched to a purchase order which complicates the invoice handling and administration of the purchase, resulting in increased cost for the company.
With Billhop you can pay all your non-PO invoices with your company’s credit card.
The invoice follows the expense policy, together with any other expenditure on the card. This way, you can avoid unnecessary cost and eliminate time spent on registering new suppliers in your ERP system.
Tail-end spend – a burden for the company
Non-PO purchases often cause headaches in finance departments. Having to enter constantly new and occasional suppliers in the supplier registry becomes in the long run both expensive and time consuming.
The process required to manage these bills also takes unnecessary time of employees; time that can be spent on more value-adding tasks.
Unlike orders invoices, which are approved and authorized when the order is sent, tail-end invoices require individual control and approval before they can be paid.
Moreover, the new supplier has to be entered into the company’s ERP-system which creates additional costs. In some cases, companies pay more for the administrative handling than for the actual purchase.
Another problem is that these ad-hoc suppliers don’t accept cards which limits the ability to manage the increased cost through alternative payment methods.
An illustrative example
The image above illustrates the “tail” of a company’s suppliers or tail-end invoices. These suppliers are numerous and the average purchase per supplier is relatively small. It costs equally much to enter each single supplier manually into the ERP-system regardless of the number of purchases and the order value per supplier. Therefore it becomes even more important to find an efficient and cost effective way to manage and pay those suppliers.
Transform your tail-end spend into ordinary expenses
Completely avoiding tail-end invoices is unrealistic in most industries. Unexpected expenses will appear in all forms and often a one-off order from a new supplier is inevitable.
With Billhop you can pay the tail-end invoices with your corporate card. You process the invoice as a regular expenditure and pay it together with the other expenses you had on the card. This way you can avoid unnecessary costs and time spent to register new suppliers.
“Efficient management of tail-end invoices is important for all companies over a certain size. After a close dialogue with several companies, we have developed a unique solution to address this issue in a quick and easy way.”
– Roozbeh Charli, COO Billhop.
On Billhop you can register your company and pay the same way as via internet banking. You pay the invoice with your company card – fast, smooth and secure. The supplier will receive the payment within three bankdays and at the same time you extend your payment term thereby releasing working capital. You report the invoice as any other purchase with your corporate card facilitating administration.
Thanks to Billhop you can save time and resources to focus on your core business.
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