Overwhelmed by suppliers and invoices? Here’s how an MSP solves that

Recent research suggests that UK firms are spending £1.2bn annually on temporary staff in an attempt to plug talent gaps, so it’s no wonder that procurement and finance teams are feeling snowed under by an endless stream of invoices arriving from suppliers. 

It’s not unusual for businesses to work with 100+ suppliers. Relationships can be managed between hiring manager and supplier and as you’ll know all too well, procurement often doesn’t have sight of this arrangement until someone has been on site for three weeks and an invoice bounces in with terms of business.  

However, this way of working is not only inefficient, but also unsustainable and fraught with risk. The good news is there is a solution.  

Overcoming the chaos 

It’s widely recognised that working with an MSP is more cost-effective than traditional or in-house recruitment strategies but the process improvements that managed service programmes also bring to a business can’t be underestimated. 

Procurement and finance teams who are contending with unexpected invoices landing at different times from different suppliers can quickly find themselves swamped. And at a time when skills shortages continue to impact almost every sector, it can be tempting for internal talent acquisition teams to engage with new recruiters to fill talent gaps which only adds to the chaos. This is not the answer. 

The benefits of an MSP 

As we’ve highlighted before, the advantages of working with a managed service provider are numerous. An MSP will rationalise your supply chain and narrow it down to a smaller number of suppliers, negotiate rates, and create a preferred supplier list. What’s more, you will save money in the process. Your MSP will negotiate price reductions with your suppliers in return for increased volume.  

Thanks to the Vendor Management System (VMS) technology that works alongside an MSP, you’ll no longer be exhausted by different invoices, contracts and terms. Pre-defined rates are built into the tech so you don’t have to worry about your supply chain charging too much: you’re drawing down from a rate card that’s associated with job templates. The MSP picks up the heavy lifting with control and quality built in from the back end. 

How does it work?

Typically, you’ll receive a single, regular invoice from your MSP. Once paid, your MSP will automatically remit payment to supply chain so third-party providers won’t even have to invoice, removing a huge amount of workload for both your finance team and suppliers.

What’s more, thanks to your MSP’s extensive network and strong relationships, when it’s time to look for skills for a new project, market, or geography, there will be a pool of suppliers on-hand that can join the programme and meet your needs.

Spotlight on compliance 

There’s so much more to managing a supply base than reviewing candidates. For example, if you have 50 suppliers, you must manage and account for 50 certificates of insurance. You’ll need to regularly change banking details within the AP system, make general amendments and manage relationships with a whole host of stakeholders. It’s a lot of work for one person. And that’s before you even scratch the surface of the compliance piece. 

Ensuring that your non-permanent workforce is managed in a compliant way throughout the supply chain is vital. However, without super-robust processes in place, it can be difficult to know if your suppliers are meeting their obligations under employment law, until it’s too late. We’ve seen several high-profile cases in recent years where big-name brands have had illegal workers, supplied through agencies, on-site without their knowledge. An MSP shoulders not only the heavy lifting around processes and administration, but also the risk and responsibility associated with governance and compliance. 

Unrivalled visibility 

There is often a misconception that businesses lose an element of visibility and control around their contingent workforce when they partner with an MSP. This couldn’t be further from the truth. Managing your contingent workforce through an MSP and VMS means that you will have access to a level of data that would have been unimaginable previously. VISION is Guidant Global’s interactive platform for assessing supplier performance. Using data driven through a PowerBI platform, VISION takes programme visibility to the next level - giving our clients the insight they need to make better, data-driven decisions about their workforce suppliers. 

Invoices will feed into your general ledger system and task or project codes on worker timesheets will need to match your own to allocate funds. This process ensures you’re futureproofing at the very beginning: invoices will all be correct, not only in terms of costs, but also in how budget is allocated within your organisation. This both maximises visibility and reduces rogue spend and non-compliance. 

Benefits for suppliers 

There’s a myth that MSP programmes benefit businesses at the expense of their staffing partners. Not true. If managed correctly, all parties can reap the rewards of the efficiencies, improved processes, speed of demand and increased volume that come with an MSP. 

Outside of a managed service programme, staffing suppliers are often frustrated by handling different projects in different places within the same organisation and dealing with separate hiring managers. Especially if this means submitting and chasing various invoices. 

Have you ever considered that your recruitment partners may also be overwhelmed by clients and invoicing? 

It’s true that, for suppliers, payment terms may be longer when they’re working through an MSP rather than directly with you. However, through an MSP, payment is guaranteed and consistent. Margins may also be lower for recruiters when working through an MSP. But when a business rationalises its PSL and removes redundant suppliers that are not performing, reduced margins can be balanced with an increased volume of roles. When a recruiter comes into the MSP, the pool of positions they can support is increased and they are elevated from engaged supplier to strategic partner. 

When is it time to make the jump?

We’re often asked when is the best time to move across to an MSP solution. There’s no set numerical benchmark of contractors or suppliers that warrants an MSP. Your needs will depend on the complexity and the administrative workload of your current programme, as well as your current exposure to risk. 

However, if you’re becoming overwhelmed by suppliers and invoices, it may be time to make the jump.