Amortising a PO amount: Rome wasn’t built in a day
In shipbuilding, timely payments are vital. This article illustrates real-world challenges and showcases the impactful efficiency of eye-share in the maritime industry.
Background: The intricacies of shipbuilding
Shipbuilding is an intricate symphony of coordination, expertise, and timing. Consider a ship owner who commissions a new auxiliary engine from Hallasan Heavy Industry in South Korea. Parts of this engine are sourced globally: the engine block from China, rubber components from Malaysia, high-tech electronics from Japan, Taiwan, and Germany. The final assembly is orchestrated in Singapore. One purchase order (PO) will be issued for the whole engine, and progress payments are due at various stages of production. Any delay in these payments, and the domino effect could ripple throughout the ship’s construction schedule.
The challenge: Risk of relying on reminders
Hallasan Industry is a huge company and will just send an automated invoice and likely not follow up. The shipowner must know when to expect these invoices and have means of deducting that amount from the main PO, therefore “amortising” the amount and ensuring they don’t over or under pay.
When handling before eye-share, this task fell to manual reminders and vigilant tracking. Picture a procurement manager relying on an Outlook reminder which, when missed, spirals into chaos: The Accounts department receive an invoice, but the amount doesn’t match the PO they have on file (while the contract of sale is clear about the progress payments, this is not stipulated on the purchase order). The accounts team call the procurement team, the junior buyer refers it to the procurement manager who is extremely busy and doesn’t respond for a few days. In this time Hallasan has not received the payment and warn that the production may be delayed. Meaning the engine may not be ready for sea trials and commissioning.
The eye-share Solution: Automation, Precision, and Timeliness
Eye-share transforms this process:
- Invoice Automation: Invoices are seamlessly received, interpreted, and integrated.
- Precision in PO matching: Automated PO matching ensures accurate invoice management.
- Clarity in payment schedule: “Invoiced Now” and “Remaining” indicators provide a clear snapshot of payments, both made and pending.
- Proactive reminders: Reminders and notifications can be set up so that the buyers and accountants can be prompted to check for incoming invoices.
- Contracts module: The contract itself can reside in this module and be used actively to ensure smooth and timely payments.
What does eye-share deliver? A fully automated payment process, if desired. With complete visibility into pending payments, the surprises of unexpected invoices are eliminated. There’s no longer a reliance on one individual having to remember when the invoices are coming. Every invoice is tracked, matched, and processed. The result? On-time payments, no risk of delays due to missed invoices, and a smooth shipbuilding process.
A note to our readers
This narrative is a piece of fictional storytelling, written by our resident maritime and supply chain guru, Tim Polson, to illustrate the practicality and utility of eye-share in real-world scenarios. While the story itself is spun from imagination, the challenges it presents, and the solutions offered by Eye-share are rooted in very real scenarios. Our goal is to foster a deeper understanding of how eye-share can be a key tool for bringing efficiency, precision, and simplicity to many different professional landscapes. If you’re intrigued by the potential of eye-share and wish to see it in action, we invite you to book a demo with us.