The evidence has been accumulating for decades that electronic invoicing, or e-invoicing, saves users considerable time and money. Respondents to a global study by The Institute of Financial Operations found that 56% of businesses using e-invoicing spent considerably less money processing invoices than those businesses using manual systems. So why isn’t every business using it today?
Invoicing isn’t (or shouldn’t be) manual labor.
For some businesses it’s simply a matter of inertia. For other businesses however, there’s a lingering concern that e-invoicing systems are too complex for their suppliers.
Nowadays, with the rapid advances made in e-invoicing usability, even small businesses are increasingly finding themselves the recipients of e-invoices from their own supply chains. Many businesses are seeing e-invoices evolve from a nice-to-have tool to a must-have tool. In addition, government policies favoring improved productivity and cost cutting have also help promote the adoption of e-invoicing.
Lastly, rapid advances in technology such as affordable cloud-based OCR solutions, standardization of electronic invoicing formats (cXML), e-government initiatives to make e-invoicing mandatory—especially in Europe, and globalization of vendor networks and online portals have all contributed to the market acceptance of e-invoicing.
Resistance is futile.
Despite e-invoicing’s overall market acceptance, there are some management teams who continue to believe that e-invoices are not user friendly and that mixing both paper and electronic invoices will result in chaos that can damage customer and supplier relationships. The reality, however, is that electronic invoicing users are reporting that those relationships are much stronger because e-invoices are faster to send and receive, easier to track and manage, and are far more accurate than paper processes.
This could also have a lot to do with the growing adoption of Procure-to-Pay (P2P) solutions. Integrated with electronic invoicing, a procurement solution can stoke a range of hard-dollar cost reductions. One of these is by making invoices simpler and touch-free — they’re flipped directly and matched automatically with the PO/receipt, improving operating efficiency, virtually eliminating redundancy and improving cash flow.
A cloud-based integrated invoice management solution helps improve productivity; eliminate redundancies such as invoice coding, automates data entry and accelerates the invoice-to-payment cycle through procurement and finance/AP integration. That reduces operational costs and facilitates invoice matching through automated invoice data capture. That metadata is then transferred directly into your data management solution to simplify sharing, verification and the approvals workflow.
Overall, you can sum up the need for e-invoicing with these benefits identified by the Federal Reserve:
- Reduce operating expenses by eliminating paper and data entry, and automating workflow such as invoice routing and approval.
- Optimize cash management by speeding workflow to enable payers to take advantage of early payment discounts and/or payees to provide invoices in a timelier manner leading to improved cash flow and working capital.
- Minimize risk of overpayments, duplicate payments, and fraudulent payments.
- Improve real-time/on-line view and traceability of all invoice-related documents and ability to archive online.
- Improve data quality, accuracy and access to critical business information by reducing manual inputting of information.
- Reduce complexity working with trading partners in multiple countries through enhanced, standard processes to improve compliance with tax requirements and other country or regional directives.
If you’re wondering how to successfully transition to e-invoicing from a paper-based or partial electronic system, learn how quickly you can replace manual errors with automated accuracy and schedule a personalized demonstration of Invoice Management on the Determine Cloud Platform.
You can also read how Spend Matters looks at world class e-invoicing in this whitepaper from our Resource archive.