Last week I read a very interesting article on how the paperless Supply Chain has taken its undeniable place in today’s world. While reading this great piece of information, I eventually concentrated on the word invoice. That seemed interesting…
Before writing this blog I was practically convinced that a great deal of companies already implemented such kind of solution, but I was wrong…very wrong.
Paperless invoicing, paperless invoice payment, electronic invoice payment, there are many different ways to describe this late, but vital part of the supply chain. However, today's most general accepted terms are e-invoicing / e-billing.
Out of the estimated 170 billion invoices exchanged by the global business and government sectors in 2014, only 26 billion were sent electronically, according to the latest data from e-billing and e-invoicing company Billentis.
According to this report, the slow adoption of e-invoicing in B2B is not different to for example the adoption of cloud technology. The main 2 reasons for this are: initial costs and the potential disruption for business during the implementation of new technologies.
That being said, both reasons are now redundant, says Robert Frandsen, managing director of InfoMotion. This because software solutions are nowadays available at a highly cost-effective price.
“Where once creating such a system would have involved bolting together components from a range of vendors, a full suite can now meet requirements from end to end.
Implementation has also improved. Rather than having to awkwardly jump from existing paper-based workflows to an unfamiliar new electronic system, companies can shift gradually, thereby giving staff time to adapt and become comfortable with new ways of working. By employing industry experts who use tried-and-proven implementation methods, a project's impact on daily operations will be minimal.”
Despite the slow adoption of electronic payment, companies seem to realise that the hurdle isn't that high anymore, as 75 percent of businesses plan to expand electronic invoicing and payment over the next 12 months.
Once the shift from the paper-based to the new electronic workflow is realized, the benefits will be immediately noticeable.The new system will effectively eliminate double-entry and paper-based processes.
The general benefits of e-invoicing
The No. 1 benefit of e-invoicing / e-billing, according to Billentis, is cost savings, and those savings have the potential to be substantial. Billentis’ research found that a fully automated electronic invoice process generates savings of 60 to 80 percent over traditional paper-based systems. But there are more reasons why (financial) management is keen on moving towards electronic payment solutions.
The hours spend on manually checking, approving and submitting the paper invoices will be replaced by exclusively human interference, in case of errors and exceptions. The handling of invoices will be just a few clicks away, freeing up FTE-time for more value-added or urgent processes.