As our home lives become more digital and the use of the internet for shopping and banking becomes normal, why is it still not as common across the workplace? Many organisations still depend on paper based processes for paying their suppliers and may be missing out on opportunities to make savings and efficiencies.
Traditionally many organisations have struggled to deal in a timely way with the volume of paper invoices that they need to process. Late payment can affect relationships with suppliers and in the worst cases damage the viability of local SMEs.
Many organisations are now scanning in the paper invoices or receiving invoices attached to emails and then processing them – in some cases using a printed copy of the pdf that was attached to the email. Too often these invoices are inaccurate or illegible and need further work to match them to an order before being approved, processed and filed.
It doesn’t have to be this way. Many commercial and some public sector organisations have adopted electronic invoicing solutions and are achieving impressive rates of touchless processing i.e. where the supplier’s invoice is submitted and automatically matched against the order and ready for payment to terms. An e-invoicing solution can help you lever more value from your back office operations and your finance system.
Interpreting some of the publicly available estimated costs and using a breakdown of the end to end P2P process, the indicative cost reductions from implementing e-invoicing range from £4.75 to £9.50 per invoice, and estimate that return on investment can be achieved within two years.
E-invoicing brings benefits to both buying organisations and to suppliers:
- Reduced manual effort – dealing with the post, opening emails, scanning, data entry, error correction and filing
- Improved compliance – invoices are validated before they reach you, reductions in fraud and duplicate invoices
- Improves transparency, enables mobile working and reduces the need for physical office and storage space
- Reduced late payments
- Reduced supplier contact – suppliers don’t need to chase up your payments team asking whether they have received the invoice, when will it be paid etc., they can access answers to these questions online. This also saves your suppliers’ time and effort
- Buyers and suppliers can reduce their stationery costs and their carbon footprint
- Buyers can support their social responsibility agenda in terms of effectively purchasing from local SMEs.
In 2014, the report of the Parliamentary inquiry into e-invoicing recommended that the government consider mandating its implementation across the public sector. Whilst this has not yet happened, EU Directive 2014/55, requiring acceptance of e-invoices by public sector organisations, must be transposed into national legislation by 2019 as part of the Digital Agenda.
With the spread of smart ‘phones, the technological barriers preventing suppliers from sending e-invoices are almost non-existent. Most modern e-invoicing solutions include a range of options for suppliers to submit invoices including structured pdfs and online portals as well as XML file for large volumes.
E-invoicing providers offer other value add options such as spend analytics, marketplace catalogues and supply chain finance, this latter enabling suppliers to improve their own cash flow.
Going beyond e-invoicing, there are solutions that add e-payments using embedded card technology to give selected suppliers early access to the cash and enable the buying organisation to achieve rebates related to the card use. So you could use a combination of e-invoicing and e-payments to reduce your operational costs and support your local and SME suppliers.
If you want to know more about e-invoicing and how it could benefit your organisation please contact Jim Lashmar on 07968 616 550 | email@example.com or Mark Sweeny on 07887 512165 | firstname.lastname@example.org
 Source: Basware and Bilentis reports