E-Invoicing, in its most basic, is the sending and/or receipt of tax complaint invoices in an electronic format. Here, Scott Harkin explains how transitioning to an E-Invoicing system could help your business.
In a more complex requirement, E-Invoicing is the sending and/or receiving of invoices in a format manageable by another process. For example, a company has an automated account payable process and requires their vendor invoicing to be issued in a very specific format for automatically reading and processing.
Of the current estimated 500 billion invoices being transmitted currently worldwide, it is an estimated that only eight per cent of them are e‐invoices. This number is estimated to grow at a level of about 20 per cent per annum over the next few years. This rate varies from country to country. The growth we have been seeing in the take‐up of e‐invoicing and automated accounts payable has really been driven thus far by government and big business, purely because automated accounts payable solutions have come at a cost that has been prohibitive to all but the largest organisations.
This is beginning to change and the functionality and benefits are now coming into the reach of the small and medium market. Just considering the use of e‐invoicing can bring significant efficiency and cost benefits. The cost of issuing and receiving E‐Invoices and utilising automated accounts payable processes can be 60-80 per cent less than those of manual and paper based processes.
Looking at the above schematic, it is easy to appreciate the operational benefits and cost benefits to be gained by both the supplier and their customers. Consider the conventional invoice issuing process compared to e‐invoicing. The actual non‐value add touch points of each invoice become practically zero and the speed of interaction with your customer’s account payable becomes almost immediate. Over hundreds or thousands of invoices each year, this adds up to some substantial time to be regained for real value-add activity.
All SME business owners should consider taking the next step and transitioning to an E-Invoicing system, if they haven’t already, and look to issue their invoices in electronic format, such as a system generated PDF using email.
Scott Harkin is Founder of ProcNet Services.
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