The Adoption of E-Invoicing

E-invoicing significantly impacts important issues of your organisation:

• Improve accuracy by eliminating input and recognition errors;
• Reduce risk of incorrect payments by eliminating input and recognition errors;
• Automate repetitive and time-consuming tasks through automatic receiving and touchless matching at the line level;
• Reduce lead times in the process through automation;
• Reduce checking work in the process;
• Increase productivity and support business growth without additional resources;
• Reduce risk of fraud and phantom invoices by using secure communication channels such as PEPPOL.

Despite these major advantages, electronic invoicing is not yet widely used. The adoption of electronic invoices is gradual because of:

1. Availability

   An invoice processing solution is usually managed by the finance department. This department is usually not equipped with specialised IT knowledge. As a result, there is a perception that e-invoices are not sufficient for their organisation. The impact is recognised to a lesser extent because the bigger picture is missing. Therefore, it is important for IT and Finance to partner in this digital journey. In practice, we see that there is often no time and support for this topic. In the latter case, check with your software vendor; they can share knowledge and plan resources.

2. Chain collaboration

   Many organisations focus on improving internal processes by looking, for example, at improving recognition rates. The procurement function is often limited. This is why the supplier landscape is enormously diverse, insufficient consultation with the supplier takes place and no agreements are made about file exchange. Working together in the chain offers benefits for both parties. It is important for Finance and Purchasing to work together to create awareness of Finance's requirements. Procurement can respond accordingly when negotiating and talking with suppliers.

3. Standardise

   Another common reason is that the vendor cannot send an electronic format. The ERP system at the supplier does not provide for such export of invoices. John: “Obviously, a standard format is desirable and we see standards and capabilities increasing in the market. Often an export can be created, but in a different digital format. Technology today increasingly provides for such conversions to the correct format. Standardising allows organisations to automate more.”

4. Where to start

   Many organisations struggle with the shift to electronic invoice processing. “Start small first, with the top 10 suppliers, for example, and expand later. Get advice from a specialist in this field. Many providers of invoice processing solutions have insight into the range of providers and organisations that have the capability for electronic invoicing and the technology which is available,” John said.

5. If you don't measure, you don't know

   To make a business case, it is important to understand the options. Best-in-class organisations process between 85 and 95 percent of incoming invoices electronically. With such percentages, it becomes possible, depending on industry and degree of standardisation, to process 40,000 to 50,000 invoices per year per FTE. Keep in mind that with higher e-invoicing compliance, other KPIs will also improve. Things such as reducing lead times, increasing (touchless) matching rates and minimising errors. With a business intelligence application, results can be measured.

It is irreversible: electronic invoices are becoming more commonplace as governments mandate or encourage their use. John concludes: "Technology is increasingly providing for the processing these messages. The finance function is automating further in part because of e-invoices, by shifting from checking and manual entry work to analysis, insights and predictability."

Realize significant cost savings for invoice processing with AP Automation.