Basware, the leading provider of purchase-to-pay solutions, and Billentis, the independent experts in e-invoicing, estimate that the number of B2B e-invoices sent globally rose by 20% in 2011, with large markets such as Germany, Mexico and France accelerating the adoption curve.
Legislative changes to mandate e-invoices or reinforce the value of electronic formats have contributed to this increase in adoption rates. These include:
- The announcement in 2011 by the U.S. Department of Treasury that by the end of fiscal 2012, all Treasury Bureaus will implement an electronic invoice processing solution as part of President Obama's "Campaign to Cut Waste" to improve government efficiency and cut costs for taxpayers;
- Mexico defined new legal requirements and mandated enterprises to exchange invoices electronically if the value exceeds a certain amount or if the enterprise generates revenues of at least 4 million Mexican Pesos (roughly USD $340,000);
- Germany, the Nordic countries and Benelux states introduced moderate legislation to encourage the use of e-invoicing but adoption was largely organic through a recognition of the benefits of automation;
- The 2010 requirement by the Finnish State Treasury for state agencies and institutions to receive only e-invoices from their suppliers;
- In 2012, countries such as Greece, Kazakhstan, Norway and Spain will enforce mandatory regulations around e-invoicing.
Globally, e-invoicing has been adopted by countries at different rates and the legislation varies between these regions. In Asia, specifically Japan and China, the electronic version of an invoice is only regarded as a copy and the paper version is required for compliance purposes. This is in contrast to other Asian countries, such as Singapore, Malaysia, Taiwan and South Korea, where the approach to e-invoicing is advanced and electronic invoices are accepted as official financial documentation.
Esa Tihilä, CEO, Basware, said “Legislation regarding financial records varies between regions. Companies using paper-based invoicing methods need to understand these legal variants to trade globally. E-invoicing technology removes this headache since it automates compliance with countries’ different legal requirements. Despite this benefit, concerns around financial compliance have led some countries to be cautious about removing paper completely to document invoice records. As more countries embrace electronic versions, businesses will start to reap the benefits of automating invoices.”
The recent global Cost of Control Fuzzy Finance report, commissioned by Basware, reported that investing in e-invoicing technology to increase productivity was ranked as the top activity that 52% of businesses are more likely to do now than 12 months ago.
In addition to the productivity benefits, the macro-economic environment is a significant driver for e-invoicing adoption across both enterprise and SME business. The increased focus on cash flow management and forecasting accuracy requires businesses to improve visibility of cash flow, and e-invoicing gives them this transparency.
Tihilä added, “The economic climate continues to be volatile and cash flow management is of critical importance as businesses strive to identify cost savings across the organization. E-invoicing gives businesses the ability to improve transparency of cash flow in real-time, and the increased rates of adoption seen in 2011 shows that businesses are realizing the benefits.”
Bruno Koch, an independent European e-invoicing consultant from Billentis, commented, “In terms of e-invoicing adoption, the world is dividing into two categories, those who see the value of electronic B2B invoices and those who put the value into paper as the official copy. Different models are emerging of how e-invoicing should be enforced, for example the Brazilian model is highly linked to obligation, but the success of this is dependent on cultural attitudes. Globally there is a long way to go before B2B e-invoicing is the standard but a number of countries are leading the way, and the automation of invoicing is being embraced by more countries year-on-year.”