7 Golden Rules for Electronic Invoicing – Dispelling the Myths

Director, Center of Excellence, Global Sales

Most modern businesses and governments understand the benefits that electronic invoicing can bring to their respective organization. They can point to improved cash flow visibility, cost savings, and more efficient invoice processing overall.

They’re also more environmentally friendly.

That said – did you know around 3 billion e-invoices were sent in 2011, in comparison to a staggering 30 billion paper invoices?

So, the question emerging here is, if the benefits are clear and pressures are mounting to switch to electronic invoicing (often due to government mandates in certain regions), why hasn’t every business made the switch from laborious paper-based systems?

I’ll be running a series of blog posts looking at the common myths about e-invoicing, outlining the reality alongside the not-so-true. The myths have been split into seven areas that I’ll look at individually starting with rule number one.

Be sure to keep your eyes peeled for more information about further posts by following Basware.


Rule 1: Know the difference between e-invoicing providers

While the majority of electronic invoicing providers are continuing to evolve to increase the value they deliver to their clients, naturally certain providers are able to offer more specific capabilities and have reached a greater maturity in the market.

What this means is that the more established operators among us are able to offer businesses technology that has proven credibility and productivity. In short, this translates to the fact that these operators understand how to make e-invoicing work in the modern business landscape. They know the benefits and barriers that must be overcome, and they can deliver bespoke programmes to meet the needs of their customer base.

Open vs closed

Beyond the technical differences between operator’ offerings, there is also a difference in the philosophical ideas that make up the fundamental structure of their services.

Confusing, I know, but bear with me.

Essentially there’s an important distinction between those who advocate a closed network approach and those who believe in an open network.

In a closed network, operators rely on developing a massive number of suppliers who are all equipped to work in the way their network specifies. While this virtually guarantees interoperability among its own users, it’s a very expensive model to maintain, and suppliers in particular can incur unexpected costs. While closed network advocates would argue that people in their systems could start e-invoicing quickly, the reality isn’t quite so. That’s because a closed network is, by its very nature, not interoperable with other systems, so you would only be able to deal with other suppliers associated with that network. This means that should you want to work with one that isn’t in that network, you’d have to persuade them to join. You’re effectively locked in, and it’s quite limiting.

The biggest challenge with any e-invoicing initiative is to get suppliers onboard – that’s why we focus heavily on making supplier activation easy and painless. An open network enables you to work with virtually any supplier and with other e-invoicing operators – it has the minimum number of barriers to getting ‘up and running’ when making the switch from paper-based systems. This is why the vast majority of e-invoicing operators favor the open, interoperable model.

A further consideration is operator focus. For some, e-invoicing is a major component of their business. As such, they are more driven to ensure you get the best service possible. And they work harder to activate suppliers because they know that this is core to success.

For others, e-invoicing is simply an additional service, and these operators will tend to be in areas such as consulting or credit services. As a result, they may well treat e-invoicing as a loss-leader and won’t give it the attention it deserves.

There’s plenty to consider in the open/closed and core focus/additional service debate. Ultimately, though, if you are to reap the rewards on e-invoicing, it should be given the due dilligence it requires to succeed.

Category: E-Invoicing