The business case for e-invoicing

Director, Center of Excellence, Global Sales

Cost saving is one of the primary reasons why a business may undertake a new system or process. This is doubly true during times of economic uncertainty, and e-invoicing is no different.

In fact, according to Basware's 2012 Global E-Invoicing Study, 94 per cent of businesses believe e-invoicing helps to improve operational efficiencies and 61 per cent of those adopting e-invoicing reported achieving cost savings on receiving invoices.

An other recent report, E-Invoicing / E-Billing - The catalyst for AR/AP automation, conducted by independent e-invoicing expert Billentis, shows that while issuing a paper invoice costs approximately €11.10 (including printing the invoice and posting the envelope, payment reminders, remittance and cash management and archiving), an automated, electronic version costs just €4.70. This equates to a saving of 57 per cent. Similarly, when comparing the cost of receiving, entering, validating, managing any disputes, handling payment and archiving costs, on average, €17.60 for a paper invoice, compared to €6.70 when done electronically – a 62 per cent saving.

There is no doubt that these figures make for a compelling proposition for transforming from paper to e-invoicing. In fact, the ball is rolling and has clearly gained enough momentum that trend is now inevitable; it’s just a question of when and how.

The numbers speak for themselves, but the other reason we can say this with confidence is because as more companies move to e-invoicing, so they increase pressure on their suppliers and customers to follow suit. This creates a virtuous circle that further accelerates adoption.

Of course, the potential savings vary from company to company, and even from country to country. The exact costs will depend on a variety of factors including the size of company, the number of staff involved, the number of invoices and bills processed, even the cost of banking and postage. As such, it's imperative that any employee looking to put forward a case for moving to e-invoicing should do some more precise calculations, based on their company's specific circumstances.

Furthermore, as the report indicates, the potential savings can come from a lot more than just saving on a few stamps or reams of printer paper. Instead, being able to automate the entire invoicing and payment procedure can help to deliver a host of process improvements and efficiency gains. This can also lead to faster payments from customers and quicker payment of suppliers, leading to better cash flow and healthier supplier/customer relationships.

And for those worried about the costs of migrating from 'tried and trusted' paper invoicing to e-invoicing, thanks to the advent of cloud-based services, it's now very inexpensive (of even free for small volumes) and getting started with these systems is a very simple, straightforward process.

Within Basware, we have calculated for an example that, for a company that sends around 5,000 paper invoices a month, moving to e-invoicing will see a complete return on investment in a maximum of a few months – and in most cases it's actually a few weeks.

It's clear that we're at a tipping point on the road to e-invoicing being the normal way of conducting business. In a modern, digital age, paper invoicing is an expensive, error-prone and manually intensive process that most businesses cannot afford to accommodate. The move to e-invoicing is not only cost effective, but can streamline the business and help create closer relationships with customers and suppliers – benefits, no organisation can afford to ignore.

Category: E-Invoicing

Billentis Research Report 2013

The catalyst for AR/AP automation

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