There are many compelling reasons pushing businesses in the U.S. and around the world to change the way they are buying and selling goods and services. For one, the old manual method of processing invoices is broken. This time-consuming manual process is error-prone and too often results in lost invoices, delayed payments and subsequent penalties, as well poor visibility and control over finances. In today’s business climate, it’s imperative for companies to be aware of their financial liabilities and be able to manage cash and working capital more effectively.
Compounding this problem is an emerging trend for some large companies to hold on to their cash and extend payments to suppliers for even up to 60-90 days. This is putting undue pressure on suppliers, creating cash flow issues and in some cases, jeopardizing their financial stability.
With social, mobile and cloud technologies readily available, it’s easy for companies to transact with their trading partners through e-purchasing, e-invoicing and e-payments. Business commerce networks like our open Basware Network are enabling companies of all sizes to cut down the time it takes to send and receive an invoice from about two weeks to instantaneously – so the problem of missing, lost and error-prone invoices becomes a thing of the past. And the transaction costs for sending an invoice using the Basware Network drops significantly.
According to a recent study AP's New Dawn, 2013 by Ardent Partners, a leading research and advisory firm, there is a huge upside for companies who implement world-class AP practices under the direction of AP change makers. They are reducing invoice processing from 13.5 days to 3.3, and are also reducing the cost from about $19 per invoice to $2. These companies are also benefiting by gaining critical visibility and control over their invoices.
Coupled with new e-payment strategies that will enable suppliers to be paid more quickly without affecting the cash flow of buyers, the case for e-invoicing is overwhelming. While currently estimated that only 7-10% of the U.S. market is engaging in e-invoicing, the tide is turning. It’s no longer a question of “if” companies will embrace e-invoicing, but rather “when.”