Don’t get left behind - why businesses must be the driving force for governments to go paperless (Part 2)
Monday, 28 Sep 2015
The recent shifts across the world towards e-invoicing, for example the latest public sector e-invoicing inititaives in the UK and US, have many positive benefits for businesses, especially small businesses. Cash flows around the economy faster, reducing the chance of failure as payments can be collected on time, and encouraging re-investment of capital.
Senior Product Marketing Manager
The recent shifts across the world towards e-invoicing, for example the latest public sector e-invoicing initiatives in the UK and US, have many positive benefits for businesses, especially small businesses. Cash flows around the economy faster, reducing the chance of failure as payments can be collected on time, and encouraging re-investment of capital.
Faster payment times boosts economic trade, giving businesses more opportunities to trade, and the cash savings made by the government can be used to invest in public infrastructure, supporting the growth of small businesses in other ways.
Naturally, every country faces different challenges to adoption of e-invoicing, but there is no denying that all will benefit. We explored these factors in our recent White Paper, ‘Why are governments not paperless?’. In Europe, for example, economic stability means businesses are most likely to benefit from cost and efficiency savings. Processing a paper invoice costs an average of €60, which could be reduced to €6 using e-invoicing; a pretty significant saving for a relatively small change in approach.
While in South America, the real driver for e-invoicing is achieving greater compliance, control and preventing fraud. Businesses in countries such as Chile, Brazil, Costa Rica and Mexico are collecting payments faster and lowering costs while the government is tracking tax revenue accurately. For example, Brazil has seen a 30% increase in its tax to GDP ratio, excluding social security contributions.
Nevertheless, while governments can take the lead in making e-invoicing a reality, it is businesses themselves that must drive the change. If businesses send invoices electronically, adoption rate will increase and savings will too.
E-invoicing is still at the early adoption stage. It requires open standards and a cultural shift in many markets to become commonplace and accepted, but ultimately business buy-in is critical. Our Basware Network, the largest open business network, was created to encourage and simplify adoption of paperless billing for businesses worldwide, and enable easy collaboration between buyers and suppliers.
The private sector can’t sit back and wait for the public sector to make progress. Businesses of all sizes must realise the benefits and embrace the shift to e-invoicing, or risk being left behind.