EU Directive 2014/55/EU mandates public bodies to be compliant to receive and process invoices from their suppliers in a standardized electronic format.
However, there is as of yet no legal requirement for suppliers to submit invoices electronically. This is mainly to allow e-invoicing to first gain maturity amongst public bodies, especially in Ireland where there is a phased introduction of e-invoicing capabilities across central (mandated to be compliant by April 2019) and subcentral bodies (mandated to be compliant by April 2020).
However suppliers will be mandated at some stage in the near future so it makes sense for suppliers to start planning for digitisation. According to Billentis, the volume of European invoices sent electronically in 2019 increased by about 55% from 2018, due to the Directive. There are over 150,000 e-invoice receiving organisations connected across 20 Euro countries, plus Singapore, Canada, USA (Source: DIGIT).
In any case there are numerous opportunities for suppliers.
Improved relationships with your customers
Electronic invoicing allows suppliers to easily monitor what stage in the approval process an invoice has reached at any given time, leading to a more streamlined and transparent invoicing process.
As a result this provides suppliers with reassurance that their invoice is being handled efficiently and it also leads to less invoice status queries with customers.
Faster payments and more reliable cash flow
In the invoicing process, delays on the buyer side typically materialise in the form of manually routing, sorting and keying paper documents into back-office systems.
By automating the process, these delays are heavily reduced as data is immediately available electronically in buyers’ back-office systems. As a result, invoices can be paid on time, and suppliers can forecast cash flow with greater accuracy.
According to EESPA, the cost of processing a paper invoice can be close to €13 to the supplier. Depending on the level of automation, the net benefits can be savings of between €4 – 12 per invoice. An estimated €920 million in savings has already been recorded over the last three years through e-invoicing.
Many users have been able to reduce invoice processing costs by 50-75%, with a return on investment of over 60% per annum.
Cost savings mainly arise in the form of reductions in labour costs – that typically come in the form of printing and posting invoices as well as manually following up with customers to clarify invoice status.
Fewer rejected invoices
E-Invoicing enables straight-through processing directly through to your customer’s back-office system. Buyer’s no longer need to manually enter invoice data, leading to fewer clerical errors. As a result, invoices are less likely to be rejected and customers can process them – and send payment – without delay.
Increased productivity and better use of staff time
E-Invoicing provides suppliers with full visibility of invoice status in real time, reducing the need for status queries. Suppliers also spend less time printing physical copies of invoices and posting them to customers. Automating the process ensures invoices are fully authentic and also leading to a reduction in invoice disputes.
Celtrino have over 30 years’ experience in delivering electronic invoicing capabilities to businesses of all industries and sizes.
Contact us today to learn more about how we can help your business go digital today.