Filling The E-Invoice Information Gap

Analysts continue to unleash frustrating statistics about businesses’ sluggish adoption of true digital invoicing procedures. According to new PayStream research, in conjunction with Corcentric, this lag is due to business owners’ lack of education in the space – for companies that have adopted e-invoicing, they enjoy better cash management through the most cost-effective accounts payable processing available.

Still, there are myriad challenges that the developers of e-invoicing technology face in getting businesses to adopt these tools, and that corporate buyers themselves face in getting their suppliers to get on board with digitization. PayStream dissects these challenges in its new research paper, “Increasing Electronic Invoice Adoption Through Strategic Automation.”

Companies Know The Benefits

According to researchers, businesses appear to be well-versed with the potential benefits of digital invoicing. In a survey, more than half (54 percent) of business professionals said the ability to reduce labor and processing costs is paramount when they consider adopting e-invoicing tools. Companies are also targeting fewer missing invoices, faster approval cycles and better visibility across the procure-to-pay cycle as key reasons to adopt the technology.

But in a story that’s becoming all-too-familiar, businesses are also reporting that their suppliers are sending their bills in an array of formats. Most companies said about half of their invoices come in paper format – emailed and faxed invoices were the next most popular choices. And nearly one-third said none of their suppliers sent electronic invoices.

PayStream analysts noted that while emailed and faxed bills are not e-invoices in the truest sense of the technology, there are still methods for capturing data in those documents, including in-house scanners, online portals and mailroom services. These tools, however, create yet another point of friction for businesses.

The Challenge Of eInvoicing

Overall, only about one-fifth of companies surveyed by PayStream said they have a full e-invoicing and AP automation service in place – and many aren’t planning to implement the tool.

According to researchers, businesses have some valid excuses for not planning to adopt e-invoicing. “Part of the reason e-invoicing solutions have such low adoption is because they are often difficult and expensive to set up,” the report found. “It is also difficult to get a significant amount of suppliers to integrate, unless the buyer is a very large organization with enough power to force their suppliers into participation.”

The integration with in-house and supplier systems was cited by nearly half of those surveyed as the main challenge in adopting e-invoicing tools. Gaining supplier adoption of the technology was also highly cited.

But according to researchers, these sentiments are based on outdated or inaccurate information regarding AP automation technology.

“Today’s cloud-based e-invoicing and invoice receipt solutions are growing easier to install and customize, nullifying many of the integration issues that have worried organizations in past years,” PayStream said. “Moreover, internal change management and lack of executive sponsorship are problems that can be readily addressed with the proper education about the benefits of eInvoicing.”

According to Corcentric Vice President of Product Marketing Rob DeVincent, this misinformation among businesses needs to be addressed. “Higher performing companies will look at e-invoicing as just one part of overall AP automation strategy, and when implemented in this way, the advantages in terms of cost savings, efficiency, and visibility into overall spend management are very compelling,” he said in a statement.

Not That Simple

Still, PayStream said that there are other hurdles to e-invoice adoption that are less easy to fix.

For one, the lack of government intervention – that is, the lack of government mandated e-invoicing in public procurement – is one reason why companies across North America are lagging behind their South American and European counterparts, the report concluded.

Further, the struggle to get suppliers to participate in an e-invoicing regime is equally as legitimate when companies decide to turn away from digital billing and AP automation. According to researchers, onboarding suppliers “involves forces that are not as firmly in the buying organizations’ control, including the lack of education among suppliers on the value of e-invoicing and the perception that adoption is not worth the trouble.”

Still, researchers contend that filling the information gap among suppliers can be effective at achieving e-invoicing procedures. The report notes that today’s B2B networks are most often free for suppliers, and cloud technology is making it far easier than it was before for suppliers to adopt these processes. In fact, many e-invoicing service providers are actually developing their solutions with the supplier in mind, PayStream said.

It’s this conclusion, researchers said, that corporate buyers should pay attention to: If they wish to adopt automated accounts payable solutions, they not only need to inform themselves about the technology, but they also need to address misinformation among suppliers – and develop their AP strategies with each supplier in mind. That means addressing the needs of suppliers that send their bills via email and fax, choosing a supplier-focused e-invoice solution. Most of all, analysts said that businesses must be consistent in their movement of digital billing strategies.

“It takes time and hard work to fully access the solutions’ potential savings and product value,” the report concluded. “Organizations should not aggressively pursue e-invoicing alone — they should expand their exploration of AP automation to consider a hybrid invoice receipt management system. This is the way to bring all parties and all systems together in a streamlined AP lifecycle.”