Who could argue with a process that helps companies save time and save money? Well, according to a recent survey of corporate buyers, not many of them when presented with an e-Invoicing or supply chain financing proposition. Find out why decision makers say now is the time to put the pedal to the e-Invoicing metal.
Why should businesses convert to e-invoicing? Popular responses are that it will save organizations time and money. There will be less paperwork, and with everything electronic, it will be easier. However, how true are all of these claims?
That is the big question that new research set out to answer. The fourth edition of this report aggregates market insights from industry experts, and also offers several case studies where businesses were successful in their switch to electronic options.
We’ll dissect some finer points of the report, and explain why professionals in B2B e-commerce, e-invoicing, supply chain finance and e-billing should look into the details of the report themselves.
Insights From Ariba
Ariba Senior Manager of Solutions Marketing Chris Rauen wrote a contribution piece in one section of the report, which explained how e-invoicing can help businesses enforce compliance and better manage cash.
According to Rauen, the power of business networks lets companies and their suppliers collaborate across the procure-to-pay process to ensure the enforcement of terms, which saves a significant amount of time and money.
“For complex, project-based services, a business network allows you to create an electronic invoice from a service entry sheet, and include additional documentation such as a bill of lading, time sheet or field ticket if required,” Rauen wrote. “With this collaborative approach, you enjoy a level of error-free invoice processing and compliance support for complex services that you have come to expect for products and services managed by purchase orders.”
Additionally, Rauen explained that with today’s business networks, organizations could also propose and earn incremental savings on virtually any approved invoice by offering early payment to suppliers in exchange for a discount. This can include a new type of “dynamic” discount, where businesses earn a discount on a sliding scale up to the due date of the invoice, Rauen said.
The Push For E-Invoicing
The report also gave examples of businesses that had found success through e-invoicing implementation. According to Susie West, the founder and CEO of sharedserviceslink, the opportunities that e-invoicing enables – such as dynamic discounting and supply chain financing – are the real reasons why businesses should make the switch.
E-invoicing must be seen as an enabler, or a means to an end, West explained. For example, West cited data about a bottling company that switched to e-invoicing in May 2012. According to the CEO, they had enrolled 87 percent of their suppliers after just six months, and confirmed an average of USD 505 savings per invoice.
Along similar lines, the report cited data from the annual Accounts Payable News survey, which found that one-quarter of all respondents expected to be affected by invoice financing in the coming 12 to 18 months. According to the report’s authors, this statistic further shows the importance of dynamic discounting, which is when payment terms are established between a buyer and supplier that accelerates payment for goods or services in return for a reduced price or discount.
“Of course, with a more manual process, it’s not really a feasible exercise – but with the growth in automation and e-invoicing, the business case becomes compelling,” the report said. “It’s a solution which offers organizations the opportunity to capture discounts from their suppliers on a sliding scale, meaning that even when payment terms slip past their agreed timeframe, discounts (albeit at a lesser rate) can still be taken…”
With this option, organizations can retain integrity with suppliers, and both parties will have better visibility and control of their working capital, the authors explained.
The Future Is Now
Through insights from industry stakeholders and associations, with expert views and customer cases, the report discussed numerous issues that business owners must keep themselves up-to-date on.
Just last week, PYMNTS.com discussed the rise of e-invoicing in Europe, and how the European E-Invoicing Service Providers Association members processed and delivered 840.7 million electronic invoices in 2013, an increase of 19.1 percent from 706 million a year earlier. Additionally, the association’s members processed 463.5 million B2B/B2G direct e-invoices last year, which is an 18.7 percent increase from 390.5 million in 2012.