Billentis is a world leader not only in digital procurement solutions but in education of the benefits of e-invoicing. Most recently, the firm partnered with e-invoicing service provider Basware for a research report, published last month, that explored the new era towards which the digital procurement space is headed.
Researchers found that e-invoicing is expanding at a rate of up to 3 percent a year — a solid, steady growth thanks to government mandates and enterprise implementation. There is no one reason why governments and businesses adopt electronic invoicing, but the array of benefits — increased transparency, greater payments efficiency and saved time and money — offer a reason for nearly everyone to adopt digital procurement methods.
Billentis’ recent study suggests that e-invoicing is in the midst of a mass adoption. Yet the company’s even more recent report may serve as a wake-up call to the global market: Just a tiny fraction of all the world’s invoices are digital. Even in 2015, it seems, the industry has a long way to go.
Still In Early Stages, But Steady Growth
Despite all the talk of mass e-invoice adoption, Billentis has found that only about 42 billion of the world’s estimated 500 billion invoices are digitized. That figure amounts to just 8.4 percent.
Why are the numbers so low, even with increasing government mandates? According to the industry report, sponsored by supply chain management firm Celtrino, the digital billing sector remains in its infancy. But researchers agree that those figures are sure to change.
While the e-invoicing market, on average, sees up to 3 percent growth every year, Europe alone experiences e-invoice expansion as high as 7 percent, and that’s not even counting various EU-led initiatives that promote paperless procurement across the region.
For Celtrino Managing Director Ken Halpin, the latest findings from Billentis confirm that despite the relatively small e-invoicing market today, the industry’s potential is impressive. That potential, researchers found, can be attributed to the ability for digital billing to outperform all key aspects within the Accounts Payable and Accounts Receivable spaces. AR departments, Billentis found, can save up to 59 percent through digitizing their billing practices, while AP departments can save as much as 64 percent.
Much of those cost savings stem from e-invoicing’s ability to prevent errors that occur through the manual process of paper invoicing. The latest figures show that incorrect information found on paper invoices led to more than 15 percent of B2B payment delays in Europe alone.
More Than A Digital Document
Key to Billentis’ findings is the discovery that electronic invoices alone will not do much to help productivity and save money. Researchers concluded that while paper invoicing leads to high error rates and payment delays between businesses, simply emailing or scanning an invoice has no effect on those inaccuracies.
That is because e-invoicing is only the first step to a wholly digital supply chain. According to Billentis, automating the invoice process accounts for only about one-third of the potential within supply documentation. Innovations like Big Data and analytics, the study found, have the ability to unlock immeasurable potential in a completely digital supply chain — beyond the bill.
According to Celtrino’s Halpin, his customers experience less than 1 percent payment delay due to inaccurate invoice information, a figure he says is connected to e-invoice service providers, like Celtrino, and their ability not only to digitize invoices but to offer automated processes like data input and payment settlement notifications. More robust automation, the research suggests, leaves less room for human error.
Researchers are certainly excited about the potential for high-tech, sophisticated supply chain and B2B payments innovations. Experts expect these tools will save money and time and provide corporate treasurers and business owners with greater insight into their cash flow than ever before.
But despite the excitement, one element of Billentis’ research may serve as a bit of a reality check: We are nowhere near mass adoption of an entirely digital supply chain, and we have a long way to go before the global economy accomplishes even the first step of such a process — digital invoicing. The excitement is there, and the market is growing. So while the digital supply chain is not a pipe dream, industry players will have to wait patiently for its arrival.