Is it time to embrace 100% digital finance?

Blog Best practice January 17, 2018

There is so much to gain by embracing digital finance. But just how easy is it to implement? Fredrik Rosenqvist explains how Pagero supports ERPs and businesses as they attempt the jump from working locally and manually, to digitally and globally.

A dizzying digital world

There is so much to gain by going digital. We’re told that in a digital world, businesses can communicate quicker, organise better and save more. We hear it all the time and it sounds perfect. But just how easy is it to implement?

For some, it can be a confident transition, but for others, the jump to digital finance solutions such as e-invoicing can be a leap into the unknown. If the transition to digital finance isn’t smooth, it can quickly turn into a nightmare of incomprehensible tech, mind-twisting legislation and a large bill at the end. For some businesses, the digital transition leaves people asking themselves, is this really working for us and are we really any more efficient than before?

“True e-invoicing promises transparency and savings that were previously impossible to achieve.”

It is clear that the jump to digital finance brings with it growing pains. The sheer speed of change can be exhausting for those businesses still finding their feet. For established industrial giants, the change is seismic and can cause all sorts of complications if done wrong.

Why embrace digital finance?

One of the fastest digital growth areas lies in e-invoicing. According to the Billentis Report, “The e-invoicing journey 2019-2015,”the total global bill/invoice volume B2C/G2C B2B/B2G/G2B for 2019 was in the region of 550 billion. True e-invoicing promises transparency and savings that were previously impossible to achieve.

Statistics have shown that in Europe, roughly 12.3% of all VAT revenue goes missing every year: roughly €150 billion. Governments in Latin America have introduced not only B2G (business-to-government) but also B2B (business-to-business) e-invoicing mandates. As a result, there have been considerable gap reductions. In Mexico, the tax gap was reduced by about 50% and the tax revenue in Brazil has increased by €60 billion.

As more and more countries begin to legislate to enforce the use of e-invoices to increase transparency and simplify their interaction with suppliers, companies are also turning to data-driven paperless invoices. They also see the cost savings and benefits of powerful data use combined with automation when it comes to overall efficiency.

Pagero helps you focus on what you do best

However large or small they are, all businesses with their sights fixed on working internationally have to appraise the best use of their time and resources. Non-digital financial transactions can prove complicated and time-consuming. Cross-border interactions present differing legal requirements since international customers often use differing systems.

Following the evolution of technology and changes in the law of each country, plus staying aware of which systems your customers are using all takes precious time away from your core business. Working internationally can mean that at times, the two ends don’t meet.

Pagero is an experienced facilitator for e-business transactions. Pagero recognises that compliance is one of the keystones in effectively digitalising both your local and international financial transactions. It can be difficult to follow country and market rules. If a business doesn’t adequately follow the rules, the business will be lost. Pagero offers clients our best practice and interpretation of each market.

“We take the pain out of the process by efficiently processing your data transparently and in real time.”

Once compliance is up-to-date and maintained, another area any growing business is concerned with as it operates at a larger scale is network reach. Pagero has roaming agreements with many other networks, including Peppol, to ensure maximum business reach. Pagero works transparently to ensure each business fully understands how to communicate with each other.

Data accuracy and real-time operation

Once you transition to 100% digital finance processes, savings and efficiency increase. These savings and efficiency have both small and large scale benefits, such as the previously mentioned VAT gap reduction. However, when so much data is involved, it is important for businesses to be careful of data loss or loss of control.

Maintaining business data as it moves digitally from country to country and ERP to ERP is one of Pagero’s key strengths. We take the pain out of the process by efficiently processing your data transparently and in real time with nothing being kept on offline systems.

With accurate data (such as pricing and invoice details), you gain more control and ultimately save more money. If your data is not accurate and you are receiving data on multiple formats, there is the possibility of losing data. Pagero can assure that no data is lost during transactions.

Partnered with your ERP system, Pagero’s knowledge of compliance, interoperability and global reach, and its emphasis on data accuracy will ensure that you will be able to operate confidently in an ever more interconnected and digitalised business landscape.

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