Why e-invoice adoption is crucial in 2021 and a guide to getting started

Blog Transportation Management Industry trends December 17, 2018

As companies rely less on location and more on working remotely, we take a closer look at how e-invoice adoption makes running your business more efficient, flexible, and reliable. John Larkin explains how e-invoicing helps companies gain control of operations and outlines a step-by-step approach to getting started.

Reasons to adopt an e-invoicing policy

Despite the implementation of a growing number of government mandates and initiatives, many organisations are still slow to adopt e-invoicing. The hesitance could be the initial time investment, technical incapacities or simply not being aware of the value of e-invoicing.

The current economic climate and fallout from the COVID-19 pandemic present new reasons to advance the digitalisation of financial processes. The situation has quickly shed light on the importance of enabling remote work and doing so efficiently.

“From legal obligations to cost-saving and green business initiatives, the reasons to adopt an e-invoicing policy are abundant.”

Introducing an e-invoicing policy is a sure-fire way for organisations to reduce costs, increase productivity and facilitate remote working. Eliminating paper and emailed invoices minimises time-consuming manual work, making time and space to focus on control and business strategy.

From legal obligations to cost-saving and green business initiatives, the reasons to adopt an e-invoicing policy are abundant and the benefits long-lasting. Discover more benefits as well as the differences between paper invoices, emailed pdfs and e-invoices.

Improving business relationships through e-invoice adoption

Getting a request from a customer or supplier to send or receive e-invoices is a significant driver to e-invoice adoption.

“More and more organisations are seeking ways to establish truly digital relationships with their business partners.”

In today’s connected world, more and more organisations are seeking ways to establish truly digital relationships with their business partners. Companies want to digitally connect with customers and suppliers to exchange business documents such as orders, order responses and invoices. In doing so, communication becomes faster and more transparent. All parties gain more control and visibility over their P2P and O2C cycles, resulting in reliable, trusting and long-term business relationships.

Where to start

So, if you’re new to e-invoicing or digitalised processes in general, where do you begin? As they say, “Fail to prepare…prepare to fail,” so do your homework first. Below are some important tips and milestones to help you along the way to e-invoice adoption:

  • Firstly, you need to examine the appropriateness of an e-invoicing policy for your organisation and review it in the context of your current business and ICT strategy.
  • Next, determine the quantity of invoices, number of suppliers or customers involved and the ability of your current ERP system to handle e-invoices.
  • How much does it actually cost your organisation to process invoices? The cost can range from €5 to €17 per invoice depending on your industry (Billentis 2019). Don’t forget to factor in the cost of hours lost manually entering data into your system, seeking payment approvals and chasing missing invoices.
  • Having carried out an initial review, you should then prepare a business case. Closely examine the likely costs and benefits to the organisation. Include a full description of the current paper-based process and identify processes that can be either improved, outsourced or eliminated.
  • Choose a proactive project leader and cross-functional team to prepare a detailed project plan. For an outbound e-invoice project, the team should include executives from Sales, Finance, IT and Credit Control. For an inbound project, involve Purchasing, Finance, IT and Accounts Payable.
  • The project plan should contain an analysis based on the business case and current processes and environment. Based on this analysis, you can develop a solution concept and outline an implementation plan.
  • Based on your needs and capacities analyses, a number of solution scenarios will evolve and guide your make or buy decision. Thorough examination of all your options helps determine whether to take a step-by-step or big bang approach to e-invoice adoption. Why re-invent the wheel? There are various solutions in the market you can implement at a fraction of the cost of an in-house solution.

Success factors in e-invoicing projects

Awareness and buy-in by senior management are essential to reaching the goals set up in the e-invoicing policy. Another essential player is one very active project owner and roll-out champion.

Good internal and external communication of the project is another critical factor for its success. It is also important to be realistic regarding the mid and long-term technical capabilities of the organisation, including workflow and archiving.

The technical capabilities of all trading partners involved must be taken into consideration as well.

Get the whole guide

This article is an extract from an in-depth guide to e-invoice adoption, written by the author. Want to dive into the details? Click the link below to download the entire guide!