Electronic invoices – the first step in accounts payable automation – are growing worldwide. According to Ardent Partners, a research and advisory firm focused on supply management, 29 percent of companies are implementing e-invoicing today, while 55 percent are contemplating a switch in a couple of year’s time. The independent international e-invoicing consultant and market analyst Billentis Research said that a company can achieve up to 80 percent cost saving by implementing e-invoicing and automated invoicing processes.
How E-Invoicing Systems Can Boost E-Commerce
In a fast-paced business environment, organizations seek to conduct business with their vendors, suppliers or venture partners in real time. E-invoices can facilitate this close collaboration, regardless of the location of their business associates, by supporting the formation of worldwide commerce networks. Such global-scale networks make it possible for global partners to automatically transmit or receive e-invoices and e-payments regardless of where they are based. Approximately 19 percent of companies are using business commerce networks for instantaneous delivery and receipt of e-invoices. One of the Ardent Partners surveys indicates that this number is likely to rise to 41 percent within a couple of years. By helping bypass the approval bottlenecks, these new systems are helping to speed up the entire payment process. With fewer lost and missing invoices, delayed payments have become rare. All these are fueling e-commerce growth across the borders.
Government Initiatives Worldwide
Recognizing the tremendous potentials of e-invoicing, governments around the world are emphasizing at advancing e-invoicing and related infrastructure. There are several other factors that are prompting the governments to aggressively pursue e-invoicing – the authorities consider that e-invoices will facilitate more effective tracking of invoices, which in turn will improve tax compliance. Efficiency gains and cost reduction are two other driving factors for the governments’ interest in digital invoicing.
More than 50 countries have already adopted or are seriously considering to mandate e-invoicing. In an effort to boost borderless commerce, the European Union has not only made e-invoicing mandatory for government procurements, but has also created a uniform standard for inter-operable e-invoicing systems. The US government was quick to follow suit and implemented e-invoicing for its Treasury Bureaus. The investment is expected to cut down processing costs by almost 50 percent. At present, over 80,000 government vendors use the federal government’s Invoice Processing Platform (IPP).
Integration of E-Payment Systems for a Seamless, Border-less E-Commerce
While e-invoices have significantly expedited e-commerce transactions worldwide, it has yet to overcome a few more challenges. For example, an integrated payment gateway can solve a lot of vendor payment issues. Along with governments, the e-commerce industry is pushing for innovative e-payment technologies to complement their e-invoicing systems. Hence, the industry is slowly moving toward a system that combines invoicing with e-payment solutions. This innovative approach will allow instant payment disbursement upon invoice approval. This, in turn, is expected to promote not only seamless e-commerce transactions, but also improve bill processing accountability and accuracy. E-payment-integrated invoicing solutions can also strengthen relationships between trading partners and ultimately lead to real-time, cooperative commerce.
Payment management is often complex, especially if you have a large, global vendor network. The transition from paper invoices to electronic versions is a good example of how technological advancements can simplify cumbersome manual procedures. From scanning paper bills to assuring tax compliance and from including new vendors into the system to gaining control over the entire payment process – electronic invoices allow businesses to take their AP management to the next level. An increased use of cross-border invoices is expected to boost global e-commerce sector, but first the governments should address the needs for standardization of laws and regulations governing the validity and governance of e-invoices.