Why E-invoicing is in Focus Today & How will it Benefit your Business?
Although e-Invoicing is not a new technology, its relevance has grown multi-fold in recent times. The pandemic was the catalyst in pushing several procurement organizations to grow up digitally overnight and adopt touch-less technologies such as e-Invoicing for more reasons than one.
Having mandated it many years ago (as early as 2014), the American and European markets were the early adopters and have a higher adoption rate by now. On the other side of the planet, Asia Pacific is catching up at a fast pace. ‘In Asia-Pacific, e-invoicing market is projected to reach US$ 4,217.6 Mn by 2027 from US$ 1,241.7 Mn in 2019; One can expect it to grow at a CAGR of 17.1% from 2020 to 2027’ according to a report by Industry Today.
According to the latest Billentis report, ‘the use of electronic invoicing is estimated to grow by 11% this year in the B2B2G area, and 7% in the B2C APAC market’. Various APAC governments are well ahead on their journey with introducing e-Invoicing compliance norms. Australia & New Zealand, Singapore leading the pack with introducing mandates by 2019 – Singapore introduced the nationwide InvoiceNow initiative in 2019.
Hong Kong and Malaysia have also made significant progress on this front already, and nations like Japan, the Philippines, Vietnam, South Korea are planning to launch their e-Invoicing mandates by the end of 2022. India & Taiwan implemented an e-Invoicing mandate in 2020, and in the Middle East – Saudi Arabia is taking steps towards an E-Invoicing by the end of this year, and it will be mid-2021 for Kuwait and Turkey.
Given the growing relevance of E-Invoicing in today’s world, we have outlined some of the major benefits of adopting it. Read on to know why e-Invoicing is being leveraged by Procurement and AP-Finance teams worldwide. Starting with a quick refresher on what exactly is referred to as e-Invoicing.
What is E-Invoicing?
Electronic invoicing (e-Invoicing) is the invoice document exchange between a supplier and a buyer in an integrated electronic format. It fully automates the process of invoice capture with data being read and routed straight from the supplier into the buyer’s AP system regardless of the format of the invoice. Both suppliers and buyers can manage invoicing data on a central cloud-based platform.
What are the main benefits of E-Invoicing that procurement and AP-finance teams can leverage?
Streamlined & efficient processes that reduce the turnaround time
Due to e-Invoicing, organizations can receive invoices in any format from different suppliers, including image-based invoices. Electronic invoicing provides a single platform for managing all accounts payable information and processes. Business users can easily access, sync, and aggregate information between various systems and devices, with no duplication of content.
E-invoicing is important in helping organizations streamline their invoice processing cycles, reducing the man-hours required for invoice processing, approving, tracking, and chasing invoices and human errors. . Implementing it ultimately results in a much faster turnaround time. Enabling the team to leave behind tasks that are often repetitive and time-consuming by nature makes room for strategic tasks that add value. Overall efficiencies thus result in greater savings for the organization in terms of optimal utilization of resources and increased productivity.
Better Visibility and Transparency
Electronic invoicing uniquely improves visibility into invoices, purchase orders, supporting documentation, and contracts. It tracks invoices and provides detailed audit trails. All of the functionality is available through an end-to-end native mobile e-invoicing application.
You can ensure accuracy due to improved visibility and end-to-end tracking. You can also track invoice validation, approvals, and payment in real-time. This significantly reduces the errors and issues, ensuring no more accuracy issues, leading to overpayments and duplicate payments. E-Invoicing is thus an important factor for enabling a closed audit trail to simplify tracking and settlement.
An e-Invoicing system is more than just a platform for filing digital invoices. E-Invoicing enables a higher level of compliance with ease. It is especially necessary when it comes to regulatory compliance, e.g., Peppol being the norm in Europe and Asian countries like Singapore.
Greater visibility into trade and transactions also means a reduced risk of invoice fraud, human error, duplication, oversight, etc. Organizations can save countless hours and resources in time taken for cross verification and due diligence when an efficient system is in place that does not leave much scope for such risks to enter the processing cycle.
Insights into spend and savings
E-invoicing enables efficient tracking of every last dollar spent and saved. This essentially helps the leadership and procurement teams to track and gather strategic insights on cost centers and identify opportunities to save more, like early payment discounts. The data available on hand thus helps in better and more informed decision-making, saving both time and resources.
By making the switch to e-Invoicing, you can eliminate the requirement of paper-based invoices. In addition to being energy-efficient, you can reduce both the wastage and costs associated with paper-based processes used within your supply chain processes.
E-Invoicing has become one of the most strategic steps companies are taking towards digitization of processing cycles. With governments worldwide, especially in Asia, introducing mandates and working on implementing the frameworks to enable e-Invoicing such as Peppol, for example, it is the right time to invest in e-Invoicing if you haven’t already and take your business to the level.
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