E-invoicing in Finland: how B2C can catch up with B2B e-penetration level?

Finland is relatively far in e-invoicing B2B segment but B2C is in a low penetration stage at the moment. So how come these two segments have followed different paths?

What happened in B2B side?

In traditional EDI-messaging, each company had to set up and maintain connections with each other. This meant that companies had about a hundred or so connections to its suppliers, they in turn had connections to their own suppliers and other companies they had business transactions with. In 1990’s Finnish Service providers together with Banks started to develop different kind of approach. Key target was to aim for Networked e-invoicing where each company is connected into network through one intermediator. Each intermediator maintains connections with others thus enabling said company to exchange information with any company within intermediator network. Intermediators maintain unified content requirements which allow e-invoices to be sent and received through the network regardless of the source or destination format of the data. Networked e-invoicing model is based on bilateral agreements (standards and technical demands) between a network of declared e-invoice intermediators (i.e. service operators and Finnish banks).

In a simple way - different parties in market developed unified model, which was followed by all of the key players (Service providers, Software vendors and banks) in the market. Also it was obvious that Finnish companies realized the business benefits when moving towards automated processes. And the result is excellent! Latest studies expect that Finnish B2B penetration is reaching already 60% level.

How about B2C?

Based on Itella Information’s latest study the adoption of electronic invoicing for consumer billing has spread rapidly in the Nordic countries. Denmark and Norway are currently in the lead in consumer acceptance of e-invoices, with Sweden close behind, but somewhat surprisingly the conversion to e-invoices has been slowest in Finland.

It is astonishing how much paper invoices are favoured in Finland, especially when we consider that Finland has been one of the pioneers of e-banking and online payment of bills. The wide and persistent gap between Finland on the one hand and Denmark and Norway on the other is also surprising.

In Norway and Denmark companies have been very active in introducing e-invoicing, and the extra cost charged for printed invoices has also boosted the transition. Denmark also discontinued direct debit payments earlier than the other countries.  

Different user groups?

So it seems the main difference is coming from the fact that user groups are different: consumers have not seen a clear benefit, while the B2B business benefits were obvious.

Weapons to speed up e-penetration?

All consumers participating in the study considered that information security is the most important aspect when it comes to e-invoicing. They also expect that it should be easy to switch over to using e-invoices and that information on the service should be readily available. Consumers are also motivated by the willingness to experiment, environmental concerns and the invoicing party’s recommendations.

However, still the most effective way of getting people to convert from printed invoices to e-invoices is by compulsion or strong persuasion. Consumers will accept e-invoices if nothing else is offered or if there is an extra charge for the printed version. It’s a hard fact but seems to be the only way before the masses are adopting e-invoicing as natural choice for receiving of Invoices.

Learn more about e-invoicing in Europe.

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