Boosting B2B e-invoice adoption - carrot or stick?

August 12, 2013  |  Adoption, Electronic Invoicing, Procurement

Several studies have shown that in B2C e-invoicing, stick works well better than a carrot: penalty fee for paper invoice receiving has dramatically boosted the e-invoice adoption, especially in telecommunication and utilities. But what about B2B?

Materializing benefits from B2B e-invoicing

Most of the benefits of B2B e-invoice are on the receiver side. Though in most cases the receiver pays transaction fee from incoming electronic invoice, the savings in time and labor costs in the automated invoice processing are undisputed, estimations depending on the case can be up to 60-70%.

Traditional way of materializing benefits for big buyer organizations is to demand e-invoices from suppliers, offering limited amount of options for e-invoice sending: join the e-invoice service offered by the buyer’s service provider or start using invoicing portal dedicated to this one buyer only.

However, more open approaches have appeared recently and interoperability is coming into the picture, offering more choices to the suppliers and allowing already made investments to e-invoice capabilities to be utilized. Though the campaign letters from the buyers can be quite strict in wording, ending the business relationship due to failing to meet the e-invoicing requirement is not always the case. Buyers often extend the transfer period or settle for intermediate solutions such as digitizing of paper invoices.

For suppliers, e-invoice will usually satisfy only the customer requirements and may save some transaction and processing costs. But is there something else to be gained?

E-procurement and equal benefits

Most time consuming and critical process for the suppliers is the order management. If automation will be extended wider into the procurement process, the benefits will be more on both sides of the business relationship.

E-procurement is not an easy task and many have underestimated the challenges. In PEPPOL project (Pan European Public Procurement On Line), after 3 years of development and testing, only e-invoices were exchanged between the parties. But PEPPOL, where Itella Information was one of the first Access Point providers in production, is still alive and now, two years after the pilot project has ended, it is good to see Norwegians starting to use PEPPOL technology and principles (renamed and localized as EHF) for orders and order confirmations.

It is really intriguing to learn how all the local and pan European e-procurement initiatives will take off after all the time and efforts put into those. Especially interesting is to see, what kind of movement and acceleration the Commission’s e-procurement strategy and the call for e-invoice to be made mandatory for all public procurement by 2016, triggers. Let’s hope that the legislators, public sector buyers and all other industry players make sure that the benefits are shared equally to suppliers and buyers so that we see a bucket full of carrots instead of big stick.

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