No e-invoicing without invoice automation?

With e-invoicing we usually think of sending invoices electronically. And that makes sense. In the first place, we - including the legislators- all use the phrase e-billing or e-invoicing and not e-receiving. In addition, several different models for e-invoicing to be in place. Such as e-mail, web presentment, a banking environment and EDI. And there are also all sorts of national, pan-European and international initiatives to encourage the adoption and use of e-invoicing.

The impact of e-invoicing
We leave the consumer environment for what it is and look at the impact of e-invoicing in the business environment. Normally each sales invoice form the sender becomes a purchase invoice for the recipient. With e-invoicing each electronic sales invoice for the sender becomes an electronic purchase invoice for the recipient.

Background
But what makes sense is not always good. And that is a bit the case with e-invoicing. The question is whether all this emphasis at sending part of e-invoicing is good enough for e-invoicing taking really off. Of course, there are many obstacles and assumptions that are currently being removed. Such as unclear tax legislation, lack of standards, inconvenience and the assumed complexity of e-invoicing. But what all these obstacles and assumptions have in common is that they tend to focus on sending e-invoices.

The question is what is being done to promote the receiving end of e-invoices? It seems that there is an opportunity for acceleration in the adoption and use of e-billing. This calls for some explanation.

There are two concrete clues that the recipient has a key role in e-invoicing. In the first place, according tot the law, the recipient must agree to receive an electronic invoice. This applies especially to payable e-invoices: invoices whereby the payment after the receipt of the invoice is to be initiated by the customer.

The second indication comes from the recipients themselves. Consumers are not very fond of the arguments that should get them to switch to e-invoicing. For companies and organisations another issue plays an important role. If they are to switch to receive e-invoices, they would like the invoice data imported directly into their records. Why? Because it created this enormous savings.

The growth of e-invoicing guarantees us not only that a huge amount of e-invoices will be sent, but also that a huge amount of e-invoice has to be received en processed. That is not a bad thing, because it creates major opportunities for (financial) supply chain digitisation. (Financial) supply chain digitisation means that chains (such as between senders and receivers) are rather tightly connected, which is beneficial for all participants in that chain.

But, to harvest the benefits form chain digitization, we should not only pay attention to the electronic transmission of e-invoices, but also to the electronic processing of those invoices. As I said consumers experience is no real financial advantage when switching to receiving electronic bills. That is offset to a large extent by companies and organisations.

Research has shown that a company or organisation can at least save a fourfold with a well-received and processed electronic invoice, compared to the sender. These savings result from the cost items, book numbers, billing rules, delivery notes and other aspects associated with receiving and processing an invoice. So if a supplier could save € 2 per e-invoice, the receiver can save at least € 8 per e-invoice.

The receiver’s key position on the adoption and use of e-invoicing is not only motivated by law, but also with a strong financial argument.
Processing of electronic purchase invoices
Summed up:

- E-invoicing is promising
- A sales invoice from the sender is a purchase invoice for the recipient
- An electronic purchase invoice that can be processed well by the recipient provides many financial benefits.
- The recipient must agree to receive electronic invoices.

There are two possibilities for receiving and processing electronic invoices:

- Use the right channel and format to let the receiver import and process the e-invoice into the financial software.
Billing Service Providers can do this particularly in their role as ’super translators’. In addition, banks in cooperation with online accounting software also present interesting possibilities.

- Ensure that there is a (read: 1) standard that is within and between chains can be communicated.
This is very desirable and valuable. The question is whether we can realistically expect that within a few years this will be available.

In both cases, the inconvenient feeling for the recipient that he or she is importing ‘a pile of electronic received financial data in the financial system’ remains. This feeling is also referred to as the fear of ‘lights out processing’.

* For the purpose of this featured article e-billing and e-invoicing are both mentioned when using the term ‘e-invoicing’.