In the rush towards increased digitisation within business it can seem as if some aspects of office life are being rendered into zeros and ones simply for the sake of it.
Is an online milk rota really more effective than a list pinned up next to the fridge? Can the simple perfection of the Post-it note ever be superseded by an app on your computer or phone?
However, there are some areas in which digitisation has the capacity to transform the way a company conducts its business while also saving it significant amounts of money. Invoicing certainly falls within this category. As anyone who has been in business knows, traditional invoicing can be a tedious and often risky process with those precious pieces of paper entrusted to the vagaries of internal or external postal systems.
It is little wonder new figures from the European E-invoicing Service Providers Association (EESPA) show a steep rise in the use of electronic invoices by businesses. EESPA reports among its members, which includes Tungsten, some 986 million electronic invoices were processed in 2014, an increase of 17 per cent on the previous year.
An electronic invoice is cheaper to create and administer than its paper predecessor, largely because the whole process is automated. A recent report from Billentis suggests the average saving per electronic invoice is £4.80 which, with a bit of number crunching, suggests that the total saved by EESPA members across Europe in 2014 was a figure in the region of £4.8 billion. That’s a lot of money by anyone’s standards. But the benefits of e-invoicing extend further than just cost savings.
Another welcome benefit of binning the paper is gained in a company’s protection against fraud. Last December the UK government issued a statement warning of fraudulent activity after people received fake invoices from the European Patent Organisation. Fraudsters had gone to a lot of trouble to produce documents that looked virtually identical to the invoices issued by the patenting body, but with different bank account details. Scams like this are an increasingly common occurrence.
Action Fraud, the police body set up to tackle the issue, cites invoice scams as among the most common variants of financial fraud, potentially resulting in multimillion-pound losses. Electronic invoice systems have been designed to tackle these fraudulent practices by the simple and effective process of linking suppliers and customers with a unique digital purchase number. This means a fraudulent invoice becomes impossible to process and very easy to spot.
E-invoicing also has the potential to greatly improve buyer-supplier relationships. As both parties can monitor the processing of invoices at the touch of a button, it makes it easier to monitor what stage in the approval process an invoice has reached at any given time.
Suppliers feel reassured their invoice is being handled effectively, but cost savings are another pleasing benefit. If you measure the time it takes to call and follow up each invoice individually – potentially listening to some terrible hold music in the process – it soon adds up, as does the level of impatience.
The importance of an easy working relationship between businesses should never be underestimated, nor should the costs of potentially having to find new suppliers or scramble for new contracts. In short, e-invoicing offers a range of benefits to companies of all sizes, making it easier to do business and building stronger relationships along the way.
Automation also releases resources for more productive work and accelerates decision-making, not to mention creating a mass of transparent data. Maybe it is something your business should consider? Perhaps you could write a note to remind yourself and stick it next to the milk rota by the fridge?
☛ Charles Bryant is European affairs adviser at Tungsten