Print

E-invoicing market in Western Europe

The e-invoicing market continues to grow, with recent surveys suggesting 30%-40% of organizations plan to implement invoice automation over the next three years.

Key drivers are a desire for increased visibility and control, combined with a process costs reduction and approval cycle times. However, maximum benefit only occurs when suppliers submit invoices electronically through a collaborative network, and getting suppliers to join these networks is a challenge.

 

 



The value proposition to the supplier must be the core messaging when it comes to implement the project:

  • Reduced operating costs, such as no more mailing of paper invoices.
  •  The promise of getting paid on time, or even sooner, by agreeing to an early pay discount term
  • The ability to implement in a fast path without too many resource implications.

 

The e-invoicng market continues to grow, with recent surveys suggesting 30-40% of organizations plan to implement invoice automation over the next 3 years. Key drivers are a desire for increased visibility and control, combined with a process costs reduction and approval cycle times. However, maximum benefit only occurs when suppliers submit invoices electronically through a collaborative network, and getting suppliers to join these networks is a challenge. 

The value proposition to the supplier must be the core messaging when it comes to implement the project:

1.              Reduced operating costs, such as no more mailing of paper invoices.

2.              The promise of getting paid on time, or even sooner, by agreeing to an early pay discount term.

3.               The ability to implement in a fast path without too many resource implications.

 

For the buyer, such early pay discounts are more achievable than ever, thanks to the fast and efficient processing options of e-invoice presentment and payment (EIPP). Here again, the number of buyers using EIPP to take advantage of early pay discounts is comparatively small. Suppliers must rely on the buyer to take advantage of the early pay discount and all too often, when cash is tight and suppliers need it most, buyers opt to give up the discount and pay later.

Furthermore, the discount term, while often a great deal for the buyer, is costly to the supplier. By accepting a 2% discount for receiving the payment 20 days sooner, the supplier is offering the buyer a 20% return on investment (ROI). 





More effective cash management is the best reason to consider EIPP. Every euro saved in operational efficiency and every euro freed through DPO extension is extra working capital to apply to your organisation’s true mission: investing in the business and not in the payables. 

Once invoices are electronic, with EIPP using customer-defined workflow functions and business rules to simplify the entire approval process, customers can set up automated approval tolerances and/or manual review thresholds. They can further enforce corporate policies by building workflow around the organisation’s approval hierarchy and the user’s signing authority and role. 

These automated business rules also identify audit exceptions, such as duplicate invoices, prior to payment. When exceptions are flagged, customers can use EIPP to automate exception management, ensuring invoices are audited and suppliers are validated before any payment is made.



 EIPP adoption is rising quickly. With the proliferation of alternate settlement and supplier financing options, EIPP is on its way to reaching critical mass. The time for your organization to explore EIPP market in Europe is now.

 

Written by FStoopPosted in: Blog