Probably the first thing that comes to mind is getting rid of paper and the tedium associated with manual invoicing. This is true of course, but e-invoicing can be so much more than just saving time and resources.
What if we were to say that, for accounts receivable professionals, e-invoicing (or e-billing) can both significantly improve relationships with your customers, reduce customer churn and improve cashflow. Would you be surprised? E-invoicing has many hidden benefits, and it is these benefits that reach out far beyond the day-to-day working of a finance department that we are interested in for the purpose of this article.
Firstly, in terms of accounts receivables what exactly is e-invoicing? E-invoicing is an online service that automates the outbound invoicing process.
E-invoicing goes further than e-presentment, which simply presents an image of an invoice electronically with no customer interaction. E-invoices can be delivered in a variety of different methods to the customer, who can then process them online. Most e-invoicing solutions are outsourced to specialist vendors who run scalable services that are fully vat compliant and integrate easily with existing ERP systems, whilst at the same time enhancing what these legacy systems can provide.
The online process is simple; a supplier dispatches his invoices from an existing ERP or legacy system/s, which are then validated and turned into compliant documents by the e-invoicing vendor and securely sent to the customer in the most appropriate way given their profile e.g. EDI, custom data, or via email. The customer can then login to a secure self service website, or e-invoicing/e-billing Portal, which is a 24/7 supplier branded environment where customers can view, query and access additional data formats, investigate supporting documents, approve invoices, make electronic payments and review their account status.
Research by independent e-invoicing research company Billentis suggests that an organisation can achieve 1-2% of its turnover by replacing paper invoices and automating the processes. However, achieving more in the longer term is a very real possibility and entirely measurable. So, here are the 4 long-term “hidden” benefits of receivables e-invoicing that every FD should recognise.
According to Billentis, the full cost of processing a paper invoice including all the time consuming tasks such as query resolution and credit control, is at least €11.10 per invoice. A major contributor to this high cost is the lack of a central repository for all AR data. There is no way to quickly find out if an invoice has be received, queried or paid. Finance directors often find themselves in a position of making blind decisions with little information about the bigger picture. This doesn’t happen with e-invoicing. The customer e-invoicing Portal, can be accessed by authorised users from anywhere with Internet access 24/7. So whether you are in London or Sydney, at home or away on business, you can gain real-time access to the status of your account receivable documents, all in one place.
Using the portal you can search for an invoice, view it and see if it has been queried or paid. if it has been queried you can resolve issues quickly by using the online query management tool. Supporting documents can also be attached, such as statements, customs and duty notes, timesheets and delivery notes, which make query resolution even quicker. Workflow tools can also be put in place to ensure that notifications e.g. for queries, are emailed to the correct person, or system, so that they can be dealt with quickly and efficiently. Billentis states that the end-to-end e-invoicing process costs a mere €4.70 per invoice, which represents a massive saving of 57%.
No comments:
Post a Comment