Electronic Invoicing

The Department of Veterans Affairs Financial Services Center (VAFSC) in the US has just become the latest government entity to mandate the use of electronic invoicing supporting the Improper Payment Elimination and Recovery Improvement Act signed by President Obama in January this year. Analysts and observers interested in e-invoicing have for some time been taking a close interest in developments in Latin America. Despite being relatively late into e-invoicing, the adoption rates in Mexico and Brazil are extremely high because governments have mandated its use. They’re mandating e-invoices because it allows the authorities more effectively to control and manage the collection of taxes.

Small business can be forgiven. When you start a business you want to get it right and there isn't always the time to understand why you do all things you do. You need a website. Why? Because you do. And a twitter account and a Facebook page.  And you need an office and a store with a shop window display and an accountant and letter-headed paper and business cards. Still don't quite know why but better safe than sorry. Big business should know better but despite having years of experience, industry expertise, resource and time to deliberate on what really makes sense for their business, many continue pointless practices and, in many cases, they don't even know why they do them. These are my top 4 pointless business practices

New York - the lights, the excitement, the glamor, the Post Office. A compelling argument for electronic invoicing. [caption id="attachment_7294" align="aligncenter" width="540"]This Post Office in the heart of Manhattan is open for business This Post Office in the heart of Manhattan - one of the busiest and commercially vibrant cities in the world - is open for business. I stood in line for 45 minutes to buy a stamp.[/caption]

In the fast moving space that is e-invoicing, like many other areas of business, the impressive announcements of vendors can become tiresome. Claiming customers that everyone claims - promises of new approaches and ludicrous claims about the use of bleeding edge technology that turn out to be no more than smoke and mirrors. Tradeshift's announcement of a partnership with Intuit was genuinely impressive but it's not till you hear the other side of the story - the Intuit version of events - that you get to see what the true significance is.

This is an important piece of research. For the first time, independent evidence points to a rapid growth in the adoption of e-invoicing and a significant change in the motivation for implementation. A wide range of organizations, from SMEs to large global businesses were surveyed in 2012 to understand their experiences and aspirations for payment technologies. Some of the results of the research  are, to be frank, predictable, while others were a surprise. Overall, the research paints an optimistic picture for technology vendors and their clients who are benefiting from their solutions.

I often recall the image of the Dickensian bookkeeper when I look at an AP department. In the 19th century, ledgers were hand written with quill and ink, sometimes in triplicate, which meant doing the same things, literally, again and again. Today, we still have pieces of paper to record the details of a business transaction. In an age when we can trade coffee, oil and pork bellies in the blink of an eye - in an age when even pre-school kids are computer literate - what place is there for paper?

One of the difficulties that analysts have is moderating their tendency, out of enthusiasm, to exaggerate the claims that vendors make. They want to report exciting things, things that people want to read. It’s all the more difficult because we all know that the vendors use marketing license in spades when they brief analysts. But the implications of the news announced today are difficult to exaggerate. Tradeshift have got a new investor. Intuit, the engine behind QuickBooks, the people that support 5 million small and mediums sized businesses in the USA, have partnered with Tradeshift. What does this mean? It means that Tradeshift’s network is now the biggest in the world.