Today, we’re deligthed to welcome another guest post from Richard Manson from CloudTrade
 

Truth is truth, to the end of reckoning

I often hear the statement (usually from market space competitors) that PDF invoicing is not really electronic invoicing. Yet, in most cases this statement is simply not true.

Before we get in to the details, we first need to agree on what an e-invoice is.

What’s in a name? That which we call a rose (or an e-invoice). By any other name would smell as sweet.

Purchasing Insight logoThe widely accepted definition is that “an e-invoice should contain data from the supplier in a format that can be entered (integrated) into the buyer’s Account Payable (AP) system without requiring any data input from the buyer’s AP administrator” (http://www.einvoicingbasics.co.uk)

This makes sense. E-invoicing is all about removing paper and receiving electronic invoice data automatically into the buyer’s processing application. By doing so, operating costs are reduced, and transparency and controls are increased.

So if we accept this, then the next question is when is a PDF invoice an e-invoice? And, for that matter, when is it not?

To be, or not to be (an e-invoice), that is the question

Let’s look first at when it’s not. Simply put, it is not an e-invoice when a paper document has been scanned and the image – or photo – of the invoice is carried in the PDF. In this instance, the PDF is merely a ‘dumb’ image file. There is no physical invoice data carried in the PDF and it will require OCR technology to try to read the ‘photo’ of the invoice.

However, when a PDF is ‘machine generated’ i.e. produced directly from the application raising the invoice (which most are), in almost all cases it will be a text PDF, with the invoice data embedded directly within the PDF.

As machine generated text PDFs represent the majority of PDF invoices flying between organisations, the question then must be asked: what is the difference between a solution that maps an XML or EDI document, to a solution that maps invoice data carried in a PDF into “…a format that can be entered (integrated) into the buyer’s Account Payable (AP) system” (which is what CloudTrade do if you haven’t already guessed)

There isn’t any. So why do we still hear ‘pdf invoicing is not real e-invoicing’? Two main reasons:

  • Firstly, unless you are a bit of a geek (which I am), you may not realise there are different types of PDF or realise that the vast majority of PDF invoices are machine generated, with the raw invoice data available to use… if you just have the know-how.
  • Secondly, there is undoubtedly some scaremongering going on in the market.

CloudTrade has spent many years mastering what we do. We have a patent-pending, and we are enormously proud of the solution we offer. Conceptually it is straight forward to understand, but technically it is quite challenging – which is why we haven’t come across anyone that offers exactly what we offer.

At CloudTrade we’ve cracked the technical problem and are keen to apply it to business problems. The technology is accessible to large and small suppliers alike, and enables successful e-invoicing for organisations.

All the glitters is not gold

Traditional EDI/ XML mapping services and invoice portals – when you strip them back – are quite simple technologies. This is why there are so many service providers in the market.

However, asking a supplier to make changes to their applications and infrastructure to be able to send XML or EDI files; or asking a supplier to log on to a 3rd their invoice; simply moves the problem from one party to another. This is why adoption rates are so low, when only these two invoice submission options are available.

Such stuff as dreams are made on

E-invoicing should be free for suppliers, easy to use and non-disruptive – only then will suppliers move away from paper. Almost every accounting and billing application can generate a PDF. Suppliers don’t need to change applications, infrastructure or processes to move to PDF invoicing. This approach can deliver high adoption rates – typically more than 90% of suppliers, when asked, will email PDF invoices.

And when you can achieve these sorts of supplier adoption rates, a successful e-invoicing project is guaranteed!

Be not afraid of greatness

CloudTrade can be found on twitter @CloudeTradeNet