Author: Pete Loughlin

Everyone agrees it seems. The case for implementing inbound e-invoicing is compelling. It is a simple matter of common sense. Replacing an inefficient paper process with an automated electronic process will generate savings and in the current economic environment, who would argue that it was not a good idea? It isn’t even that technically complex. What could possible go wrong?

The problem with public sector finance is they have it too easy. The challenges that face businesses in the real world don’t affect public sector. Apart from the annual scramble to spend money in order to secure next years budget, issues like cash flow management just don’t exist in the same sense that it exists in the private sector. And this is why it is so disappointing to see government bodies playing the late payment game. Why do they pay late? They don’t have a good reason to.

hmvpa_468x374Karl Meinke, professor at the Royal Institute of Technology in Stockholm once said - "Computers allow us to shrink the world. Before we know it, we'll all be living in matchboxes". I paraphrase slightly. He won't remember that he said it.  It was it circa 1975 when he was 13. I remember it was very funny at the time but remarkably, there's a ring of reality in what he said. The world we occupy today is unthinkably different to the world that existed then and while we don't live in matchboxes in a literal sense, who would have thought that the shops we used to frequent would have shrunk to the size of a letter box?

Like many readers, I have met many suppliers who struggle to manage cash flow. And I’ve met companies that rely on third party finance solutions to fill the gap. They all have one thing in common – they are not happy people. I would challenge you to produce a photograph of an AR team with smiles on their face – without using Photoshop!

We often use Latin America as an exemplar. I’ve used it as such but I have to say, I shouldn’t. “Europe should follow the lead of Latin America and mandate e-invoicing”. This is really the shorthand version. The long hand version is much more complex and it’s worth taking a little time to understand why Latin America is so different from Europe and North America so that we don’t just learn lessons, we learn the right lessons.