Electronic Invoicing

Germany is the biggest market within the biggest economic region in the world and thanks to the German's decision on e-invoicing, the cost of doing business in the EU has just started to drop. The news as reported by Christian Lanng is perfectly timed. It coincides with EXPP, the biggest e-invoicing conference in Europe, that kicks off next week and it comes at a time when the EU desperately needs a bit of good economic news. So why is this so important?

It was at the beginning of 2011 that we wrote about Tradeshift catching the wave just right. And it was just a few months before that I asked a couple of their competitors what they thought about Tradeshift. Ariba people and OB10 people were all singing from the same hymn sheet. "Trade who?". Well, a few weeks ago I asked them again and they both conceded, Tradeshift are becoming difficult to ignore.

One of the problems that the financial institutes have is that they don't want to get their hands dirty. Of course they recognise that e-invoicing is becoming a game changer but they've been reluctant to get too closely involved, preferring instead to sit on the sidelines and focus on the supply chain finance deals that are going to emerge as organisations and whole industries get smarter at the automation of their payables operations. This is a big mistake of course, the more the banks delay, the more ground that the supplier networks can gain and before you know it, they'll be adding clearing to their impressive range of service offerings. The e-invoicing tortoises may just steal a march on the banking hares.This is going to make the debate on e-invoicing chaired by Susie West such a draw at Sibos

There is a difficulty in building a business case for e-invoicing. The natural starting point is a traditional paper process and there is an irresistible temptation to begin to count the savings offered by the counting the cost of paper. A sheet of A4,  an envelope and a stamp. Well it's a starting point I suppose. And then there's the general efficiency saving because it's quicker and easier to deal with electronic invoices compared to paper. This is true of course but having 7 hours of work to do per day instead of 8 doesn't save anything. It just makes like easier. The fact is, if you approach electronic invoicing from the point of view of simply automating a paper process, then it won't save you a penny. So how do you go about building an effective business case for e-invoicing?

Kodak. “Who?” Exactly! When you can see the tide coming in you do something about it. The problem for some businesses is that they don’t recognize the tide. This happened to Kodak, the photographic print manufacturer. They produced – still do produce – photographic film and paper. They thought that digital photography wouldn’t take off. How wrong can you get it? OK, they have diversified and now embrace digital but they were slow and too late and Kodak is  now a shadow of its former self.