Electronic Invoicing

I like and admire good sales people. I would even go so far as to say that I enjoy being sold to - when it's done well. Taking the time to understand me and my situation, my objectives, my likes and dislikes. Adding value to the purchasing process by overlaying technical expertise to help me refine my requirements. Being respectful of the competition and respectful of the constraints on my purchasing process that at times can make me appear to be a difficult buyer. This is what I like. I'm a sucker for a good, professional sales pitch. Which is why I was so disappointed recently to come across one of the worst sales pitches I have ever witnessed from a company - a software vendor in the P2P space - who really should have known better.

This week we are delighted to welcome Torsten Budesheim Director of Marketing at Taulia as a guest blogger. --- Recent surveys confirm that e-invoicing has finally reached the early majority of users in the technology adoption life-cycle. Paystream Advisors, in a late 2010 survey found that 40% of their survey participants had plans to adopt e-invoicing. This all looks very promising and should help Accounts Payable (AP) organizations around the globe increase operational efficiencies and at a minimum, realize savings from reduction of the time spent for data entry and exception handling.

It's some time since I heard anyone claim that a pdf invoice was an electronic invoice - but people used to. Fundamentally missing the point of "e-anything" it seemed, some organisations would claim to be embracing the 21st century by replacing paper with pdfs. Fantastic! Well it would be if they didn't print the soft copies in order to process them. This is not a joke. Even today, in 2011, I know of a bank - a global bank - that does just this. It's pathetic!

Readsoft and OB10 have announced a new global partnerships - aimed it seems at delivering the synergy that the two organisation can deliver around e-invoicing and AP automation. The press release states that the two companies have developed a "comprehensive, end-to-end business process solution that will integrate seamlessly with SAP, Oracle and other leading financial and ERP systems using the ReadSoft INVOICE COCKPIT Suite as a universal invoice hub to control all invoice processing irrespective of document format."

Research published earlier this year by Basware indicates that costs of e-invoicing to suppliers is one of the dominant reasons for poor adoption of electronic invoicing. A huge 46% of respondents to Basware’s survey said a combination of cost to suppliers and supplier reluctance was the biggest challenges to automation. This is hardly surprising, for years the big e-invoicing networks have loaded the implementation and running costs on the suppliers and it is now limiting further growth. It’s time to take another look at the charges for e-invoicing generally and how it is distributed between buyers and suppliers.

It doesn’t take a mathematical genius to understand the business case for some purchase to pay initiatives. Dynamic discounting - exchanging a discount in return for early payment - can give a return on capital of over 30%. Reverse factoring and other supply chain finance methods can substantially increase DPO and AP automation can reduce costs by 50%. But despite the compelling business case, most organisations remain firmly in the 20th century when it comes to purchase to pay optimisation. If the benefits are so great, why are more businesses not grasping the opportunity?