Governments allowing e-invoicing is not enough – they need to mandate it

Governments allowing e-invoicing is not enough – they need to mandate it

The global economic crisis is bad enough and forcing business to work with their hands tied behind their backs isn’t helping.

The failure of the dominant western economies, the US and Europe in particular, to encourage better business processes is testament to their lack of vision, their ignorance and their weakness. While their economies are crumbling, their governments’ paranoid insistence in archaic and bureaucratic  record keeping is allowing competing economies to take leaps ahead.

Western governments are an embarrassment to themselves. They’ll puff up their chests like cock budgerigars in a display of strength when there’s foreign policy votes up for grabs, yet when it comes to managing their domestic economies they run scared of business – especially the banks. And why are they scared of business? Because they don’t understand it. Why else, when the only way to heal our crippled economies is for business to thrive, do they insist on levels of bureaucracy  that can bring down the very businesses they rely on for a way out?

There are various estimates of the reduction in cost to business of transmitting invoice documents electronically and they all point to the same inescapable and blindingly obvious conclusion – electronic invoicing is much more efficient than paper invoicing. What that means is that the cost of doing business in an economy that embraces electronic invoicing is lower than in an economy that operates on paper. What’s more, tax collection is easier to manage which means greater tax receipts at a lower cost of administration.

I can hear the defensive response of governments: “It’s not the job of governments to interfere in business. We don’t stand in the way of companies utilizing electronic invoicing.”

Well I hate to point out the obvious but the hands off self-regulatory and deregulatory approach to business is exactly what created the laissez faire behavior of the financial services industry that led to the credit crunch. Giving a blessing to the use of e-invoicing isn’t good enough – it needs to be actively encouraged and countries that the US and Europe like to refer to as “developing” countries are teaching the “developed” world a lesson.

Mexico gets it. Brazil gets it. Argentina gets it. Russia gets it. They are truly embracing electronic invoicing. They’re not waiting for business to find ways around the regulations that were created when laws were drafted with a quill pen. They’re not just removing the obstacles they forcing business to do things better.

The job of governments is to govern and it’s high time that the governments of the US and Europe took a lead from these countries,  grew some balls and start to mandate business best practice.

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