02 Jun The State Treasury of Finland Leads the Way in E-Invoicing
Basware has announced the first e-invoicing agreement of its kind with the State Treasury of Finland. Under the agreement, companies that do not yet have e-invoicing capabilities, can send their invoices to the state in electronic format, free of charge. Using the Basware Supplier Portal, even the smallest suppliers can now easily shift to e-invoicing and start to benefit from optimized cash flow, better working capital management and lower processing costs.
Following a new requirement communicated by the Finnish state in early 2010 that state agencies and institutions receive only e-invoices from their suppliers, the State Treasury of Finland is now leading the way in e-invoicing adoption and uptake. The Finnish State agencies currently handle 13 million sales invoices and 1.9 million purchase invoices annually, and have more than 230,000 suppliers in their database. Prior to this initiative, a number of suppliers, especially those sending only a few invoices annually, had no access to tools for delivering e-invoices. However, through Basware’s Supplier Portal, the State Treasury of Finland has ensured that suppliers of all sizes can utilize e-invoicing in their commercial transactions with the government body subsidized by the treasury itself.
The State Treasury of Finland is not the only government agency driving the adoption of e-invoicing. In Europe, there are similar ongoing initiatives in Sweden and Denmark. In Mexico it is now mandatory to issue invoices electronically if the invoice sum is higher than 2,000 pesos, and, since January 1, 2011, businesses are required to perform regulatory compliance checks for senders’ and receivers’ invoices.
The benefits of e-invoicing are clear, according to a recent Billentis report: the State Treasury of Finland estimates that an incoming paper invoice costs €30-50 for the receiving company. Companies can reduce these costs to €10 by semi-automating the invoice process, and reduce further down to just €1 by fully automating the process – a significant level of savings when applied across all invoices the government sends and receives.1
In addition, there are significant time and environmental savings that can be achieved by switching to e-invoicing. A recent report from the Federation of Finnish Financial Services estimates that by switching from paper to electronic invoices, there is a 43% time savings per outgoing invoice and 50% for an incoming invoice. In addition, the report found that the carbon footprint for an outgoing e-invoice is less than half of that of an outgoing paper invoice. For incoming invoices, the carbon footprint savings are even more significant – on average, the carbon footprint for an incoming electronic invoice is less than one-fifth of that of a paper invoice.2
“Our aim is to promote e-invoicing and the benefits that both senders and receivers can gain, both fiscally and environmentally,” said Keijo Kettunen, head of Payment Transactions at the State Treasury of Finland. “The burden for e-invoicing isn’t solely on businesses – state agencies, such as ourselves, have a significant role to play in promoting and leading the way for e-invoicing, and making it as accessible and usable as possible for even the smallest of businesses.”
“The success or failure of any e-invoicing initiative depends on getting the suppliers on board, regardless of the size, location or industry. The State Treasury of Finland is a forerunner in e-invoicing in Europe for government-led initiatives, and is demonstrating the benefits that companies can reap through its implementation,” said Ilkka Sihvo, CEO, Basware. “The objective is to encourage other governments as well as private companies to take note and to drive further uptake. We at Basware are driving this adoption forward, both by requiring our own suppliers to shift to e-invoicing, as well as developing solutions for suppliers of all sizes.”