The benefits of electronic invoicing during a pandemic
Published on 10 June 2021
The 2020 Finance Law calls for the dematerialization of all B2B invoices by 2023-2025. Some companies have already taken the plunge, digitizing - partially or fully - their invoicing processes ahead of the legal obligation. Focus on these numerous benefits, particularly essential in this period of health crisis.
Many companies have opted for dematerialization. This initiative paid off during the pandemic, as they were able to continue to manage their invoicing without suffering from travel restrictions, the distance imposed by the reduced activity of the postal services. They were also able to measure the benefits of this process change. Explanations.
Substantial savings
At a time when many companies are looking to save money to offset the decline in their business, electronic invoicing appears to be an important lever for reducing costs.
According to a study conducted by Ernst & Young, the cost of processing a paper invoice in France is around €15. Issuing a paper invoice costs €7. In comparison, electronic invoices are very economical, since their processing cost can be as low as 0.30 €.
If costs are drastically reduced, it's because electronic invoicing saves money at many stages of the billing process. First of all, it is not necessary to print the electronic invoice. This saves paper and ink cartridges. Also, since the electronic invoice is not sent by post - it can either be sent by email, made available on a platform, transmitted by EDI (Electronic Data Interchange)... - stamps and envelopes are no longer necessary. There is also no need to manually sort mail and to physically archive invoices.
Electronic invoicing further reduces costs by minimizing - or even eliminating in the case of EDI - human intervention in time-consuming operations such as checking invoices or entering data into the ERP.
Save time and reduce payment delays
Another essential advantage of electronic invoicing is the speed of transmission and processing, which is far superior to that of paper invoices. The Ernst & Young study mentioned above indicates that a person processing an average of 6,000 paper invoices per year could, at the same time, process 90,000 electronic invoices, i.e. 15 times more!
Moreover, 50% of the companies surveyed in Generix Group's 2020 barometer observe positive impacts on the reduction of the reconciliation and payment cycle.
This time saving is essential for companies in these times of crisis. Not only does it allow purchasing and accounting departments to focus on higher value-added tasks, but it also enables them to allocate financial resources previously allocated to managing payment deadlines to key positions for the company's growth (R&D, business development, etc.).
Reducing payment times is also a key issue for SMEs, nearly 15,000 of which close their doors each year due to a lack of cash, not a lack of orders! Late payments are the source of most of the problems; they represent 19 billion euros of missing cash for French SMEs.
Electronic invoicing is therefore a way to support SMEs. The Australian government has understood this: to encourage SMEs to switch to standardized electronic invoicing, Australia has committed to paying this type of invoice within a maximum of 5 days from January 1, 2020.
Your Italian neighbors have jumped on the e-invoicing bandwagon since 2018!
More productivity and reliability
With electronic invoicing, the invoicing process is more reliable. By eliminating a number of steps previously performed manually (scanning incoming invoices or manually entering data into the system, correcting errors, etc.), potential sources of error disappear.
With standardized electronic invoicing, invoice data is automatically extracted from the supplier's accounting software and shared from system to system. Each actor in the billing chain is thus assured of the quality and completeness of the data exchanged.
In addition, data is accessible in real time by all stakeholders, enabling efficient online collaboration and strengthening the trusting relationship between companies and their suppliers. It is also easier to track the processing of invoices and thus limit late payments, which are harmful for small businesses.
Secure and traceable exchanges
By enabling the exchange of billing data between the supplier's and customer's financial systems, electronic billing provides a much more secure space than sending invoices by post or email.
Electronic invoices are sent via a dedicated network, only between identified partners, according to pre-established standards. Approval and verification rules, as well as security measures such as encryption at rest and in transit, are put in place. The risks of error and fraud are reduced.
Companies that deploy these solutions see the benefits on a daily basis: 64% of them observe positive impacts on the traceability and reliability of the invoicing process, according to the Generix Group 2020 barometer.
Significant savings, reduction of payment times and processing errors, time savings and productivity... The advantages of dematerializing invoices are numerous, and can be decisive in these times of COVID. It is therefore in the best interest of companies to start dematerializing their invoicing processes before the legal obligation, which is set for January 1, 2023 for large companies, the following year for SMEs and 2025 for small and medium-sized companies.
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Generix Group's Invoice Services
1 Relayed by actuel-expert-comptable.fr (link in french)
2 Communication of financial documents in a standardized electronic format, and only between computers connected via a dedicated network.
3 Relayed by bfmtv.com (link in french)
4 Relayed by ato.gov.au (link in french)
