Efficiencies are Driving Moves to E-Invoicing
Published on 20 July 2023
Moves to digitize and automate invoicing processes, known as e-invoicing, are taking hold in North America. This level of digital transformation takes investment by participating businesses. E-invoicing also requires a reworking of business processes and coordination among many operations, tax, finance and IT teams. But the payoffs are great.
One of the key benefits of e-invoicing and AP (accounts payable) automation are the savings and efficiencies gained from eliminating many paper-based and manual invoice processing methods. The burden on financial and accounting staff is greatly reduced, resulting in significantly reduced labor and faster payment cycles. Among its many efficiencies, e-invoicing reduces error-prone data entry into an invoice management system, create endless emails or make calls to get approvals.
Automation that reduces labor and increases efficiencies are key reasons why average costs to process an invoice have fallen in recent years. Deloitte Access Economics estimates that replacing a paper invoice with an e-invoice can deliver up to $20 in savings to the business.
Estimates vary widely as to today’s average cost of processing an invoice from a few dollars to up to $40 per invoice and there are many variables such as type of industry and level of automation. One 2022 estimate based on research by the American Productivity and Quality Center found that U.S. businesses may spend under $2 to about $6 to process an invoice.
Compliance: increased e-invoicing reduces risk
Worldwide, more and more government authorities are mandating e-invoicing to enforce sales and tax reporting in support of government revenues. Many countries have announced their intentions to introduce mandatory e-invoicing involving B2B commerce as well as government and business transactions. A growing number of countries in the EU, Asia Pacific and Latin America are already requiring e-invoicing. In North America, e-invoicing initiatives are underway in Canada and Mexico.
Compliance to e-invoicing rules and regulations reduces a business’s risk of tax audits and financial penalties. With greater controls and visibility into invoicing, billing and payments, companies are less likely to fall prey to fraud. A robust e-invoice and AP automation solution will automatically reconcile payables with three-way matching and compare audit and fraud controls against company policy, greatly reducing or eliminating errors and fraud.
Faster payment cycles
E-invoicing and billing facilities faster approvals and accounts receivable collections, accelerating order-to-cash (O2C) cycles and improving cash flow. Also on the accounts receivable end, customers are less likely to lose invoices or pay late, and may want to take advantage of early-payment discounts.
E-billing provides a secure, transparent system of record, allowing for the integration of invoices with other company applications. Especially with today’s B2B EDI integration platforms[MJ2] , billing and invoicing systems are more easily integrated directly with ERP, accounting, payment and other enterprise systems.
Improved user experiences and greater collaboration
Another primary benefit of e-invoicing is improved customer service and supplier relationships. Customers receive correct and accurate invoices which fosters improved customer and supplier relationships. Integrated B2B and e-invoicing solutions can also dramatically reduce supplier onboarding deployment times.
But even small suppliers to businesses, such as brands that sell their products to retailers, can benefit by the retailer’s procure-to-pay (P2P) portal, without the need to implement their own robust e-invoicing systems.
In summary, the benefits of e-invoicing cannot be overlooked and outweigh the burden of implementation in most cases. E-invoicing and AP automation is proven to boost efficiencies, reduce costs and errors while streamlining the payment cycle. All of these benefits serve to reduce risk, bring greater controls to payments, and improve supplier and vendor relationships.
To find out more about the benefits of e-invoicing and AP automation, download our e-book.
Generix AP Automation and E-Invoice Services are part our suite of multienterprise-collaboration solutions which complement our EDI services. The Generix B2B EDI integration and EDI Services platform is used in more than 40 countries worldwide by many leading companies.
About Generix Group North America
At Generix Group North America, we provide a series of solutions within our Supply Chain Hub product suite to create efficiencies across your entire supply chain. Our solutions are in use around the world and our experience is second-to-none.
We invite you to contact us to learn more.
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