The impact of the pandemic on the billing process
Published on 14 June 2021
Among the administrative tasks disrupted by the health situation, invoicing represented a particular challenge. With the social distancing imposed, the closure of sites and the more or less systematic use of telecommuting, processing this mass of paper invoices proved to be very delicate. Let's take a look at it.
During the pandemic, companies had to face many challenges: supply chain activity was severely disrupted, supplier risks increased, force majeure was invoked as a reason for not being able to execute contracts, etc. At the heart of the storm, the 2 billion invoices issued between companies, of which more than 70% were paper-based, had to be processed in a remote working environment. Cumulative issues encouraging the dematerialization of the invoicing process, the way out for many organizations.
Paper invoices difficult to process during containment
The National Electronic Invoice Forum (FNFE) conducted a survey in the summer of 20201 to estimate - among a wide range of companies, from large industrial groups (more than 5,000 employees) to microenterprises - the effects of the first containment on paper invoice processing.
Many companies reported difficulties in processing invoices received from their suppliers in this format. These difficulties were more significant for large companies (62% admitted to having experienced difficulties) than for SMEs (42%). For invoices issued ("customer" invoices), the trend is similar, although the respondents consider the difficulties encountered to be slightly less significant.
But it was not only the processing of invoices that was disrupted during the lockdown. Before paper invoices can be processed, they must be in hand. Teleworking, the deployment of lay-offs (partial and technical), but also the reduction of postal services had a direct influence on the increase of the sending and receiving times of paper invoices.
Companies that use an electronic format have been less affected by the economic situation. In fact, a large proportion of the companies surveyed by the FNFE reported that electronic invoices were very easy to process. 47% of respondents had no difficulty processing them when they were destined for customers, a figure that rises to 60% for supplier invoices.
Significant delays in payment
For the first time in 15 years, payment delays have increased in France as a result of the crisis, rising by 3 days between the first and third quarters of 20202.
These delays have an impact on both suppliers, who collect late, and customers, who pay late. Failure to meet deadlines and regulatory obligations can have significant consequences. In addition to late payment penalties, these delays can damage the trust relationship between the company and its suppliers, strain suppliers' finances and even jeopardize the supply chain.
In France, late payment is the leading cause of bankruptcy. The French Ministry of the Economy estimates that they cause 15,0003 bankruptcies per year, which represents nearly a quarter of all business failures4 . SMEs and microenterprises are particularly sensitive to late payments, which cost their cash flow up to 19 billion euros per year5.
In order to avoid cash flow defaults in this period of crisis, France has set up an exceptional scheme, the State Guaranteed Loan (SGL). It allows companies to access liquidity quickly and at a very low rate. 630,000 companies - 89% of which are microenterprises - had benefited from this scheme by the end of 2020, for a total amount borrowed of around 130 billion euros6.
The dematerialized invoice more and more popular
To make the payment process smoother and faster, more and more companies are requesting that invoices be sent to them electronically, especially in PDF format. The FNFE notes that there has been "a real awareness of the benefits of electronic invoicing after experiencing long-lasting confinement and teleworking". Perfect timing, since the use of electronic invoicing will soon become an obligation. Article 153 of the 2020 Finance Law requires the progressive implementation of electronic invoicing for all transactions between companies subject to VAT between 2023 and 20257.
Unfortunately, a recent8 survey indicates that not only are half of companies uninformed about the issue, but of those that are, 4 out of 10 believe they will not be ready by January 1, 2030.
Among the main difficulties identified by the FNFE9 survey are the constraints of regulatory compliance, the reluctance of customers/suppliers to make the switch, interoperability between service providers or the multiplicity of invoice formats…
The deployment of solidarity-based digital solutions
Faced with the covid-19, the French government called for national solidarity, inviting companies that could to mobilize to support the French economy. Generix Group has answered the call by making its tax-compliant invoice dematerialization service available free of charge in 2020.
This offer included a dedicated environment on the Generix Invoice Services portal (administration, monitoring, dashboards, etc.), several methods of issuing invoices depending on the recipients (sending by e-mail, making them available on the portal, etc.) and the creation of tax originals with a 2-star RGS signature and archiving with probative value.
Electronic invoicing, which is booming, is still marginal today. Tomorrow, it will be the rule. Its advantages over paper invoices - highlighted by the health crisis - are legion.