Now that we know what the prerequisites for an e-Invoice enabled business are, and we’re one step closer to understanding if e-Invoicing is right for your business, we need to make sure we understand the benefits and that we can maintain an environment where e-Invoicing keeps on delivering on the business case.
In part 2 of our e-Invoicing blog series we want to deep-dive into the benefits of using this e-technology.
E-invoicing enables companies to automate their invoice processing. This automation generates benefits not only for the company itself, which is the buyer, but also for its suppliers and other internal managers from different parts within the business.
Let’s have a look at some of the most impactful benefits:
Manually entering data from a paper invoice into a payment system is time consuming and very much prone to human error. Efficient e-Invoicing software can process four times as many invoices per person. This can mean cost savings of thousands of pounds for larger to mid-size organisations and can free up staff time to focus on other important areas such as working capital management.
Most suppliers complain about not having visibility over the status of their invoices, and not knowing when to expect the payment. With traditional paper-based invoices, updates on the status of the invoice are usually received by phone.
With e-Invoicing software, once you submit the invoice your suppliers can track it and will know when they can expect to be paid. Also, invoice processing time will be vastly reduced and the buying organisation will have more control over the payment. In exchange, this can improve relationships with your suppliers as invoices will be paid faster and communication will become smoother.
As a result of the above, buyer companies can expect early payment discounts from the accelerated payment cycle provided by e-invoicing. These are still great times to benefit from e-Invoicing. It is not in early stages, but many companies still fear it and believe they are not technologically advanced enough to embrace it. Because suppliers have to deal with both types of buyers they often reward the buyers who pay them faster.
In exchange these early payment discount opportunities can benefit the business, enabling it to generate savings that can be significantly more than any other e-invoicing measure. Some organisations know how to take advantage of these savings where it suits the working capital strategy of the business most.
Companies are under constant pressure to reduce costs. Procurement teams are always looking for areas where cost savings can be obtained, and waste can be reduced. Good spend management programs sustained by spend management software can help identify these areas by aggregating data from purchasing, contracts and AP systems into a data warehouse that can be analysed for cost saving opportunities.
As we’ve highlighted in part 1 of this blog series, paper invoices consume vast resources and create a great deal of waste: from wood and energy, up to increased carbon dioxide emissions.
Paper invoicing also creates problems related to storage costs. Invoices need to be kept for a number of years and for big companies this can be a real hassle. With e-Invoices storage space is minimum, as invoices are stored either in the cloud or servers.
We are now more and more aware of the impact human life has on the planet, and companies that help reduce this impact will benefit from an improved and “environmentally friendly” image.
However beneficial e-Invoicing is, companies need to make sure they are ready to embrace the new technology and need to create an appropriate environment before they do. Whether we’re talking about preparing their internal and external stakeholders for the change or simply making sure it is sustainable for the business in terms of processes and costs.
Have a chat with our procurement experts and see if you’re ready to take on e-Invoicing. If you’re already using it we can help you make the most out of your e-Invoicing solution and guide you through the KPIs that ensure the maximum benefits.
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