E-invoicing inflexion point on the horizon

We have participated in a number of audits and e-audits of clients and can report a recurring theme. Audits of paper invoices take a very long time and cost a lot of money. Audits of digitally signed electronic invoices take a matter of hours. The auditor can see in one place that the invoice is compliant (or not) because all evidence is immediately available.

It only needed a few tweaks to some directives, influenced by the respective beneficiaries, and this situation changed fundamentally. What was a structured and organised process – clearly described in national laws for everyone to read and understand – has become a nightmare. Suppliers believe they can send PDFs directly to their buyer, which causes the buyer to ask how they transfer this into their ERP software, and how they prove authenticity and integrity.

Without a service provider facilitating the data transfer and the signing of the invoice, the buyer is left answering these questions only by investing money and time going back through business controls to prove the invoice’s origin.

It might not be such a big problem if you are receiving a couple of hundred invoices a year, but it becomes a massive problem if you are a multinational with hundreds of thousands of invoices.

At this point you have a choice. Deploying a service provider to ensure many controls are happening upstream is probably the way to go if you are a large receiver of invoices.

We agree that take up has been slow, but let’s be honest, neither the company-driven projects, where large receivers tried to do it themselves, nor the “free” solutions advertised by some providers, have done the trick. The reason is simple. All of the controls needed to satisfy the auditors are expensive and complex, yesterday on paper and today in the electronic world. e-Invoicing didn’t change that but it does offer a chance to do it in a slicker and less expensive way.

With service providers like Tungsten Network growing up, offering more complete solutions, the compelling event is clearly there.

But the take up of e-Invoicing is not going to be driven by free or simplified solutions. It will be driven by well structured and organised processes offered to the trading parties by service providers who understand business processes.

We have a feeling we are all in for some good news soon. And if the politicians in Europe really want to help the adoption of e-Invoicing, they should mandate it and follow the examples of Mexico or Brazil who have implemented closed systems which are service provider supported, where tax collections increase and fraud is fought on all fronts.