When Digital Invoicing Legislation Becomes a Source of Competitive Advantage
The popularity of electronic invoicing (e-invoicing) has increased massively over the past few years, with governments across the globe introducing new initiatives that enable businesses to take full advantage of this digital format. In fact, in some countries – including Brazil and Mexico – public sector invoices can only be submitted electronically. While the use of e-invoices are not yet mandatory in a majority of EU countries, in 2013, the EU passed laws giving them the same status as their paper equivalents.
E-Invoicing Increases Efficiency, Productivity and Reduces Costs
The push for e-invoice adoption is being driven due to their multiple benefits, including:
- Increased efficiency of business transactions – instead of being sent via post and requiring multiple occurrences of manual data re-entry, e-invoices are created automatically and sent digitally. Electronic signatures can also be added so documents can be approved without the need to print
- Increased productivity of the accounting teams – traditional invoices can be hard to track, particularly when sending across multiple channels. E-invoices provide notifications of where documents have been sent and whether they have been opened, meaning accounting teams no longer have to spend time sending follow-up messages asking if recipients have received them. E-invoices are also electronically archived, making retrieval effortless
- Reduction in costs – every stage of the invoicing process incurs a cost, whether it’s specific, such as postage, or a required overhead, such as wages. E-invoicing diminishes this total by removing the need for previously essential actions. In fact, the EU has said that it expects its e-invoicing initiative to save EU businesses €64.5 billion annually.
SMEs That Adopt E-invoicing Gain an Advantage over Those That Don’t
For small and medium-sized businesses (SMBs), the speed at which an invoice is settled has a big impact on the accounting sheet. With their often limited resources, stories of smaller firms struggling to survive due to late payments are a common occurrence, with large companies often abusing the greater resources available to them. In fact, in the UK alone, SMBs are owed €30.7 billion in overdue payments.
While there does need to be a culture change amongst larger firms, a big problem is that few SMBs have an efficient and reliable invoicing process in place. Relying on traditional manual processes when creating and distributing, they are elongating payment times before the invoice has even left the building.
As such, there is an opportunity for SMBs that get ahead of the curve and adopt e-invoicing now, before new regulations make them mandatory. Those that do immediately gain a competitive advantage over competitors that stick with traditional processes, as they get paid faster and simply have more time to devote to growing their organization.
For more information about how Neotouch can empower your invoicing process.
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