E-invoicing: The catalyst for financial supply chain efficiencies

The benefits of e-invoicing have been documented extensively by various organisations, ranging from the European Commission ‘Expert Group on E-Invoicing’ to independent research organisations. The focus of much of the research, however, is limited to the replacement of paper invoices with electronic documents. While paperless invoicing does drive near-term cost savings, there are often further benefits to be gained through more ambitious accounts payable (AP) automation projects. The introduction of electronic invoices into a financial supply chain can be a key enabler to other projects, such as evaluated receipts settlement, supply chain finance and category spend management, each of which can have even greater impacts on a company’s income statement or balance sheet. These broader AP automation projects, however, often require new approaches to financial supply chain management, such as reversing the flow of invoices from buyer to seller or eliminating invoices altogether. Corporations considering e-invoicing initiatives should think holistically about the financial supply chain benefits that can be achieved from related projects. Much can be learned from the experiences of large organisations in North America, Europe and Asia which are already implementing many of these approaches. This paper explores the potential benefits to corporations from the adoption of an e-invoicing programme as well as broader AP automation initiatives. The focus will be on business-to-business e-invoicing as opposed to business-to-consumer billing.