The Future of e-Invoicing
The future of e-invoicing, or electronic invoicing, is very bright indeed. Growing at almost 20% year-on-year globally, e-invoicing is unlocking competitive advantage for those who embrace it now, and looks set to offer even more value as it matures over the coming years.
At Corcentric, we are in a privileged position of having delivered e-invoicing solutions to leading global brands for over a decade. As the e-invoicing market evolves, we adapt to the trends – staying one step ahead. In order to do this, we understand not only what businesses need from e-invoicing now, but next year and as far beyond this as possible too.
While few of these points will heavily influence the shape of e-invoicing in 2017, we expect them to become increasingly important over the next 5 to 10 years.
The future of PDFs in e-Invoicing
Competitive pressures will make swifter invoice processing and analytics rise-up the business agenda. PDF-format invoices do not present the optimal solution to this need. Businesses will switch to more streamlined, structured data, invoicing formats.
Greater emphasis will be placed on machine-to-machine (e.g. EDI) invoicing processes, reducing the need for unstructured, human-readable, formats like PDF. Initially, this may well manifest as dual format invoicing standards (Germany already has this with their ZUGFeRD format), but the progression towards machine-to-machine invoicing is inevitable.
Data’s role in the future of e-Invoicing
As businesses transition invoicing formats away from PDF, to structured data, this simplifies analytical challenges and facilitates better business insight. Customer behavior insights, predictive analytics and opportunities for improved cashflow all arise from improvements in invoicing data handling and analytics.
Invoices hold some of the most valuable financial insights for any company. Aggregating and analyzing vast volumes of invoicing data, as well as responding to real-time invoicing data, will present competitive advantage to businesses who can act on this quickly.
Invoicing in the Real-Time Economy (RTE)
e-invoicing is an integral, and often driving, component of the financial structures required for the real-time economy. The RTE presents benefits to business cashflow, through reduction of latency between, and within, financial processes.
Businesses that embrace digitization of financial processes, such as AR automation and electronic invoicing, can expect a reduction in capital occupancy costs by occupying assets, resulting in a more efficient, agile and productive business.
e-Invoicing diversification leads to platform and format agnosticism
When considering the future of e-invoicing, businesses face an ever-increasing diversity of electronic invoicing platforms and VARs (Value Added Resellers) as well as all the associated standards, communication channels and formatting requirements. It is already hard to evaluate e-invoicing solutions without determining first what your most important customers and suppliers use, and whether a particular solution would limit who you can do business with easily.
Platform-agnostic and highly interoperative solutions, such as Corcentric, will become an essential tool in allowing businesses to freely connect to customers and supply chain without the overheads of manually translating invoices.
Much of the onus for compatibility with e-payment systems is pushed on to the accounts receivable teams at present. Many face a challenge of entering invoices into accounts payable systems manually, or via complex electronic connectors.
Top-down pressures shaping the future of e-invoicing
Governments across the globe present one of the main forces driving the adoption of e-invoicing. Their primary motivations are to improve public-sector efficiency and plug holes in tax revenues. The impact of this drives connected businesses to adapt or lose out. This has been seen clearly in Estonia and parts of South America, and will start to shape the e-invoicing landscape in Europe as EU Directive 2014/55/EU comes into force.
A similar effect will be felt as increasing numbers of large corporates demand e-invoicing from suppliers to improve transaction efficiency. This creates a cascading adoption of e-invoicing from the top down as suppliers seek to become easier to do business with.
In the age of SaaS and cloud-provisioned services, businesses expect better agility, availability and scalability from every aspect of their infrastructure. E-invoicing solutions that can scale, adapt and support businesses in this way, as well as price accordingly (switching e-invoicing investment to become an OpEx, rather than a CapEx) will win favor over those who are less modern in their approach.
Why should a business need to invest thousands in the development of an e-invoicing solution, when an as-a-Service, outsourced, provider can plug into existing infrastructure quickly and present a broad variety of connectors to interface with any possible customer or supplier e-payment system?
e-invoicing is set to evolve significantly over the coming decade. Businesses who are investing heavily in e-invoicing now, need to think carefully about how well their proposed solutions will work in the context of all the points raised above.
Flexibility and freedom are two of the highest common factors to consider across all of these points. No business wants to become trapped, limited or hampered by their choice of e-invoicing solution. So selecting an e-invoicing partner that can offer flexibility, scalability and ideally an as-a-Service model, is the smartest way to prepare for the future of e-invoicing.