![]() ![]() The tedious paper-based invoicing process, from printing to postage, is completely avoided. Savings in time, shipping and personnel costs.So what are the specific benefits of using e-invoicing? With an efficient EDI system in place the cost to send and receive an invoice can be reduced by two thirds! These calculations consider FTE costs, opportunity costs of more value-adding activities, errors, delays and postage/fax fees (if relevant). Based on numerous reports from IBM, GS1, EY and others the average cost for a company to process a single document manually is roughly around £15. Predictably, the reduced steps also have a sizeable impact on cost. The diagram below shows the steps involved in the sending and receipt of different types of invoice: So how do these methods compare in real terms? In contrast to paper or PDF invoices, no manual steps need to be taken and the process can be fully automated.įurthermore, the sender (depending on the technical protocol used for invoice transmission) receives a corresponding confirmation as soon as the recipient has received the invoice. There the e-invoice is absorbed by the IT system without human intervention and is immediately available for further processing (e.g. EDIFACT or XML) and then sent directly to the recipient’s IT system. When an e-invoice is sent, the invoice is generated on the sender’s side in a machine-processable format ( e.g. Formats such as XML, CSV or EDIFACT are far more suitable for automated document exchange. However this is not the case as a PDF is not a structured, machine-processable document format, but is instead designed to be human-readable. Unfortunately many people mistakenly believe PDF invoicing comes under the banner of e-invoicing. The reason for this is the PDF format itself. Instead, the recipient is required to type it in manually or transfer it using copy & paste. In other words, the data cannot be transferred automatically from the PDF into the ERP/accounting system. However, the process is still problematic on the recipient’s side as they are still confronted with a media break, as with a paper invoice. Admittedly this represents a significant improvement compared to paper invoicing. when downloading the telecom bill.įor the sender of a PDF invoice, effort is reduced to the generation of the PDF (which is usually done automatically from the IT system) and the dispatch (which is also mostly done automatically). The latter option is mainly used in the B2C sector – e.g. ![]() Instead of sending paper invoices, PDF documents are sent by email or offered for download. This is due in part to the legal equivalence of the e-invoice with the paper invoice and the omission of the obligatory electronic signature. Over the past decade more and more companies have moved from paper invoicing to PDF invoicing. However, a confirmation of receipt by the recipient is only available with the classic paper invoice for an additional charge. Interestingly enough, many also trust the post office “blindly” when sending invoices, simply assuming that the invoice will reach the recipient (which in most cases it does of course). Anyone who has ever written several invoices will be able to understand how complex and non-scalable paper-based invoicing is! Rather, it is the manual processes of invoice creation, which are reflected in personnel and infrastructure costs, that make the paper-based process expensive. However, the costs incurred are not limited to those relating to postage. The sender prints out the invoice, puts it in an envelope, stamps it and then posts it. Yet as the diagram below shows, this method is not only consumption heavy, it also requires significant effort compared to the alternative (e-invoicing). Surprisingly, paper invoices still make up a large percentage of the invoices exchanged today. In this article we’ll explore these briefly in the context of the other commonly-used alternatives. On the other hand, however, e-invoicing brings many advantages to supply chain businesses. On the one hand, this shift naturally means a change in invoicing processes – something that some may view with trepidation. In recent years this has been accelerated by European legislation mandating the use of e-invoicing in B2G transactions (as explored in detail in our white paper on this topic) as a result of the benefits of e-invoicing becoming more well known. Electronic invoicing, usually referred to simply as e-invoicing, is becoming increasingly popular internationally in both the B2B and B2G sectors, gradually replacing the old-fashioned paper invoice and more recent PDF invoice. ![]()
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