Electronic Invoicing , Future of Transactions leading to cost saving and Improved Partner relationship.

Published on
26 Jun 2015
Final Author
Muazzam Bhatti

Electronic Invoicing is a growing from optional to a mandatory in many parts of the world. Latin America and EU are leaders while some Asian economies are catching up fast to avail benefits E-Invoicing. Major driving force behind adoption at government level is to increase tax net, bring transparency, cost reduction and time saving. Many countries in EU has declared E-Invoicing mandatory in B2G transaction while some other like Portugal is taking lead by expanding it to mandatory All B2B transactions.

One key indirect benefits of e-invoicing model is improved and more interactive relationship between buyer and seller. Seller has always been concerned about reducing working capital and gets paid as early as possible. Traditional paper based invoicing would bring inherent shipment, processing and approval delays. Situation would become worse if it needed a revision-Invoicing brings significantly reduces time to process an invoice at buyer end and increasing probability to get early for supplier.

Another issue is settlement of taxes. In any B2B or B2G transaction, there is always a third partner i.e. Government tax collection department. Integration with such a department in any form reduces hassle both at supplier as well buyer end however degree varies case to case and a lot depends on objectives of the a program.

One the buyer side, It is a big challenge to handle thousands of incoming invoices and keep manual tracking with ERP. Situation becomes worse for milestones base invoicing in long duration projects. Buyer needs to have broader view of each supplier and often have to query / update for individuals invoices. A streamlined , structured , holistic approach supported by E-Invoicing Framework helps to create a more trusted , interactive and productive relationship between supplier and buyer . Enhanced transparency leads to less disputes directly contributing to elevated trust level.