What are the benefits?
Mass adoption of electronic invoicing within the EU leads to significant economic benefits and an increase in European business competitiveness. Supported by European legislation, acceptance of eInvoices by governments will make it easier to do business with the public sector.
The benefits from replacing paper invoices with eInvoices in two main steps.
First, replacing the physical paper form with a digital form allows the invoice to be handled and archived more efficiently. This provides significant savings in printing, postage, intra office routing and archiving. These benefits can be achieved with digital images of the invoice, such as pdf’s, as well as with eInvoices.
Secondly, making the data machine-readable removes the need for manually viewing and reading a visual form of the invoice and the manual work of entering its information into an AP system. This provides significant savings in human resources and significantly reduces errors in data entry. This cannot be achieved with digital images such as pdf’s
The adoption of eInvoicing in the public sector can make various contributions to economic well-being:
- it is supportive of public policy priorities such as public-sector deficit reduction, financial transparency and promotion of sustainable development.
- it will specifically make a material contribution to public sector cost reduction and efficiency.
- it will also provide benefits to private sector suppliers and create opportunities for the public sector to act as a catalyst for the wider adoption of digital processes in common with the private sector.
Benefits for public entities
The move from paper to (fully automated) eInvoices allows public entities buying goods or services to reduce business costs and contribute to the modernisation of domestic payment infrastructure. This is achieved by:
- quicker and cheaper processing, as information can be fed directly into payment and accounting systems and manual data entry can be eliminated.
- increased control over cash flow, which is critical to sustaining business operations.
- reduced material cost and a reduced environmental impact by removing delivery and print costs and by removing the need to archive paper, and to purchase envelopes, paper and stamps.
- greater transparency is built into the whole Procure to Pay (P2P) cycle. Having all eInvoice status information visible to the supplier reduces time spent on managing supplier inquiries.
- reduced data error by removing manual entry reduces time spend on balancing accounts and searching for discrepancies.
Benefits for suppliers
There are numerous benefits for suppliers that deliver goods or services to the public sector:
- reduced costs, as printing and mailing invoices is no longer necessary, saving costs in materials and time processing these invoices.
- on-time (and even early) payments, as with speedier invoice processing and approval cycles, suppliers get paid faster.
- improved ability to forecast: having access to real-time data around submitted invoice status, payment, and more adds a level of predictability and visibility to a supplier’s Accounts Receivable (AR) process.
Looking for help? Need more information?