The Barriers vs. Benefits in Embracing E-Invoicing

At the end of 2010, the research company Paystream in the US conducted a survey on the barriers vs. benefits in embracing e-invoicing. This research was conducted in over 200 companies, mainly medium to large in scale and from a wide range of industries. Results confirmed that 20% of the survey population was already using a form of e-invoicing, with a further 48% actively evaluating adopting it in the near future.

The survey ultimately concludes that the benefits of embracing e-invoicing outweigh the barriers, for most organizations, but suggests that particular barriers will inhibit the time taken to adopt the technology or the time taken for it to become fully utilized. Let’s therefore look at these barriers and benefits in more detail:

Barriers
The survey found the greatest perceived barriers to adopting e-invoicing is current work processes or existing process design around issuing an invoice and getting paid (and the inability to change these processes quickly or effectively). Close behind is the lack of budget to develop or purchase new e-invoicing software, or pay any incremental, up-front costs, even if this led to significant medium to long-term savings. A lack of executive sponsorship is also cited as a commonplace barrier, with the CEO or CFO most commonly expected to be a major driver of adoption in most cases.

Other commonly cited barriers quoted from the survey were often having insufficient resources to bring in a new approach (mainly people) and the associated lack of time and resources to integrate e-invoicing with current systems or software (especially on the accounting side of things). In addition, lack of awareness about available forward options and possible supplier resistance were also cited as being significant factors.

Benefits
The survey found the greatest perceived benefits to adopting e-invoicing is its capacity to better control the whole billing process much more effectively (at every level and from invoice issue to ultimate payment). This includes the capacity to ensure that invoices were less frequently lost, missing or duplicated. The survey also found that e-invoicing was expected to reduce billing and payment processing costs significantly and also decreased cycle times. The capacity to also dramatically reduce errors and exceptions was also cited as a significant benefit.

Another major cited benefit is the capacity for e-invoicing to increase on-time payments (and even accelerate cash-flow) and to increase choice when it comes to invoice payment options and potentially when an invoice can be paid.

What does this mean to those organisations thinking about e-invoicing?
This research clearly suggests that any organisation interested in saving expenses and accelerating cash-flow would be wise to research the e-invoicing options available to them (of which there are several, including cloud-based and “pay-as-you-go” systems such as Payswyft which immediately solve other barriers such as lack of budget and resources and the need for integration time and effort). In addition, the CEO or CFO of an enterprise should ideally act as a project champion, helping his or her organization to evaluate specific options and how particular barriers need to be overcome. In taking these two steps alone, most organizations would smooth the path to embracing e-invoicing and be able to realize the substantial benefits much more quickly.