The Challenges of E-Invoicing

by | Sep 18, 2023 | E-invoicing

Updated on August, 21st 2023

When it comes to e-invoicing, the biggest challenge is not getting internal systems ready or removing any resistance among employees. No, the biggest challenge is making e-invoicing successful within your organization. For this, you have to depend on the cooperation of your suppliers, because e-invoicing facilities are practically meaningless if there is no e-invoicing flow going on.

Activate Suppliers

As long as suppliers are not asked to send e-invoices (in a certain standard), they often see no reason to do so. Sometimes, it is not clear to them what exactly you mean by an “e-invoice,” nor where and how they should submit the invoice. Hence, connecting (also known as onboarding) suppliers is key to the success of electronic invoicing.

Low-Threshold Solutions for E-Invoicing

The easiest solution would be to fully mandate the delivery of e-invoices in the desired format. This can be done by including it in the contract terms and general conditions. If a supplier does not comply with this, they simply do not get paid.

As a matter of fact, ViDA is going to change the way companies in Europe are operating. Indeed, B2B e-invoicing will become mandatory and organizations will have to go a step further into digitalization; the activation of supplier will then become something natural and less problematic.

We can already notice some changes in the way invoices are being exchanged, for most European countries, they have to go through e-invoicing if they want to deal with government agencies (B2G). Some countries like France and Italy are enforcing B2B e-invoicing to fight against tax fraud.

This means companies won’t have to deal with small lines in contracts: governments are going to rule e-invoicing formats!

Communication Plan

However, the ViDA project may seem far away, and e-invoicing is not always a top priority for organizations. Of course suppliers want to satisfy your desire as a customer to receive e-invoices, but they may not know where to start, or the advantages of e-invoicing over invoicing via PDF invoices are not entirely clear to them. Therefore, especially in this day and age, it’s helpful to mention that e-invoicing usually leads to faster payment, especially when combined with AP Automation solutions to ensure that the supplier’s e-invoice is paid immediately.

Guiding them through the transition process

It’s up to you to guide them through the transition process; this can only be done through frequent and clear communication. This is where things often go wrong. Practice shows that many organizations do not have the master data of their suppliers in order. E-mail addresses are missing or they still contain data from contacts who have been gone from the company for some time. Before the onboarding process can start, the supplier data must first be cleaned up and enriched.

Guiding the Interchange Process

Sending an email saying that your organization wants to receive e-invoices from now on is usually not enough. Try to use various means of communication, at different times. The most important suppliers and the suppliers who produce the highest volume in terms of invoices are best approached one-on-one. This takes time, but offers the best results. Preferably, online resources are used. This is fast and cheap, but if certain suppliers are not activated in this way, a physical letter is always an option.

Examples of resources that can be used to onboard suppliers:

  • Email
  • Landing Page with Information
  • Video
  • Newsletter
  • Brochures
  • Roadmap/Manual
  • One-on-One Contact
  • Letter

Is there no time or manpower to onboard suppliers or are the results lagging? Then choose to outsource the onboarding to an e-invoicing service provider such as SPS Commerce.

Interim Solution for Processing PDF Invoices

Roughly two-thirds of businesses send PDF invoices via email. However, a PDF invoice is not an e-invoice and cannot be processed securely and automatically without specific software. Yet many companies believe they are already “e-invoicing” because they send a PDF invoice by e-mail. This misunderstanding can make the supplier “immune” to your onboarding efforts. After all, they fail to see that they are not meeting your e-invoicing needs.

It is a waste of your e-invoicing solution if you continue to receive PDF invoices. Ideally, these PDF invoices should also be processed fully automatically and error-free in your system. There are more and more solutions on the market that can read PDF invoices without errors and convert them to an XML file. As a result, PDF invoices can also be processed automatically.

Conclusion

E-invoicing is going to be the new normal within the next few years. Starting off the earliest possible can only benefit your company and your business partners. It requires to be proactive but also be clear with what is and what is not a e-invoice. And once your organization will see the benefits of e-invoicing, there is only a small step to digitalize your supply chain!

Nathan Trouwloon
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