Basware: 53% of global businesses still rely on paper-based invoice processes

According to the “Global E-Invoicing Study” issued by Finnish e-procurement and e-invoicing software company Basware, 81 percent of invoices are scanned for invoice processing, yet only 26 percent of enterprises outsource the scanning of purchase invoices into electronic format, with the number as low as 11 percent among SMEs. This presents a large burden on any size business to complete the scan and capture of physical invoices as it requires internal resource to manually scan the information and input the data or files into the system; this delays the invoice process and hinders cash flow visibility. Additionally, the volume of paper printing is also relatively high with 69 percent of businesses printing invoices in-house. Those using more sophisticated systems (sending XML e-invoices, using point-to-point connections, third party web service or portal) are more likely to outsource printing services (30 percent); while only 8 percent of businesses do not print invoices.

The report has also found that PDFs account for 58 percent of electronic invoices and whilst this is a progression from paper invoices, it shows a large percentage of companies are still a long way from full automation. As heavy senders of PDF invoices are also heavy receivers, 79 percent of companies that send out invoices as PDFs receive email invoices in this format, compared to 50 percent of companies that use state billing and automation systems. However, businesses with sophisticated systems experienced a number of benefits beyond companies that rely on PDF-based paperless processes. Consequently, 56 percent of businesses with sophisticated systems experienced a reduction in the cost of invoice processing compared to their

Moreover, the study has found that, despite the continued reliance on rudimentary electronic documents and manual processes, there has been a reduction in the perceived barriers that prevent the adoption of e-invoicing automation in 2012 compared to 2011. Supplier resistance to e-invoicing adoption has significantly decreased from 46 percent in 2011 to 26 percent in 2012 as suppliers realize the benefits with 28 percent of businesses that use sophisticated invoicing systems finding it had a positive impact on the relationships with suppliers and customers. There has also been a steady increase in those businesses that use electronic invoicing to some degree in 2012 – 73 percent compared to 59 percent in 2011.

Furthermore, the report has found that businesses have an increasingly higher degree of awareness of the benefits of e-invoicing. The perception of the impact e-invoicing has on speeding up invoicing cycles has increased to 75 percent in 2012 from 72 percent in 2011. The reduction in invoice costs is seen as the second main benefit for 64 percent (a slight reduction from 71 percent in 2011).

The study has also shown that the rate of adoption for e-invoicing is consistent across businesses of any size. Small businesses with less than 100 employees, however, are more likely to see customer demand as a driver for the transition to e-invoicing – 61 percent compared to only 34 percent of businesses with 1000+ employees. However, despite this recognition of customer demand, a large number of SMEs currently do not have the ability to process e-invoices. Only 42 percent of SMEs have this ability compared to 70 percent of larger enterprises.

Finally, the report has revealed that e-invoicing adoption is being driven by an ecosystem effect as more businesses encounter partner, supplier and customer organizations benefitting from e-invoice use, including a reduction in invoice errors and processing costs. The network effect is also contributing to this whereby e-invoicing take-up is passed down the value chain from a large customer to a large supplier and consequently the suppliers that work with that business. These factors alongside legislative changes and e-invoicing mandates by governments, improvements in connectivity solutions and market awareness combine to not only increase the number of organisations adopting e-invoicing but also the volume of invoices processed. The tipping point of the e-invoicing ecosystem is expected to be around 2014-2015 when the majority of companies will have moved to sophisticated e-invoicing.