Voice of the Industry

E-invoicing: multiple approaches for top management to consider

Tuesday 1 September 2020 08:41 CET | Editor: Mirela Ciobanu | Voice of the industry

To adapt to the current situation and ride the tide of innovation, Bartłomiej Wójtowicz from Comarch, recommends business leaders to include e-invoicing digitisation into their organisational strategy

COVID-19 pandemic motivates a digitised approach

After a period of rising prosperity lasting a few years in various verticals, top management face the real challenge of updating business continuity plans and adjusting to a new business environment. Depending on the sector, some companies have opened new sales channels, retrained their staff for new duties, remodelled processes or switched to manufacturing new products. Ecommerce channel sales for instance, according to analysis by ACI Worldwide, increased by 19% in July 2020 compared to July 2019.

Invoicing coming to the attention of top management

One area of particular importance for chief financial officers (CFOs) and customer service/sales teams is the invoice management process. Despite the undoubted benefits of process automation in invoicing, statistics show an e-invoicing take-up rate of just 10% to 15% worldwide. This has remained stable for many years, with no rapid increase, which demonstrates a reluctance and slow decision-making processes where paperless and automated e-invoicing are concerned.

Various approaches to e-invoicing

Over the past decade, the e-invoicing expectations of many companies have differed significantly. In general, e-invoicing may concern:

  • Receipt, scanning, OCR, and conversion to structured files – this expectation mostly comes from companies which receive AP invoices from small or medium businesses with low technological maturity, and which are scattered worldwide. They are not in a position to force partners to use the structured format of invoices provided via a vendor portal or B2B integration.
  • Providing a supplier portal with onboarding capabilities – this is required by companies in a position that is strong enough that they may force vendors to use a portal. They expect wider digitisation of processes, partners’ master data management, self-provisioning tools, the possibility to exchange other document types (such as purchase orders, delivery protocols), or dynamic discounting capabilities.
  • Internal AP automation – besides the exchange of external e-invoices with partners, companies are also interested in the improvement of AP processes internally. This is mostly implemented by large companies, often with shared service centres, who expect a solution with advanced workflows for invoices coming from various channels for processing before integration with financial systems. Reporting features on spend management are also expected.
  • Client portal for AR invoices – as some companies have been forced to use e-invoicing by large clients, they want to move to 100% e-invoicing by extending the process to all clients. The expectation is to process invoices, debit/credit notes, and claim management functionality to enhance cashflow. In such projects, besides giving access to a portal, the additional distribution of invoices via e-mail is often expected.
  • B2G requirements – sending e-invoices in a particular format to public administration bodies has become obligatory in some countries in recent years. Companies often place highest priority on those countries, often shortly before the deadlines. They expect a solution that can provide communication with public administration bodies in many countries to work with one provider in the region. They also expect support from the legal perspective.
  • EDI approach with other message types implemented – there are companies which treat invoices as another document type in the digitised world. They often also exchange purchase orders, dispatch advices or receipt advices with their partners in order to cover the whole procure-to-pay/order-to-cash path. This approach is common in the retail, ecommerce, pharma, and logistics industries.

AI/ML to become a must for advanced companies

These are the companies interested in automating the e-invoicing process. For starters, AI/ML-based business technologies have been around for quite some time now, helping companies to automate supply chains and identify anomalies to prevent fraud. Generally, the idea behind AI-driven solutions is to provide access to structured and unstructured data which can then be analysed. In this way, it becomes possible to identify trends and patterns, and apply more sophisticated business rules to reach a higher level of intelligence, while also helping to improve performance significantly.

The potential areas of AI/ML use in e-invoicing, regardless of the approach, are:

  • Detecting anomalies and errors in invoice traffic bases by making comparisons with historical data;
  • Smart business rules -by using information from client’s internal system we can quickly check for duplicates, match invoices to their corresponding purchase orders (PO), assign documents to the right cost centre and, if they are non-PO invoices, assign them to a correct GL account;
  • Automatic data completion – the system can automatically fill out the missing blanks in a given invoice with information such as GL, CC, and tax codes;
  • Self-learning OCR engine to improve the rate of processed invoices.

Digitisation on the rise

We can observe that a significant majority of companies have already put e-invoicing digitisation in their strategy. However, this often concerns only part of the whole invoicing process in a company. To gain insight into a company’s holistic performance and to decrease human labour, I suggest a rethink of strategies so they cover all partners with an appropriate e-invoicing solution that utilises modern AI/ML technology. This should bring significant improvements in the process.

About Bartłomiej Wójtowicz

Bartłomiej Wójtowicz is Consulting Director at Comarch. He has over 15 years of experience in the field of B2B communication in the supply chain. Initially he was responsible for the market development in CEE, but later he became involved in product development in e-invoicing area. Currently Bartłomiej is coordinating the consulting team.

 

 

About Comarch

For the past 25 years, Comarch has been a global provider of advanced, software-defined technologies that help companies from all industries optimise their key business processes. The company’s vast portfolio includes systems and services for efficient data and document exchange such as Master Data Management, Electronic Data Interchange, Online Distribution, and e-Invoicing platform. Each of the products is fully compliant with the latest local regulations and allows enterprises to improve their business performance, gain a competitive advantage, and reduce operational costs. Comarch’s clients include top professionals from various sectors: retail (e.g, METRO-NOM, Tesco, Carrefour) FMCG (eg BIC, Johnson & Johnson, L’Oréal, Unilever), pharma (eg GlaxoSmithKline, Sanofi) and many more.


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Keywords: Comarch, e-invoicing, Data Management, Electronic Data Interchange, Online Distribution, e-Invoicing platform, Receipt, scanning, OCR, B2B, AP automation, Bartłomiej Wójtowicz
Categories: Banking & Fintech | E-invoicing, SCF & E-procurement
Countries: World
This article is part of category

Banking & Fintech