Why e-invoice at all?
First we need to figure out if and why e-invoicing may be a potential “cash-cow” (for Banks?), “Money-saver” (for Corporates?) and “new-basic-electronic-demand” (for Consumers?).
Based on experience, a corporation can save about one to two percent of its sales per year by switching from traditional invoice processing to e-invoicing. One can exemplify it by separating some of the incoming and outgoing invoices, as issuer of invoices you can make a saving of about 3 SEK per invoice, as a rule of thumb. This will obviously depend on several factors, above all, volumes. This may not sound much but consider that a lot of companies send out, say from a few hundred thousand to several million invoices each year, it’s a pretty nice saving!
Regarding the receiving end, one can generally say that a corporate makes a saving of about 150 up to 500 SEK per invoice received, notwithstanding the actual amount of the invoice. Again, it of course depends on some factors, such as volumes, ERP systems etc. The point is that it reduces costs from the first invoice, whether sending or receiving.
Money in the shape of invoices, pending payments, finance charge etc. are hidden in processes where they are not optimally managed. No matter how good you are at sales, production and delivery processes, the financial process remains as the most sluggish of a company’s overall business processes. Multiply that by the number of customers, suppliers and business partners you have – and what you have is a BIG problem. This issue decrease cash flow and reduces the visibility and control. Again, e-invoice improves efficiency in processes, procedures and lead times.
Tieto serves as provider to roughly 80 percent of e-invoicing market in Sweden. In 2011, the usage of eInvoice has increased about 40 percent! This pace will probably pick up further or at least continue in coming years. Two customers whom Tieto work closely together with, are Swedbank and Nordea, which offers a so-called White Label solution, meaning that variations of Tieto’s e-invoicing solution is run by the banks as a cloud service where each bank then provides this service along with their other banking services, and resell it to their corporate customers. For banks, it is a strategic decision to offer e-invoice services to its customers, though this is a natural channel to the bank’s other core business services, including various financing and factoring services.
Finally, as a new generation of consumers placing even greater demands on electronic and mobile solutions for information and financial services, the increasing needs for cost reductions for companies, especially banks, will lead to a sharp increase in use of electronic financial services. Here we find the eInvoice service already far in the development curve combined with a great availability for both corporate and consumers.
This all sounds good – but wouldn’t it be nice to put some figures on this? Stay tuned to find out how much money that’s in this game!