OK, we understand there are some potential upsides for both Banks and corporations. But how far have we come?
Let’s have a look on where we stand right now, is there a market or not for this?
The total estimated market value for the entire Financial Value Chain (Order-2-Cash, Purchase-2-Pay) in Europe is € 200 Billion annually and less than 10% of this is put into practice!
OK, so there is a market..! But what is actually done, by who and for whom?
Electronic invoicing on the EU agenda
The Digital Agenda is Europe’s strategy for a flourishing digital economy by 2020. The European Commission is focusing its efforts on removing barriers to the broad-scale adoption of electronic invoicing in Europe and the four key priorities on this topic are:
- Ensuring a consistent legal environment for E-invoicing
- Achieving mass market adoption by getting SMEs onboard
- Stimulating an environment that creates maximum reach between trading partners exchanging invoices
- Promoting a common E-invoicing standard
After establishing E-invoicing, the next automation steps soon follows:
- Replace traditional procedures along the procurement supply chain with electronic and automated processes
- Replace traditional procedures along the financial supply chain with electronic and automated processes
RTE – Real –Time Economy
- Full FVC
RTA – Real-Time Audit
- Enables Tax authorities to audit invoice before goods are shipped by suppliers
My humble conclusion on this; since the “market share” for e-invoice is still below 10% – no one is “too late” for this… Here in Sweden we – Tieto – provide white label e-invoice solutions for Banks allowing them and their corporate customers to send & receive in any channel (e or print) and with any-format-in, -any-format-out. I believe that the process starts with Order-to-Invoice-to-Payment, with a “straight-through-process” allowing for add-on services like supply chain finance; factoring and reversed factoring. Combining all these services (as Tieto does today) is absolutely something for the Banks to take part of as this is close to their core business – Payment, Loans and Funding. At least in Sweden, Banks play a huge role of converting the large SME segment into the “world of e” within the FVC – Financial Value Chain!
Having a meeting with one of the largest Banks in Sweden, discussing further development of their eInvoicing service; they clearly stated that the main reason for the Bank to develop and manage their own e-invoicing service, is that it’s so close to their core businesses; Payment, Loans & Funding, that’s it’s so essential for them to have “their own” service rather than acting as “consultants”. Hence, this service leads them straight to their own “core business products” (as mentioned above) with a smoother straight-through-process and a better margin.
I believe it’s essential for the Banks (like all other e-invoice VAN’s end vendors) to extend their roaming agreements leading towards a larger and smoother “market landscape” for all – not at least the end user/customers!
With a greater roaming network – we are all building the infrastructure and secure the possibility to increase the total market share of e-invoicing!
Ps. did you know that European Banking Association declares that 2 500 trees need to be cut down to deliver 1 000 000 paper invoices?