E-invoicing has been present for almost 30 years, and over the last decade more and more companies have incorporated this technology into their financial ecosystems. Due to the increased adoption of e-invoicing, and the fact that the invoice is one of the most important documents when it comes to VAT declarations and commercial transactions, software providers have invested heavily in the research and development to either enhance the e-invoicing process or develop new business models. In this article I will explain more about robotic process automation, blockchain and supply chain finance, three trending topics in e-invoicing.
How does robotic process automation affect accounts payable?
Robotic process automation (RPA) is fairly well-known, and has been implemented for some processes at many companies. This emerging method of business process automation goes hand in hand with machine learning and artificial intelligence, and is a technology that can affect multiple departments within a company.
Despite being a relatively new, RPA has already seen high levels of adoption in accounts payable departments. However, the key to achieving significant cost savings in AP will be e-invoicing. Among its many benefits RPA facilitates shorter invoice cycles and simplified approval processes, while eliminating delays in payments.
As an e-invoice consists of structured data, there will be a lot of tasks that a robot can take over during the verification and approval of an invoice. We can already see that the robotic verification process has been adopted by countries that have incorporated the clearance model in their tax infrastructure (among them, Mexico and Italy). In this way they can automatically collect the necessary tax information and approve the invoices.
When it comes to the AP department of a company, the added value of robotic processing automation lies in the verification and booking of the invoice. For example, when a PO number is not included on a supplier’s invoice, the document can be automatically declined and returned. With RPA, the cost center and general ledgers can be assigned automatically to a specific invoice. It is worth noting that e-invoicing service providers offer managed services such as data validation, calculations and verification of master data, which may be used to automate the process.
Will blockchain revolutionize e-invoicing?
Interest in blockchain, the technology underlying cryptocurrency, has risen significantly. Now, almost all departments in many companies are researching this technology to see if they can find a way to implement it. For accounting departments, this involves the processing of invoices.
When it comes to blockchain and e-invoicing there are already some use cases worth noting. For example, Shenzhen’s Metro System deployed its blockchain e-invoicing system last March. With this system, users can automatically receive invoices through WeChat, at the end of a trip. The public transport system processes around 170 000 invoices per day, which will lead to a saving of CNY 400 000 (approximately EUR 50 000) per year.
As well as bringing cost savings, blockchain, combined with e-invoicing, will also be an important factor in the traceability of the source and authenticity of invoices. This will facilitate improvements in fraud control, and give transparency around issues such as money laundering.
However, before companies can explore the full potential of blockchain and e-invoicing, the adoption of e-invoicing has to increase exponentially across the board.
What is the current position of supply chain financing?
Supply chain financing and e-invoicing have been closely linked for several years. The main driver behind this have been secure communication protocols and the validation and verification of e-invoices.
The clearance model has also impacted the adoption of supply chain financing. For example, when you send an invoice in Mexico, you’ll also get a verification that it’s going to be paid, and when. With this information it’s easier to apply for some form of credit at banks and factoring companies.
The next step in supply chain financing and e-invoicing will, in my opinion, be blockchain. As mentioned, blockchain is an important factor when it comes to the traceability and the authenticity of invoices. As it’s an open and transparent network, information about your company’s transactions can easily be verified by banks and factoring companies.
Robotic process automation, blockchain and supply chain financing are all of significant interest in terms of e-invoicing. RPA and supply chain financing currently lead, as they are a little more mature then blockchain.
In my opinion, enabling a faster and more secure method of supply chain financing will have more impact on SMEs, as they don’t have the same cash flow as large corporations. RPA and blockchain will be of more significance for larger companies, as they do have the budget to invest in these technologies and the business case is justifiable if you have 50 000-plus invoices to automate instead of 4 000.
Furthermore, as supply chain financing and RPA are becoming increasingly popular within medium-sized and large enterprises, I expect that we will see more innovations in the coming year or two. With blockchain, I would expect to see real business value for companies being realized in the coming five to 10 years.
For more details, see the Comarch e-invoicing website.
About the author
Nick has been working in e-invoicing for over five years. At Comarch, he is responsible for servicing the Benelux market. Within his role as e-invoicing consultant, he is focused on advising large organizations about automating their financial processes.