Louis Rossi, director of business development with Comarch, explains why U.S. companies have been slower than those of other countries to adopt electronic invoicing — and how they stand to benefit by getting onboard with the technology.
U.S. companies lag those based in other countries, especially in Europe, when it comes to embracing electronic invoicing. One reason is Europe’s adoption of a formatted structure for exchanging invoices, in the form of an electronic data interchange (EDI) protocol known as Pan-European Public Procurement Online (PEPPOL). No similar standard exists in the U.S. In addition, certain other countries have issued mandates for switching to e-invoicing, complete with penalties for failure to comply. Again, the U.S. has imposed no such regime.
Yet another factor is the proliferation of smaller enterprises in the U.S., making up around 90% of all businesses. They lack the scale of invoice volume to justify investment in the technology — even though they stand to benefit greatly from making the move, according to Rossi.
Many U.S. companies still exchange invoices in PDF form or via e-mail. In theory, EDI offers a standardized option, but only when buyer and supplier share a service provider — a so-called three-corner market. When each uses a different provider, the lack of a standardized framework leads to problems with interoperability. The Business Payments Coalition is currently developing a standard that is intended to address the problem, Rossi says.
For companies both large and small, the benefits of e-invoicing are many, he says. The biggest is a marked reduction in operating costs. Automation eliminates paper and human effort in invoice processing. It optimizes cash management, speeds up workflow and allows suppliers to access early-payment discounts. Finally, it allows for real-time tracking of invoices, giving both parties “a quick snapshot” of any issues that might arise.
For more information, read Comarch's white paper “E-Invoicing: 4 Key Benefits U.S. Companies Are Missing Out On.”
