A report by Billentis on e-invoicing outlines market developments and potential for huge growth, which is based not just on the fact that the large majority (90 per cent) of all invoices are currently processed manually, but also by growing government digitisation and requirements for invoices to be exchanges through tax authorities ('clearance model').
The report covers the four main e-invoicing market models:
- supplier direct (1 to any)
- buyer direct (any to 1)
- network (any to 1 to any)
- clearance model (any to 1 to any)
The author of the Billentis report, Bruno Koch, outlines how the heady rise of e-invoicing has been driven by government adoption, by tax requirements to submit invoice data in electronic formats and by digitalisation of many other aspects of business, from inventory to trade and financial reporting. He writes: “The digital transformation is no longer an option, it’s the imperative. It is rather the question of how to unleash the power of the digitalisation while maintaining a healthy business.”
But it is evident that, with nine out of 10 invoices globally still processed manually, there is huge scope for an even greater rise in e-invoicing adoption. The clearance model – which is used by governments that require businesses and taxpayers to exchange digital invoices (or related data) through tax authorities – is expected to be the dominant control method globally from 2025. This will also bring savings for companies: 8-39 per cent tax of tax compliance costs compared to paper invoices, according to Billentis's report.
The report adds that emerging technologies such as blockchain, cloud aggregation platforms, robotic process automation, machine learning and advanced analytics “may pave the way to improve the degree of business process automation and exploit the full potential for savings”. Koch states in the report: “For businesses and public-sector organisations, we see a need to change from a reactive to a proactive approach. This helps to avoid a heterogeneous solution, channel, format and process landscape. We recommend defining a holistic business process automation strategy as soon as possible. Reading this report can be a good start.”
Six key facts about e-invoicing
Six key figures from the report include:
- In the past two decades, the number of specialised e-invoice service providers globally has jumped from fewer than 15 before the year 2000, to almost 1,500 today.
- Billentis estimates that the size of the global e-invoicing market in 2017 is €3.3 billion, and that it will reach approximately €16.1 billion in 2024.
- More than 90 per cent of all invoices worldwide are still processed manually.
- E-invoices that are issued using clearance models reduce tax compliance costs by 8-39 per cent compared to paper invoices.
- The estimated total global bill/invoice volume is 400 billion.
- The additional volume of invoices in the broader legal sense and 'invoice-like documents and messages' can, depending on the country, be as much as five to 15 times more than the invoice volume.
CTMfile take: This report is an interesting read and if (god forbid!) your company is still processing invoices manually, then this report explores some of the benefits of moving to a digital invoicing system. If you've already been convinced, what benefits has your company seen from moving to an e-invoicing system?
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