Adoption rates of e-invoicing and purchase-to-pay systems remain low, even in Europe, let alone Latin America. However, there is a steady stream of developments which are slowly building the momentum which will (eventually) turn into a breakthrough:

• the European Parliament earlier this month voted to adopt the new rules for e-invoicing in public procurement published by the EC last June. We’ll have to wait for the proposals to become fully enshrined in national law over the next year or so, then all public authorities in Europe will be required to support e-invoices sent to them, providing they comply with the new common standard set out in the directive.
• the major e-invoicing networks keep expanding fast and are setting up local agreements around the world. OB10 partnered with PNC in North America, and have just signed a deal to deliver compliant e-Invoicing in Brazil through its partnership with Comprova, an officially accredited Brazilian certification service provider and digital signature platform. Brazil is a leader in e-Invoicing with a government mandate and market accustomed to automated invoice technology. In addition to complying with the complexity of tax and e-Invoicing regulations, companies are looking to streamline their invoice processing. 

Country rollouts

When governments insist on using e-invoicing then starts to happen fast. For instance, since 2005, all government institutions in Denmark have been required to accept only invoices sent to them in a digital format. Today, the country is now leading the way with 76% of invoices being sent electronically. OB10 and Comprova are clearly hoping that happens in Brazil.

But ‘on-boarding’ suppliers onto e-invoicing schemes is tortuous and takes a long time, even if you have really effective on boarding systems. One of the major problems is for the mid-sized companies who are too big to use the e-invoicing portals and haven’t got the resources to develop the systems to provide XML or EDI files, is to use the PDF reading invoice services from some e-invoicing suppliers, but they don’t suit all companies. The move to e-invoicing will take time. 

Moving to procure-to-pay services

Procure-to-pay services is where all this automation really starts to pay off. One of the most exciting developments in the move from e-invoicing to procure-to-pay was OB10’s launch of Express Pay in 2012 which offered dynamic discounting to ALL suppliers. In September 2013, a new company, Tungsten Ltd, was launched combining OB10 and financing with specialist supplier analytics services. This new bank and other arrangements are expected to have the final regulatory approval by the end May 2014. Then with all the pieces in place, Tungsten will, as Edmund Truell, Group CEO of Tungsten Corporation plc, commented, “The opportunity to create a disruptive global player is even greater than I first thought. We can realistically aim to create the leading global digital invoicing network, serving the world’s largest corporates and governments. Now that we are on the final straight to getting the Bank fully compliant and approved, Tungsten will start to offer suppliers access to trade and working finance on a transparent and simple to execute basis….. Tungsten Corporation thus aims to transform the global supply chain.”  

Financing the supply chain 

Financing on a ‘transparent and simple to execute basis’ is what is needed in the supply chain today. That is when moving to procure-to-pay really starts to pay off, and it may persuade many SMEs to move to e-invoicing. The reality is that the traditional SCF is complicated and only serves a part of the market, see item on C2FO. The new ways of financing like Tungsten’s Express Pay could have a major impact.

CTMfile take: Corporate treasurers of large MNCs have a responsibility to help all suppliers in their supply chain not just the suppliers that their banks are happy to deal with. There are now several different ways to support ALL suppliers as these examples show.