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Electronic Invoicing: What’s Holding it Back?

Electronic invoicing has been around for a number of years, but its adoption has been slow. Even as organizations that have adopted electronic invoicing often tout its benefits – which may include lower costs, improved visibility, increased efficiencies and an ability to focus resources more on value added tasks – more than half of the business-to-business (B2B) invoices within the US are still in paper format, according to a  research report from PayStream Advisors, Electronic Invoice Management: A Move to the Middle. So what is holding back the even more widespread use of electronic invoicing? Why are we still seeing so much paper in accounts payable (AP) departments across corporate America?

The report sheds some light on some of the reasons behind the slow adoption of AP automation:

Barriers to Electronic Invoicing

Source: PayStream Advisors, Electronic Invoice Management: A Move to the Middle, 2014

Source: PayStream Advisors, Electronic Invoice Management: A Move to the Middle, 2014

Supplier Resistance

The biggest barrier, according to the report, appears to be supplier resistance, even though electronic invoicing can help compress the processing cycle and accelerate payments. According to the report, one of the most common arguments for companies that are skeptical about electronic invoicing is “our suppliers would not do this.” In some cases, when suppliers are asked to join a number of eInvoicing networks by their clients, there could be resistance.

So what can buying organizations do to help overcome this barrier? Perhaps they should consider choosing a solution that is easy to use and free for suppliers, offers multiple invoice submission methods that suppliers can select based on their needs, and is supported by solid supplier onboarding services. The solution gives suppliers the ability to send invoices electronically and view payment status online.

Change Management

“If it ain’t broke, don’t fix it” is the mantra some organizations are guilty of following because, at the end of the day, bills (even if they are on paper) are getting paid and the lights are still on. While others are uncertain about the changes in business process that would be needed to implement an automation solution and the cost and technical challenges that could be involved in integrating such a solution with their existing back-end systems.

Software-as-a-Service (SaaS) solutions that do not require any software to be installed and are easily accessible from a Web browser can significantly mitigate the concerns of these organizations. Cloud-based SaaS solutions are typically faster to implement and are virtually ERP agnostic, integrating with a number of back-end applications.

Budgetary Constraints

What is the cost to implement electronic invoicing? Will there be a return on investment? Should the money be spent on something more core to the business? These are all questions often asked by organizations evaluating automation solutions. Early adopters of licensed, on-premise solutions may be concerned about high upfront costs, ongoing maintenance costs and periodic upgrades to the solution.

SaaS solutions can help address these questions by offering a subscription fee model that is based on the number of transactions processed through the system. So, you only pay for what you actually use and the upfront cost is usually minimal.

Despite all the roadblocks and concerns, electronic invoicing is likely here to stay and the shift from paper to electronic is surely happening.



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