Experts at SIBOS Conference See Market Driving Out Closed Networks as Users Demand The Benefits of Interoperability

Europe generates some 30 billion invoices per year, of which only some 7% are electronic. But even though adoption has been slow in all geographies, a panel of banks, system providers and public sector e-invoicing experts sees every reason to be optimistic about the future success of e-invoicing.

Ilfor Williams, senior vice president, Fundtech FSC, reported consistent growth of 30% or so, year-on-year, in Europe. “We’re reaching the point where it is really becoming interesting to be in this market,” he said. Chris Bozek, managing director, head of global trade and supply chain products, Bank of America Merrill Lynch also saw a change underway, with interest growing strongly among middle market companies.

The session’s moderator, Susie West, CEO, sharedserviceslink.com, set a clear definition: e-invoicing is when an invoice – a legal request for payment by a supplier – is sent as a structured data file that flows from the supplier to the buyer in a legally recognised way, without any manual rekeying. “E-invoicing is in the top three priorities right now for corporations and the scope of the opportunity is huge,” she told a packed session.

But there were reasons why adoption had been slow. Eric Campbell, chief technology officer, Bottomline Technologies pointed to connectivity, and the disruptive nature of a move to e-invoicing, as the biggest issue. “Sending and receiving has proved difficult. The industry has been attacking it from all sides – for example, we’ve seen de-materialisation of invoices, using scanning. And we’ve seen a ‘walled garden’ or closed networks approach.”

West wanted to know what banks could do to accelerate adoption. Bozek offered two key insights: first, he said, e-invoicing actually offers broad working capital benefits to corporates, especially when linked with early payment discounts or supply chain financing – so conversations should not be about efficiency alone. “We need to help corporates make the business case. Because e-invoicing is elective, there has to be a clear RoI.” Secondly, banks needed to recognise all the different stakeholders within a company – such as accounts payable, IT and treasury – and the complexity of the decision-making process around e-invoicing. Senior level sponsorship of a project could be very helpful here.

The ability to link e-invoicing to payments and to multiple payment types including cards was also highlighted as delivering valuable benefits to buyers, as well as suppliers. “It all helps to drive payment certainty and working capital management,” said Bozek. A growing use of supply chain finance was also relevant here. “The global financial crisis went a long way to helping corporates understand the value of their supply chain, of vendor health and supply chain finance,” he commented.

Consolidation

The role of the public sector in promoting e-invoicing should not be underestimated. Finland is one of the most advanced countries for e-invoicing and Keijo Kettunen, head of payment transactions, State Treasury of Finland, explained that tight collaboration between different interest groups and the wide availability of internet connectivity and electronic banking to consumers had been critical success factors. Bozek saw government aiding adoption in two ways – making policy to ensure that e-invoicing was easy to achieve and also through its procurement role. In a number of countries, state and federal governments were mandating or moving towards mandating e-invoicing.

Looking ahead to 2020, the panel saw most invoices being delivered electronically in most countries, dramatic consolidation among e-invoicing providers and payment networks such as SWIFT being clearing houses for e-invoicing.