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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
  • Brokers
    • UK Brokerage Firms
  • Factoring Firms
    • Europe
      • UK
      • France
      • Germany
      • Italy
      • Spain
      • Holland
    • North America
      • USA
      • Canada
    • Australasia
      • Australia
      • New Zealand
  • Hi-Tech
    • Digital Platform/IT/Software Providers
    • UK Fintech
    • Articles
      • Enhancing Fintech Interoperability: Digitalizing Trade Documents for Efficiency and Security
      • The 7 Types of AI and Their Implications for the Future
      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
    • Deal Arrangers
    • Book Runners
    • Articles
      • The Roles of Deal Arrangers and Book Runners in Securitization
      • What is Trade Receivables Securitisation?
      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
  • Legal
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    • Articles
      • A Guide to Accounts Receivable Purchase Agreements and Invoice Discounting Agreements
      • The Challenges of KYC and AML Checks
      • What is The Model Law on Electronic Transferable Records (MLETR)?
      • Snapshot of Factoring Legal Schemes in England and Wales
      • How are UK Factoring Firms Regulated?
      • What is ISO20022 and Why is it Important?
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      • Economic News for 2022
      • Financial Crisis or Not?
      • Credit Suisse Bailout
  • Credit Insurers
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      • Credit Insurance in Trade Receivables Financing
      • The Benefits of Credit Insurance in Invoice Finance
      • Eligibility Requirements for Capital Relief by Using Credit Insurance
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      • How the War in Ukraine Affects the Price of Credit Insurance for Trade Finance
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Home E-Invoicing

Implementing an E-Invoice System

John Goodden by John Goodden
January 23, 2023
in E-Invoicing
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Things to Consider When Implementing an E-Invoice System
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Download file | Play in new window | Duration: 5:27 | Recorded on December 24, 2022

There are several things to consider for a company looking to implement an e-invoicing system. Different departments will be affected as well as suppliers and customers. There are also the technical issues involved in integrating different business systems into the e-invoicing facility. This post will outline these areas of concern.

Making the Case

The person wanting to move the company from paper invoices to electronic invoices will need to persuade senior managers of the value of the change. A compelling business case would need to find a way of calculating the average cost of processing a paper invoice and then in comparing that cost to the projected average cost for an e-invoice. This will show the savings that can be expected from moving from paper invoices to e-invoices.

Build the Scope Overtime

It is not prudent to switch over from paper invoices to e-invoices over-night. It is best to look first at customers who are regular payers and have a record of few invoice queries. Build out from this core of trusted customers over time to bring in more customers into the e-invoicing orbit. It is best to delay e-invoicing foreign-based customers until the legal aspects pertaining to e-invoicing in that country are understood and complied with.

The Transition Period

Bringing all suppliers and customers into an integrated e-invoicing system takes time. The tax inspector will need to be kept up to speed with which companies have moved over to e-invoicing and which haven’t. When a company is running both a paper and electronic invoicing system the monetary savings inherent in e-invoicing will be less distinguishable.

Training and Technology

It is not only the accounts department that will need to understand and operate a new e-invoicing system. Business line managers, procurement, finance and other managers all need to upskill to make the move to paperless invoices smooth. An employee will also need to keep up to date with regulatory changes regarding e-invoices both at home and in foreign countries.

Moreover, to fully take advantage of the benefits of e-invoicing, a company will need to use EDI technology (electronic data interchange). This technology requires specific IT skills. Staff will need to be trained in these skills if they don’t have them already.

More on Technology

An efficient e-invoicing system will need to integrate with accounts payable and accounts receivable systems. Companies that use Enterprise Resource Planning (ERP) software will need to integrate that with the e-invoicing technology.

The final integrated system will need to meet several performance criteria that include:

  1. Storing of other related documents such as credit notes, purchase orders, debit notes and remittance advice for auditing purposes;
  2. Be able to operate with customers and suppliers who use different IT systems;
  3. Be capable of exchanging documents with other companies regardless of varying accounting systems; and
  4. Be capable of structured data exchanges with other business systems to allow accurate planning and forecasting.

Working With Suppliers and Customers

The success of an e-invoicing system is dependent on its adoption by suppliers and customers. The less they are required to do, the easier it is to get compliance. One of the best ways to secure the agreement of suppliers and customers to adopt e-invoicing is to offer a variety of options that suit companies with different levels of IT complexity. For small and medium-sized enterprises a simple web form can be offered that only requires a device connected to the internet. Other companies will use Microsoft Excel or accounting software such as Sage or QuickBooks. The e-invoicing system must be able to integrate with these programs to facilitate the move to paperless invoicing. And some suppliers will use an ERP system to automatically generate invoices that are sent to their customer’s accounts payable system. Data will need to be converted from the ERP format to one that is readable by the e-invoicing system.

Above all, communication with suppliers and customers is vital in successfully onboarding them into your e-invoicing system. For those with foreign trading partners, language skills become another imperative.

In Summary

There are legal, organisational and technical barriers to the successful implementation of an e-invoicing system. Staff in varying departments of a business have to be taught to use the new e-invoicing system. Help and guidance have to be provided to customers and suppliers to make sure they can integrate their IT systems with the e-invoicing system being used. If all these things are done in a timely and orderly fashion the cost savings of using e-invoicing will soon become apparent.

Tags: business caseEDIelectronic data interchangeenterprise resource planningERPExcelforecastingplanningQuickBooksSage
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  • Home
  • About
  • Podcast
    • Summaries
    • Articles
  • Invoice Finance
    • Basics
      • What is Invoice Finance?
      • What is Reverse Factoring?
      • What are Trade Receivables?
      • What is the Cash Conversion Cycle?
      • What is Days Inventory Outstanding?
      • What is Days Sales Outstanding?
      • What is Days Payable Outstanding?
    • Advanced
      • Invoice Validation and Fraud Detection
      • Reasons Why Invoice Finance is Better than a Bank Loan
      • How to Choose the Right Factoring Firm for Your Business
      • A Closer Look at Factoring Agreements
      • What is Trade Receivables Securitisation?
      • Breakdown of the Costs for Factoring
    • Factoring
      • Why Companies Use Invoice Factoring
      • What Companies are Suitable for Invoice Factoring?
      • Factoring and Invoice Discounting
      • How Factoring Works
      • Asset Based Lending
      • Is Factoring Right for Your Company?
      • Accounting for Factoring
      • How a Company Enters into a Factoring Agreement
      • The Costs Involved in Factoring
      • Changing Factoring Company
      • The Relationship Between the Factoring Company and the Debtor
      • Legal Aspects of a Factoring Company Pursuing Payment Through the Courts
      • Factoring in the Construction Industry
    • Fraud
      • Types of Invoice Fraud
      • How to Combat Invoice Fraud
    • E-Invoicing
      • Legal Status of Electronic Invoicing
      • The Benefits of E-Invoicing
      • Implementing an E-Invoice System
      • E-Invoicing Adoption in Mexico and The Rest of the World
  • Brokers
    • UK Brokerage Firms
  • Factoring Firms
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      • UK
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      • Germany
      • Italy
      • Spain
      • Holland
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      • New Zealand
  • Hi-Tech
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      • The 7 Types of AI and Their Implications for the Future
      • Transforming Trade Finance: The Role of AI
      • The Different Programming Languages Used in Fintech Companies and Financial Institutions
      • UK and US Authorities Intervene in AI Sector
      • Web3 Applications and the Future of Trade Finance
      • What is Web 3?
      • What Can Fintech do for You?
      • What is Fintech?
      • Tokenisation of Finance
      • Payment Services in the Invoice Finance Sector
      • What is ChatGPT and Why the Fuss?
  • Rating Agencies
  • Securitisation
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    • Book Runners
    • Articles
      • The Roles of Deal Arrangers and Book Runners in Securitization
      • What is Trade Receivables Securitisation?
      • The Appeal of Trade Receivables Securitisation
      • Risk Mitigation for Trade Receivables Securitisation
  • Legal
    • Law Firms
    • Articles
      • A Guide to Accounts Receivable Purchase Agreements and Invoice Discounting Agreements
      • The Challenges of KYC and AML Checks
      • What is The Model Law on Electronic Transferable Records (MLETR)?
      • Snapshot of Factoring Legal Schemes in England and Wales
      • How are UK Factoring Firms Regulated?
      • What is ISO20022 and Why is it Important?
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      • The Collapse of the Russian Rouble: An Historical Analysis and Current Implications
      • The Current State of the UK Economy
      • Economic Forecast for the UK in 2023
      • Economic News for 2022
      • Financial Crisis or Not?
      • Credit Suisse Bailout
  • Credit Insurers
    • Credit Insurers
    • Articles
      • Credit Insurance Legal Aspects
      • Credit Insurance in Trade Receivables Financing
      • The Benefits of Credit Insurance in Invoice Finance
      • Eligibility Requirements for Capital Relief by Using Credit Insurance
      • What are Export Credits and Country Risk Classifications?
      • How the War in Ukraine Affects the Price of Credit Insurance for Trade Finance
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    • Markets in Crypto Act (MiCA) Becomes EU Law
    • An Introduction to EU’s Markets in Crypto-Assets (MiCA) Law 
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