Electronic invoicing hasn’t had the same adoption in the United States as Europe and Latin America. That’s because overseas governments mandated electronic invoicing to harmonize business and taxation across multiple languages, currencies, and tax jurisdiction.
That’s about to change, but not for the reason you think. Sure, the U.S. government is dipping a toe in the water of electronic invoicing by requiring that some agencies invoice electronically by the end of 2018 to meet an Office of Management and Budget mandate. But it will likely take some time for US government mandates to scale to the point where they dramatically affect B2B business.
Digitizing accounts receivable is easier than you think – and delivers a host of business advantages. Download 7 Fantastic Benefits of Transforming Accounts Receivable to learn more.
No, we’re talking about another type of mandate that you may not be aware of: US companies are increasingly requiring that their suppliers invoice them electronically on their own accounts payable (AP) portals.
Your newest digital dilemma is this: Your customers digital AP initiatives are making your own company’s accounts receivable (AR) processes more manually. If your company can’t connect digitally to your customers using an API, you may find your time and costs exploding. That’s because customers will require that your AR staff enter data manually into their portals.
How could this impact your business?
A recent Credit Today benchmarking survey found that:
- Suppliers are entering data into an average of 12 portals, which is significantly up from a year ago.
- One in four customers is charging a fee for use of their portals.
- The average supplier is entering 478 invoices into customer portals, but several report entering more than 1000 or even 10000 invoices manually.
- It’s easy to see how this could impact your business.
It’s easy to see how this could impact your business.
- AR time explodes, because they are logging into multiple portals and entering invoice data
- Invoice errors increase, because busy staff are rushed and make more mistakes than normal
- Costs explode, because customers are increasingly charging a fee to access and use portals
While we can’t calculate the impact on staff time, we have projected that costs per invoice could skyrocket from $13.50 per invoice (a typical fee for AR staff manually processing an invoice) to $29.21 per invoice, which includes the average customer manual data entry fee of $15.71. It’s not hard to envision fees skyrocketing to $40 to 50 per invoice when staff time is accounted for.
But there’s more: Electronic invoicing in the United States is in its infancy. What happens when most of your customers require that you use portals?
Don’t wait for customer mandates to create a financial and business hardship: Implement your own SaaS-based Order2Cash platform today. You can connect to a world of customers via an API and exchange data directly, in the format they require.
Companies that automate invoicing can decrease invoice costs down to $5.50, which is a much more sustainable cost structure. They also gain other great functionality, such as online contracts and purchase orders, integrated credit management, digital payments, and collections.
Move ahead of mandates now, to get control over invoicing and payments. Eliminate the grunt labor of manual invoicing with straight-through processing, business intelligence, and integrated tools.
Get 7 Fantastic Benefits of Transforming Accounts Receivable to learn how electronic invoicing can help your business with faster time to payment, greater cashflow, and lower per-invoice costs.