After a couple of decades, you’d think that electronic invoicing would be pretty much perfected — a done deal, with standardized formats across companies and across countries.
As Billtrust President Steve Pinado told Karen Webster, “Companies have been generating PDFs and sending emails with invoice data and attachments for many, many years.”
And yet, there’s no end of accounts payable (AP) software programs, B2B portals, various types of XML and other types of documents crisscrossing the electronic channels as companies create, collect and store transactional documents with their trading partners.
For companies looking to go global — no matter the vertical, no matter the size of the enterprise — there’s an additional challenge in the mix. eInvoicing is, or is in the process of being, mandated across hundreds of countries worldwide, noted Pinado.
Follow the Money (or the Tax Authorities)
And what’s lacking is consistency as these companies try to invoice their clients. Depending on where you look, different governments have different standards as they regulate taxes and customs, and as they seek to set up electronic, auditable document trails.
If companies run afoul of those standards, the invoices — which must be reviewed and approved by authorities before they get passed along to client firms — can get held up. And that impacts the sending firms’ cash flow. Each country has its own timetable for eInvoicing to become the law of the land (France and Poland have respective July and January 2024 deadlines, for example).
It’s all a bit of a mess, quite frankly — compounded by the sheer number of invoices generated, the sheer number of B2B portals and the fact that tax and compliance regulations can change significantly and rapidly.
The shift to eInvoicing and to the need to automate those back-end functions will become more urgent as various governments look to augment their tax revenues, and where the invoice is a critical piece of data. Instead of simply relying on audits, they capture the information as trade occurs and match what’s owed to the government against what’s actually being paid.
Invoice Orchestration May Have Its Day
There are a few ways to get ahead of the curve, submitted Pinado. One way is for globally expanding companies to find local providers to help format and submit those documents — a time-consuming and expensive proposition. Many companies have proverbial rooms-full of staff dedicated to handling invoicing and exceptions, tied to a never-ending cascade of spreadsheets.
Another avenue is to enlist the services of a platform provider such as Billtrust, which can take a more holistic, optimized approach to invoice presentment. That model holds particular appeal in an age where procurement, oversight, management and compliance challenges — not to mention data security — are top of mind as supply chains normalize, post-pandemic. Chief financial officers (CFOs) are looking ever-inward at their companies and seeking new ways to update and automate back-end functions. Change may be hard, but it’s necessary, and finding ways to convert invoices to revenue (and cash) more quickly winds up benefitting the company overall.
“We are a participant of all of the various standardization entities that are setting up, and we are certified across the globe for this work and to stand in the ‘middle’ and represent the parties on either side of the relationship,” he said.
At a high level, the platform model helps serve the need for a “translation layer” that helps firms scale their invoicing with efficiency, with consistency between trading partners and various jurisdictions.
Call it invoice orchestration.
“This provides opportunities for businesses to consider expansion into countries where they don’t really know yet how much volume they will generate,” said Pinado.
