Rolling Out E-invoicing
Rolling out an eInvoicing system
The first step towards implementing an eInvoicing system is to gain a full understanding of the process. In doing so there are a number of key factors to consider. While examining each, it is best to consider them both from how they will impact your own company as well as the companies on the other side of the invoice relationship.
Working through this process will;
- Provide a greater understanding of all aspects of the process
- Guide your thought process on how to approach the implementation
- Help to formulate your key requirements for selecting a system to implement
- Pinpoint the areas of focus to achieve maximum success upon rollout
The first consideration is to what extent do you want or are you ready to implement eInvoicing?
Are you considering?
- Inbound Accounts Payable
- Outbound Accounts Receivable
- Full eInvoicing implementation on AP and AR
Determine where your costs are and what they are in full.
What are your inbound invoice costs?
- Cost of labour to process paper invoices
- Labour costs resulting from data entry errors by your suppliers and by your AP dept.
- What are your stationary costs for inbound invoices – are you receiving soft copies and printing them in-house.
- Lost discounts for early payments.
What are your outbound invoice costs?
- Labour costs for printing and packing
- Stationary costs for paper, envelopes, printer cartridges
- Postage costs.
- Labour costs resulting from data entry errors by your AR dept or by your customers.
- Impact of reduced cash flow due to late payment as a result of later delivery or data entry errors.
Can you accurately answer the following two questions;
- What is it costing me in full to pay invoices?
- What is it costing me in full to get paid?
You can then start to look at each department and determine exactly where savings can be made.
This will determine whether you are ready for full eInvoicing or to introduce eInvoicing
on one side first. It will also help you to focus on particular functionality offered by
eInvoicing systems that will improve efficiency and reduce costs in specific areas of
your own current invoicing processes.
Is Your Business Ready
Once you know exactly what areas you want to improve, you should also look at what
impact the eInvoicing implementation project will have on your business. Knowing
your own processes thoroughly when talking to eInvoicing providers allows you to
determine how their offering will sit within your organisation and what is required
from you to reach a successful conclusion.
Questions to consider;
- What resources and skill-sets are required to see it through?
- What changes to your current process are required?
- How involved will you be in helping your trading partners to migrate from paper to electronic?
- What hardware changes are required?
- What are the upfront & on-going charges?
Is Your Technology Ready
Integrating with your in-house invoicing system is one of the key factors when deciding
on how to approach an e-Invoicing implementation. You will need to know if your
system already has a facility for importing and exporting invoice data. If so, does
it handle all the required fields of data to provide or accept a full picture of an invoice?
If you don’t have a facility in place, talk to e-Invoicing providers to determine what
they can offer to help with data presentation or retrieval.
off-the-shelf plug-ins for a range of accounting packages; others can read text,
CSV (comma separated values), XML or other common data outputs.
If you need fields added to an existing output or input by a third party provider,
determine the costs and times involved as this can impact the rollout. The key to a successful
rollout that involves a third party developer is to ensure
the third party buy in to the rollout dates, as non-cooperation can delay the
Consider the flexibility of candidate systems to meet your specific requirements.
You may wish to send statements electronically aswell as invoices. You may need to
send backup documents such as PODs or sales reports. Or you may currently use invoice
delivery as a way of delivering targeted marketing or information updates to
If you lose the ability to use invoice delivery as a channel for delivering other important
documents and notices to your customers – this must be considered in your cost analysis as you
will now send those documents independently and incur all the labour and postal costs
independently. It is not in any way an essential part of an e-invoicing system but it
does play an essential role in invoice delivery systems for some businesses, which is
why some e-Invoicing providers offer solutions to this problem.
Email is not e-Invoicing
A common misconception is that invoices sent by email are e-Invoices – this is not the case.
Email is just a method of exchanging digital messages and does not perform any of the functions that top level e-Invoicing systems perform.
- It does not carry the level of security companies look for in an e-Invoicing solution.
- It does not provide any interpretation for VAT compliance.
- It does not offer any data flow improvements by checking the integrity of invoice line, VAT or header totals.
- It does not integrate with most recipient systems.
Questions to consider;
- If your package is a mainstream accounting package – Is there a plug in?
- What are the setup/integration fees, including any third party work on existing data feeds?
- Do you want to send statements? (outbound only)
- Do you need to send backup documentation? (outbound only)
- Do you want to send additional customer information electronically? (outbound only)
- Does your system currently have the ability to output all necessary data in a satisfactory data format? (outbound only)
Supplier & Buyer Acceptance
With the growth of electronic invoicing over the recent past, it is becoming more rare that
a company is asked to integrate in some way with electronic invoicing for the first
time. Suppliers are asked to submit invoices using various methods and customers are
collecting invoices in various formats.
You may have a good idea of how open your trading partners will be towards your
e-Invoicing implementation, if not you may wish to poll a selection to get their
feedback. Some believe that offering e-Invoicing as an option will lead to a lower
conversion rate as some partners will opt-out who would have engaged if there was no
option. This is an area to be careful in however, particularly in certain industry
sectors with outbound e-Invoicing, as you may be obliged to offer a choice.
Therefore having choices and how that is handled may form a deciding factor in your
e-Invoice system selection. If you must deliver some as paper, some electronically
and others by other means will this create an admin headache for you instead of
Offering choice to suppliers for an inbound system is key to the success of engaging
suppliers. Suppliers who issue large quantities of invoices per month or invoices with
large numbers of invoice lines will be reluctant to keying invoices into a web portal.
Integrating with them can be costly for the supplier and time consuming for the
project. Some systems may be old or custom and limited in their data output
capacity. It is essential therefore to consider the options offered to suppliers
when selecting your system.
What charges will your trading partners incur? This is a sensitive area and can determine
the success of the project as well as influence the level of queries that will ultimately
come back to your business. There may be a set-up charge to your partner as well as per
transaction charges. Some system providers charge an annual fee on top of both.
Be clear on what your trading partners charges will be and also on what benefits
they will experience from e-Invoicing.
Check what is offered from an engagement point of view. How involved will you be in this
process and what resource requirement will be needed of you?
Will the system provider offer any kind of engagement services or advice? How will
the initial engagement happen, follow up calls, reminders and also objections?
Questions to Consider;
- What integration choices are available to trading partners?
- What are the charges to your trading partners?
- How are opt-out partners handled?
- Is there an engagement service?
Ready to go
Armed with a full understanding of what an e-Invoicing project entails, knowing exactly
what you want, what you will get and how your trading partners will be affected, you
can now embark on selecting the best-fit system, plan a time that best suits your business
and proceed with e-Invoicing with as smooth a transition as possible.