Adopting and utilizing a new e-invoicing solution can be challenging for businesses and suppliers. The multi-step process will require participation from employees and suppliers. Let’s look at some common e-invoicing obstacles and how to solve them.
What is e-invoicing?
An e-invoice, or digital invoice, is an electronic document created by a seller and given to a buyer to obtain a payment. E-invoicing refers to the electronic delivery of an invoice using a standard format. Also known as electronic invoicing, this process simplifies the management, processing, and storage of digital invoices for audit, streamlining how invoices and compliance documents are processed.
What are some common e-invoicing challenges?
Some of the most common e-invoicing challenges stem from suppliers’ ability to work electronically, but only 28 percent utilize electronic invoicing. For the other 72%, a business is forced to accept, organize, and store invoices sent in multiple formats, including PDFs, papers, email attachments, and more. Submitting these invoices in these formats creates manual work that is time-consuming, error-prone, and frustrating.
Digitizing and automating e-invoice management benefits both buyers and suppliers, and the right software solution can reduce time spent correcting invoice errors, exception frequency, complicated workflows, and more. Here are a few common e-invoicing challenges and how to overcome them:
1. Fraudulent Invoices
According to a survey conducted by the Association of Certified Fraud Examiners (ACFE), businesses can lose up to 5 percent of their revenue to fraud. Having digital safeguards and processes will ensure that each invoice is coming from approved suppliers as recorded in a company’s supplier master.
This digital protection ensures that purchases are only placed with approved suppliers with the correct payment information and prevents the payment of invoices that come in with fraudulent information. This stipulation can help businesses identify fraud immediately.
2. Invoices That Don’t Match Purchase Orders
There are many reasons why an e-invoice may not align with a purchase order (PO), including price discrepancies, mismatched quantities, incorrect units of measure, and wrong product descriptions or part numbers.
It’s vital to establish a system that ensures that downstream documents match. This can help ensure that an e-invoice stays in sync so that it will match an incoming invoice from the supplier. Two- and three-way matching ensures that businesses pay for only the goods and services they’ve ordered and received.
3. E-Invoicing Approvals
An intelligent procure-to-pay platform can decrease the time spent chasing down approvals by automating the approval process and driving digital workflows.
This eliminates the need to send email blasts or chase people down. Approvals can even be submitted using a mobile device from anywhere and at any time.
4. Supplier and Customer Relationships
Convincing your vendors to utilize your e-invoicing system can be challenging, especially for smaller suppliers who may not have a system that can be integrated. Many of these suppliers may not have the resources to implement an entirely new e-invoicing solution.
How can businesses navigate this process and convince their suppliers to adopt their e-invoicing platform? It can be challenging to convince suppliers to use your supplier portal, since it’s much easier for them to use handwritten invoices or PDFs, and they’re likely working with numerous customers and using multiple portals.
Working collaboratively will help encourage participation, and taking a few small steps at a time will make this process seem less daunting. It may also be helpful to let suppliers know how your solution will benefit them from on-time payments and faster e-invoice delivery to the ability to view their payment status.
Take your e-invoicing to the next level.
Eliminate error-prone paper invoices, late payments, and mismatched invoices and purchase orders. Vroozi Invoice + Intelligence lowers your overall cost per invoice, reduces cycle times, and increases spend control through budget, invoice, and PO checks.
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