Friday Rant: We Don't Submit Electronic Invoices, So Why Should You?

A couple of weeks back, a long-time reader challenged me to talk about my own experience as a P2P analyst and small business owner as to what it's like to be on the actual vendor side with all of the companies we do business with (i.e. many of the providers who offer P2P and invoicing capabilities in the market today). The reality would probably shock readers -- we've never officially submitted (at least in the US) an electronic invoice via a portal or ever paid network or intermediary fees for the privilege of submitting an electronic invoice. Granted, a little part of this is stubbornness on my part -- I refuse to pay a tax or any additional fee when I see little or no benefit from it (call me a libertarian supplier P2P fanatic, if you will). My favorite story to tell people is how we got one of the vendors in the space to agree to the following contract language: "Please note that any XYS-imposed network or related fees will be re-billed to XYZ as part of this agreement."

Granted, I've also personally spoken with AR people and told them that I'd be happy to submit an electronic invoice if they could prove to me how I would benefit from paying for the privilege (I've yet to hear a good answer). I also admit here that I'm probably a hard customer to please given my personal background on the subject, but I don't buy the argument of early or on-time payment -- unless we pay for the privilege by getting a buzz cut -- for small vendors as a benefit. If a customer of ours is violating the terms of a contract by not paying based on agreed-upon terms, we have certain ways of remedying that situation in the future -- as do all suppliers.

Arguments for/against electronic invoicing aside, 95%+ of the reason we don't submit invoice electronically is extremely simple -- we don't have to. And this goes when it comes to even the AR departments of some of the largest vendors in this sector that have solutions that they're selling to customers in the area. Now, granted, we've been asked to move down the e-invoicing path more than once. But knowing what we know, it's fairly easy to get around the system and the P2P/e-invoicing on-boarding process (a dirty secret of P2P enablement is the number of smaller suppliers that drop out of the process).

Now, it's worth pausing for a moment to examine semantics. What the heck is an electronic invoice? This is a topic I've covered before. For my definition as a small business owner, an electronic invoice is not an emailed invoice (incidentally, email is our preferred means of delivery and we rarely -- and I mean rarely -- even submit true paper invoice anymore). Nor is an electronic invoice an invoice that we mail to some defined address where we know it's scanned and then put online for us to marvel over via some portal that acknowledges receipt. No, an electronic invoice by our standards is one that is either generated via a portal or one that must directly integrate with our financial system.

I suppose you could stretch the definition to the realm of cards as well and that by accepting card-based payment (or online payments), you're effectively participating in an electronic-invoicing arrangement, especially if the invoice/order is generated automatically. In this regard, I supposed we have submitted electronic invoices, but from our perspective, the card world is a fundamentally different animal (though it does not have to be, as at least one vendor in the EIPP space is trying to prove.

So there you have it. One of the top media sites and research shops covering the P2P market, which works with dozens of vendors and service providers within it, gets away with email invoices and has never had to pay a network fee (even with providers that make money directly or indirectly from users today in this manner). Granted, part of our experience in getting around e-invoicing is knowing how it works. But until somebody quantifiable proves the benefit of doing anything besides sending an attached email PDF given our individual circumstances as a company (e.g., not caring about early payment) or 100% mandates that they won't do business with us unless we follow their portal or network-based requirement, we'll stick to a model that works well for us. Moreover, it's one that still does not cost us a stamp.

As a final note, I know the time will come when we're forced into true e-invoicing, most likely at our cost. And you can be sure that when it happens we'll find creative ways of charging back our customers for the fees we're required to pay.

Jason Busch

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