U.S. procurement organizations are increasingly turning to electronic invoicing solutions to automate internal operations, but some adoption challenges still remain, according to the new 2016 e-invoicing report from Billentis. North America also lags behind in e-invoicing market maturity compared with leaders like Latin America and some European countries like Norway and Sweden.
The report said the U.S. is now beyond the early adoption phase of e-invoicing solutions, and many organizations are focusing on accounts receivable and accounts payable automation as well as purchase to pay (P2P), order-to-cash and other invoicing management technologies. Despite the interest in e-invoicing, organizations still struggle with limited budgets or funding for the technology. It has also taken the U.S. market longer to recognize the value of e-invoicing network providers than other countries, perhaps contributing to the lower number of e-invoicing providers available in the market — just 150, the report said.
Billentis, an e-billing and e-invoicing solution provider, puts out its e-invoicing report each year to educate organizations looking to replace paper-based invoice management solutions with more advanced e-invoicing technology. Across the globe, paper invoices still are “dominating the landscape,” the report said, but companies are taking small steps to automate and digitize their invoice management processes. Billentis also points to a “new era of digitization and automation” where the e-invoicing landscape could change dramatically in future years.
For the U.S. market specifically, the number of companies using e-invoicing networks is expected to grow from 19% currently to 41% in the next two years. The Billentis report calls out one example of future growth in the U.S. e-invoicing market, which comes from the public sector. Last summer, the U.S. Office of Management and Budget (OMB) directed federal agencies to implement e-invoicing systems by 2018.
The federal government processes more than 19 million invoices each year, 40% of which are processed via an e-invoicing system at the moment, according to the OMB memorandum. The remaining invoices that rely on manual processes can cause late payments and penalty fees, as well as poor visibility for businesses. E-invoicing eliminates inefficient paper processes and provides other benefits for all parties involved, the OMB said.
“Obtaining the full value of electronic invoicing requires a coordinated approach that will reduce burden and duplication to both agencies and businesses,” the OMB said in its memorandum to federal agencies. Spend Matters covered the OMB mandate in a recent whitepaper.
Billentis also identified a number of other benefits of e-invoicing solutions, including improving the data quality of invoices and eliminating the inaccurate information involved in manual invoice management.
Spend Matters Founder and Head of Strategy Jason Busch suggests “there’s a lot of semantics involved in defining and sizing the markets and growth for accounts payable automation, e-invoicing, supplier networks and B2B connectivity platforms. A lot gets confused in the actual definitions, which can make any type of public market sizing effort difficult. For example, is an invoice that is sent via a network as a PDF counted toward a sizing number of ‘e-invoicing’ systems or simply under supplier network metrics — or neither since it is still a PDF and not a true “electronic” record? With its annual report, Billentis at least provides a starting point to investigate these types of metrics and its report is a directional gauge of the overall market. It’s a useful starting point in these types of investigations.”
Stay tuned as Spend Matters examines the 2016 Billentis E-invoicing Report in more depth, including a look at other regions of the world with more mature e-invoicing markets.