Geography Requirements Still the Primary Mandate for E-Invoicing Adoption (Part 1)

Electronic invoicing (e-invoicing) and invoice automation can deliver a range of hard-dollar savings and working capital improvement benefits to procurement (both sourcing and supplier management/development teams) and finance (treasury and A/P, rolling up to the CFO) organizations. If you need any proof of this (or how to effectively build a business case for electronic invoicing), download our latest research on the subject (available for free, courtesy of Basware, Coupa, OB10, Rearden Commerce and Verian). This paper, E-Invoicing Comes of Age -- Discovering What's Possible From the Latest Electronic Invoicing/Invoice Automation Capabilities, provides an ideal primer on the opportunity for e-invoicing, put into business terms. But country-specific regulations still appear to be the key motivating force for organizations to adopt a set of key technologies that they should be doing anyway.

Consider TechTarget's analysis of e-invoicing adoption and requirements in Brazil. According to the article, "Thanks to some of the world's strictest e-invoicing regulations, in Brazil, trucks don't roll until the government gives the go-ahead. The document flow is elaborate. Upon approving the initial submission, the government returns an official NF-e file to the manufacturer, and the recipient of the goods gets an email copy. The file is also converted to a human-readable, printed document that must accompany the shipment. At any point along the route, police or custom officials can ask to scan the barcode."

Translation: e-invoicing is a required compliance mechanism to make sure the government gets paid. Or, as TechTarget suggests, e-invoicing requirements and challenges "are most common in countries in Latin America and Europe that assess a value-added tax (VAT). Properly accounting for VAT can mean shipping delays and fines for noncompliance, but additionally, without proof of payment, companies miss out on VAT rebates, effectively adding costs at points along the supply chain." Yet organizations that just deploy e-invoicing to be compliant with local regulations are likely missing out on the broader business value that electronic invoicing can bring. If you're curious about the subject, our latest Spend Matters Compass analysis is the perfect place to start.

- Jason Busch