Faster Payments Happier Customers e Invoicing Best Practice for Accounts Receivable

8/3/2019 Faster Payments Happier Customers e Invoicing Best Practice for Accounts Receivable

1/14 Basware Corporation 2010 | www.basware.com

E-invoicing Best Practice orAccounts ReceivableWhitePaper

November 2010

Faster Payments, Happier Customers

- How e-invoicing accelerates the order-to-cash cycle

Juha HkmiesVice President o Market Trends at Basware Corporation

[email protected]

Article by
mailto:juha.hakamies%40basware.com?subject=juha.hakamies%40basware.commailto:juha.hakamies%40basware.com?subject=juha.hakamies%40basware.com


2/14 Basware Corporation 2010 | www.basware.com 2

1 Executive Summary

The new normal o constant cost savings is making corporationstarget new levels o eciency and increase automation o theirprocesses. CFOs are acing more pressure than ever beore to cut costsand improve nance processes, especially cash fow orecasting andworking capital management.

According to our recent Cost o Control 2010 research1, the keydriver CFOs named or higher eciency was automation, with 72%o companies having either increased their automated processes orplanning to increase automation within the next 12 months.

Todays leading companies see replacing manual, paper-based invoicingwith an automated order-to-cash process as a valuable way or AccountsReceivable to increase cash-fow visibility. An automated process has avital impact on a companys cash management, but it is greatly aectedby the procurement and invoice handling processes o the companyscustomers.

Companies that have moved rom paper invoicing processes to ullyelectronic invoicing report signicant improvement in days salesoutstanding (DSO) perormance, which leads to increased customersatisaction and, ultimately, a competitive advantage.

This white paper explores the benets that companies can gain throughe-invoicing in the broader order-to-cash context and oers brieguidelines on what to consider beore going orward with e-invoicing orsales invoices.

Check also the

recent Basware

research reports:

Cost of Control

- Wheres the

Money?

Find out the

opinions and

priorities o 550

fnance executivesaround the world.

By Dr. Markus Maedler

and Dr. Steve Jones

IESE Business School

and Indiana University,

Kelley School o

Business

(June 2010)

Lost In

Transaction

- A Basware

Research Report

or Accounts

Payable

New global study

revealing the

distance let to run

in achieving the

vision o a modern

and efcient AP

department.

(July 2010)

Table o Contents

1. Executive Summary 2

2. Why integrated buyer-supplier collaboration should be onevery companys agenda 3

2.1 Defning an electronic order-to-cash process 32.2 Integrated processes ensure cash visibility

and customer retention 43. E-invoicing as the catalyst for process integration 6

3.1 Market drivers or e-invoicing 73.2 The need or an open and global e-invoicing network 9

4. Getting started - 5 practical considerations for evaluating

your service provider 10

5. Conclusions 13

Sources 14
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2 Why integrated buyer-supplier collaborationshould be on every companys agenda

In general, nearly every companys vision is to become an integral part otheir customers supply chain. For a key supplier, this vision would meancontinuous sales and oten shorter days sales outstanding (DSOs). Anintegrated supplier would likely be the customers number one choice andthus less vulnerable to competition. Thanks to modern technology that allowscompanies to automate both the order and invoice processes, this desiredintegration has now become possible.

Industry analysts describe the buying companys order and invoice processesas a holistic purchase-to-pay (or procure-to-pay) process, while the supplierscorresponding end-to-end process is known as the order-to-cash cycle.

2.1 Dening an electronic order-to-cash process

Simply stated, an invoice is a result o an order placed by the customer or aproduct or service that has been delivered to the customer. For a companyto get quick cash infow, the invoice must correspond to the original orderand it needs to be paid at the latest by the due date. The company canensure accurate invoices by streamlining their own order-to-cash processand improving the quality o the invoice data. Prompt payment is much moredependent on the customers invoice handling process and possible paymentpolicies.

As in all processes, any manual step is a slowing actor. To eventually enableinvoicing that is as ecient as possible, companies should aim at bothautomating their order-to-cash processes and reducing as much as possiblethe manual steps in their customers invoice handling process.

In a ully electronic order-to-cash process, electronic ordering allowsautomated billing and provides 100% invoice compliance (see the denitionon page 9) at the customer end. Once integrated with the customerse-procurement environment, the electronic processing o customers orders

ensures targeted, quickand errorless invoicing.

Finally, electronicorders signicantlyspeed-up invoiceprocessing at thecustomer end byproviding an audit trailand, especially, bysupporting conversionto electronic invoices.

Picture 1.

The integrated order-to-cash process as part o the electronic buyer-supplier collaboration.



2.2 Integrated processes ensure cash visibility andcustomer retention

The procurement and nance dialogue can be seen as the main step inautomating the customers purchase-to-pay cycle aecting AccountsPayable and procurement unctions. On the other side, the integrated buyer-supplier collaboration brings together the suppliers Accounts Receivable andcustomer service unctions to improve the order-to-cash cycle and customersatisaction.

There are three critical touch points (Picture 2) between the buyers andsuppliers processes: receipt o the order rom the customer, delivery othe ordered goods or services, and receipt o the invoice by the customer.Traditionally, all o these process touch points have involved manual work,

with the potential or errors at any and all points.

In the best-in-class process or automated order-to-cash, automation enablesthe integration o all three critical touch points with the customers purchase-to-pay process:

Electronic ordering provides a new kind o process transparency andenables the company to streamline the sales process through moreecient order processing, to optimize warehouses, and to improvecustomer service throughout the order-to-cash chain.

Automation enables a direct conversion o the order inormation into an

e-invoice. This conversion signicantly improves the quality o invoicingbecause it eliminates the errors typical to manual ordering such asincorrect delivery addresses or incorrect sums.

E-invoices can be transmitted directly to the customers accounts payablesystems to ensure ast processing.

Picture 2.

The critical touch

points between

the buyerspurchase-to-pay

and the suppliers

order-to-cash

processes



For companies, it is the improved delivery/invoice quality that is the very keyor enabling the order-to-cash process automation that eventually leads toshorter DSOs and desired top-line benets.

The invoice quality is also highly appreciated at the customer side because itenables the automated invoice processing and keeps the processing costs toa minimum.

Overall, the automated and integrated buyer-supplier process delivers tocompanies the long-desired cash visibility that greatly improves their workingcapital management (See Table 1).

Working CapitalManagement

Accounts Receivable IT

Easier and cheaper management

o working capital with better

cash-fow orecasting

Reduced invoicing costs compared to

manual processes and paper invoices

Eliminates the need to build

and maintain an internal

e-invoicing solution

Faster payments Faster and easier

dispute resolution

Lower costs with a hosted service

Transparency into the

customers payment cycle

Increased accuracy with verication

that invoice data matches the

purchase order and goods delivery

Easy maintenance because the

service provider maintains the

connection to multiple buyers

Ability to optimize warehouses Real-time invoice and

payment status data

Ability to easily implement electronic

invoicing with your own vendors

Increased customer satisaction

by meeting expectations

or electronic invoicing

Multi-ormat support by

e-invoicing service providers

allows buyers and suppliers touse their accustomed ormat

Simpler to manage VAT issues

and invoice archiving

Supports business growth

without adding resources

Improved ability to support

compliance and audit trail activities,

especially or multiple countries

Ability to produce inter-

company invoices

Discounts calculated

automatically per contract

Table 1.An integrated buyer-supplier process

within an interoperable e-invoicing networkbrings signifcant benefts to a company.



3 E-invoicing as the catalyst or processintegration

E-invoicing essentially means sending invoices electronically. However, thissimple denition o e-invoicing encompasses a large variety o e-invoicingsolutions that dier primarily on their depth o integration with otherbusiness processes. According to a common denition, an e-invoice is anelectronic document that includes at least the same inormation as a paperinvoice: the invoice data and an invoice image.

As stated above, in an ideal integrated process, an e-invoice is sent directlyrom the suppliers billing system to the customers electronic invoiceprocessing system, where it will be automatically matched and approvedagainst the purchase order data and then transerred to a payment process

without any manual processing steps such as scanning or manual invoiceapproval. From the archiving point o view, electronic invoices and electronicarchiving ree up cabinet space and can in act be ound and viewed moreeasily than paper invoices.

For both medium-sized companies and large global companies, solutions areavailable that leverage electronic invoices to connect the suppliers order-to-cash process (driven by Accounts Receivable) and the customers purchase-to-pay process (driven by Accounts Payable).

Especially where a companys receipt and processing o orders placed bycustomers is closely integrated with both their customers e-procurement

and invoice processing environments, e-invoicing can ensure ull complianceo the invoice with the supplier agreement, submitted orders, and items orservices delivered, as well as deliver a quick payback on investment.

Regardless o their size, companies are acingincreasing requests or even requirementsto go electronic in order to retain importantcustomers. Even with smaller invoice volumes,e-invoicing is most oten a cost-eectivesolution because the service provider canquickly convert the paper invoices into truee-invoices to enable automated handling by the

customers processing systems.

We have challengesmeeting due dates on paperinvoices with short payment

terms. Electronic invoicingenables the timely handling

and payment.

Erol Engin

Accounts Payable Manager

at Cargotec
http://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspx



3.1 Market drivers or e-invoicing

E-invoicing is seen as a business process accelerator, especially or businesses

that base their growth on supplying large enterprises. According to recentmarket research4, these companies currently issue around 19% o e-invoices,but this share is likely to go up dramatically as their large customers continueto invest in nance process automation and increasingly insist on e-invoicing.

The actual drivers or a move to e-invoicing are multiple because o thevaried perspectives o the dierent stakeholders who would most benetrom the change. For example, company managers will be motivated by aninterest in increasing overall prots, while nance and IT departments will bemotivated by the signicant reduction in administrative burden that can beachieved through e-invoicing.

Consider the our actors that Billentis3, an European market research rm,identies as the main drivers or e-invoicing:

1. External pressure rom the customer

Once a large customer starts demanding electronic invoices instead o paper,e-invoicing oers an opportunity to integrate deeply into the customerspurchase-to-pay process and to strengthen the companys position againstthe competition in the customers supply chain. Many companies switch toe-invoicing under customer pressure and realize only aterwards what a clearcompetitive edge they have achieved

by doing so.

2. Internal cost pressure

A manual invoicing process is expensive becauseit involves several steps. According to Billentis4,a company with 5,000 employees can save morethan 50% o its invoicing costs by switching toe-invoicing. These savings would come primarilyrom the ability to avoid manually printing,mailing and archiving the invoices.

Although oten not recognized at rst glance,other cost items that can be reduced bye-invoicing are invoice inquiries in case odispute, IT operation costs, payment ees (e.g. noees in the case o ully automated processes),credit invoices and customer requests or copieso lost invoices.

3. Quality improvement

Invoicing quality covers both the invoice contentand the invoicing process. An example o content

issues is when the invoice content does notmatch the order that the customer has actuallyreceived.

We knew or a long

long time that we reallyneeded to make the moveto electronic invoicing,but we needed the kickto go ahead. When the

customer came to us wehad the perect businesscase or the technical andorganizational changes.

Klaus- Dieter Leigen

IT manager at Toshiba
http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspx



An example o process issues is when the company systematically invoicesits customers beore they have received the order. In both cases, the resultis perceived by the customers as bad service. Inaccurate data on the initial

invoice is also likely to result in additional costs to the company, because itmust issue credit invoices.

4. Process bottlenecks that require innovation and automation

To a CFO, invoicing and debt collection are a companys most importantnancial processes. The best e-invoicing solutions oer an opportunity toremove invoicing bottlenecks by synchronizing invoicing according to thegoods delivery to the customer and by assuring accurate invoice data.

I the customer has automated its accounts payable process, then e-invoicingallows the company to signicantly speed up cash infow and nearly automate

its debt collection processes.

It is clear that e-invoicing delivers a great many nancial benets tocompanies. The act that it can be easily adopted as a service also benetsthe companies internal IT resources because there is no need to actuallybuild or maintain any specic e-invoicing capability (see Table 1).

However, it is too oten orgotten that when targeting aster cash infows,e-invoicing can bring us only to a certain point. To go beyond that point, weneed to consider improving a broader picture: the supplier companys ownorder-to-cash cycle and how that links to the corresponding purchase-to-paycycle at the buyer side.

With the eliminationo the delay resulting

rom manual orderingand shorter deliverytimes, we can ocus

more on actualcustomer service.

Jyri Virtanen,

Logistics Director at Plandent
http://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Plandent.aspx



3.2 The need or an open and global e-invoicing network

Awareness o the clear prot benets that companies are able to achieve

through e-invoicing, together with the rapid emergence o e-invoicingapplications and service providers, has increased the demand or greaterstandardization and interoperability at national, European Union, and globallevels.

The European market research rm Billentis estimates that nearly 1.3 billionB2B invoices will be sent electronically in 2012. Although 2,600 corporationswill become new e-invoicing users5, electronic invoicing is still a verysmall portion o all invoicing activity in Europe and globally. For Europe,analysts estimate that approximately 7% o all B2B and B2C invoices weretransmitted electronically in 2009. Worldwide, e-invoices are approximately0.5% o total invoices.

For instance, on the EU level attempts have been made by introducingdirectives to deliver clearer guidelines that remove the e-invoicing barriersby ratiying minimum data content and by giving authenticity requirementsor an e-invoice. The most recent directive stating simplifed rules or VATinvoicing aim to treat e-invoices as equivalent to paper invoices.

In addition to the legislative challenges and lack o technical standards, theclosed customer networks o the dierent e-invoicing solution providershave slowed the establishment o truly global e-invoicing. To be able toapply e-invoicing to their entire customer base, companies have been

practically orced to either collaborate with many dierent e-invoicingservice providers depending on their customers agreements or to buildthe e-invoicing ability by themselves. Both o these approaches would becostly solutions to adopt and maintain on a long-term basis.

The situation is improving quickly as the best-o-breed service providershave started to cooperate with each other in order to enable continuouslygrowing e-invoice trac between their customers and across nationalborders and continents. As a European initiative, the EU e-invoicing expertgroup released a report6 that, in addition to giving guidelines on VATcompliance, calls or service providers to work with each other to makee-invoicing as simple as possible or customers and to remove all obstacles

to global expansion.

Although wide adoption o e-invoicing is still in the beginning stages, it isevident that paper invoices will be replaced by electronic invoices in theuture throughout Europe and the other continents. Companies based in theNorth America and Asia that have signicant exports to Europe will wantto take advantage o the increased speed and control in cash collectionenabled by e-invoicing.

Ensuring 100%invoice compliance

Invoice compliance has two

essential dimensions that are

diicult to achieve in a manual

process but that are easily

ensured in the electronic buyer-

supplier collaboration within

an interoperable network.

Compliance across the entire

buyer/supplier relationship

The ordered and invoiced

items comply with thecustomer contract

The ordered items comply

with the electronic

catalogs the company has

provided to its customers

The items delivered

match the order

The invoice relects

the correct orders,

deliveries, and customer

contract terms

Legal requirements

aecting electronic order-

to-cash process

Minimum data content and

authenticity requirements

or an electronic invoice

set by European Union

Directive 2006/112/EC on

Value Added Tax (VAT)

Country-specic

regulations or

authenticity and integrity

o electronic invoices
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/115789.pdfhttp://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/115789.pdfhttp://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/115789.pdfhttp://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/115789.pdf



4 Getting started - 5 practical considerations orevaluating your service provider

Most o todays companies already have all the components they need tostart e-invoicing. E-invoicing no longer means investing in risky and expensivein-house development. Instead, companies can quickly and cost-eectivelyadopt an existing e-invoicing solution rom a well-established service provider.

Today, most o the e-invoice trac is managed by e-invoicing serviceproviders. Companies use these services due to lower costs, more ecientstart-up, compliance with VAT regulations, and ease-o-use. Above all,companies can benet rom the best practices the service providers havedeveloped over their years o connecting numerous buyers and suppliers.The best-in-class e-invoicing service providers have a range o solutions to

oer to companies based on their business size, invoice trac and theircustomers ability to process e-invoices.

We have listed below ve key things to consider when selecting an e-invoicingsolution.

The third-party service providers oten charge a time-based and/or volume-

based ee or sending e-invoices and these costs should be included in thee-invoicing business case. As a best practice, Basware recommends that acompany careully document all o its solution requirements and ask serviceproviders to provide a binding proposal based on those requirements. To helpyou evaluate proposals, uture e-invoicing costs should orm no more than40-50% o the costs o non-automated and non-integrated processes.

The steps or getting started with e-invoicing depend on the size o thecompany. Given the pressure on many companies rom their large customersto adopt e-invoicing, many service providers invite small companies to adopte-invoicing through a web portal. These solutions have no implementationcosts and very moderate or no ongoing costs to the company.

In addition to the basic service setup costs, companies will need to considerintegration costs. Examples o these costs include integrating with theircustomers invoice handling process and integrating their e-invoicing solutionwith internal back-end systems.

The integration setup may require an additional investment, but only theintegrated and automated process can eventually deliver up to 70-90% costreduction compared to a non-integrated e-invoicing solution.

1. Look for substantial savings

An e-invoicing solution should reduce invoicing costs by at least 50%



Ideally, the e-invoicing service provider should oer the company a fexibleservice that covers all options needed to immediately begin e-invoicingmultiple customers. With this type o service, the company no longer needsto maintain the less ecient manual process alongside the new automatedprocess, which obviously would weaken the business case or e-invoicing.

A fexible solution also includes dierent tools or e-invoicing based onthe customers ability to receive and process e-invoices directly into theirhandling system when requested. As customers expect their suppliers tomeet their needs and processes, it is important that the e-invoicing serviceprovider can transmit a wide range o e-invoice ormats, be able to transorma paper invoice into an electronic one and, when needed, to convert ane-invoice into paper and deliver the invoice in the traditional way.

The wide range o e-invoicing options oered by a company can also beconsidered as a sales strength. Our customer Toshiba educates their salesorce about the customer benets that e-invoicing can deliver and decidedto incorporate the e-invoicing capability in all new business proposals andtenders.

When customers are not proactively requesting e-invoices, it can come asa surprise that a company may need to invest time and eort to get thecustomers support or its new invoicing policy and to obtain the necessarye-invoicing addresses rom the customers.

A strategic program is needed and this is where the service providers withthe most comprehensive oering and experience can step in and help.

By contacting the customers on behal o their suppliers and assisting themin adopting the e-invoice processing, service providers enable an easy shit

rom paper-based invoicing to e-invoicing. Customer activation has a quickpayback because an e-invoicing solution is more cost-eective when a largenumber o customers connect to it right rom the beginning.

Whether a company operates globally or locally, an e-invoicing solutionshould be built on top o an open interoperable network. This means thatthe customers can use any connected e-invoicing service provider and thee-invoices will reach them through their selected provider. This works verymuch like mobile network roaming, which allows people to call others despiteusing a dierent mobile network provider.

3. Help your customers in adapting their process to yours

Customer activation is needed to ensure a quick ROI on e-invoicing

4. Ensure solution interoperability

Only an open network enables e-invoicing of your entire customer base

2. Make it a competitive advantage

E-invoicing should improve customer satisfaction



The advantage o an interoperable solution is that it expands a companysconnectivity options beyond one service providers network and deliversmuch more fexibility and eciency or sending electronic invoices to many

customers.

Todays companies have realized that their procurement and nanceunctions need to work more closely together in order to gain control overexpenses and the related purchase-to-pay (P2P) process. This collaborationo procurement and nance means introducing automated processes or both

procurement and invoice handling.

The electronic purchase transactions - such as ordersbased on electronic catalogs and order conrmations- remove delivery and invoicing errors and, whencombined with e-invoicing, provide the customer witha new level o visibility over the company spend.

Customers P2P process automation oten has animmediate impact on their suppliers. In order toachieve the best process eciency, the customerstarts requiring integrated and electroniccollaboration not only to reduce the costs o invoice

processing, but as a way to control procurement andcontract compliance.

It is a win-win situation as the ully automatedprocessing o invoices i.e. the automatic matchingo invoices against the supplier contracts andpurchase orders without any manual intervention- airly quickly generates 70-90% savings to

the customer and ensures timelypayments o the invoices or thesupplier. From a suppliers point oview, this collaboration also produces

a sales advantage. Integration othe customers electronic purchasetransactions can be seen as a partlyautomated sales channel, giving thecompany a clear competitive edgeagainst non-integrated suppliers.

The automated order-to-cash processand the needed integration with bothcustomers Accounts Payable andprocurement processes can be bestachieved with a solution provider thatalso oers solutions or enhancing thecustomers purchase-to-pay process.

5. Think beyond e-invoicing

Customer purchase transactions should be integrated into the order-to-cash cycle

Electronic payment andpurchasing has clear

business benefts.The more you get connected

with your customers, themore likely it is that they

will stay with you.

Klaus- Dieter Leigen

IT manager at Toshiba

We wanted a partner whocould provide outsourced

services and assist notonly our suppliers in

converting paper intoe-invoices, but also our

customers in receiving our

e-invoices directly into theirprocessing systems.

Soile Hiekkasalmi-Linna

Development Manager

at Metso
http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/Metso.aspxhttp://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspx



5. Conclusions

The more the globalization era continues, the more important it will

become or companies to have an ecient invoicing process. Theprocess will need to be ecient both or sales to oreign customers andor internal billing to a companys own subsidiaries across the world.

Future buyer-supplier communication will happen electronically througha single process that integrates the buyers purchase-to-pay chainwith the suppliers order-to-cash cycle. This integrated collaborationstreamlines cash and working capital management on both sidesand along with the process transormation, the electronic businessdocument exchange will eventually ully replace paper.

In 2008, more than 600 million e-invoices were sent in Europe alone.Although initiated in Europe, the globalization o e-invoicing is likelyto proceed rapidly when business extends across borders and whencompanies become more amiliar with the bottom-line benets deliveredby the integrated buyer-supplier collaboration.

Based on the experience o leading adopters o order-to-cashautomation, e-invoicing is the easiest rst step on the road to a ullyautomated order-to-cash process. E-invoicing delivers the astestimprovements, whether the company is targeting cost savings and astercash infows or growing its business.

Electronic invoices streamline the invoicing process, thanks to quick anderrorless invoice processing at the customer end with visibility into theinvoice status at all steps. More importantly, e-invoices drastically cutinvoicing costs, potentially with as much as 70-90% reductions rompaper-based invoicing costs.

Yet, e-invoicing will become a standard business practice only i fexibleand interoperable e-invoicing solutions are available to ensure worldwideadoption by a critical mass o companies.

Finally, companies should dene a broader strategy to go beyonde-invoicing, with the target o automating their entire order-to-cash

cycle and integrating the critical touch points identied in this paperwith their customers purchase-to-pay process. In addition to deliveringup to 90% savings on Accounts Receivable costs, the ully integratedbuyer-supplier collaboration has proved to signicantly increasecustomer satisaction through greater invoice accuracy and compliance.

In light o the nancial and business opportunities enabled by theelectronic exchange o inormation and business documents, it is air tosay that in the modern world there is simply no uture or paper ordersor invoices.

Success storieson electronic

buyer-suppliercollaboration

Plandent, a dental supply

company, oers its large

customers an option to place

electronic orders. Orders are

directed electronically rom

the customers procurement

system to Plandents own system,

ensuring on-time product

deliveries and correct invoices.

Toshiba TEC Germany Imaging

Systems achieved both o these

targets. In addition to seeing an

immediate 75% drop in invoicing

costs, the adoption o e-invoicing

greatly improved the satisaction

o their largest customer. Seen as

a clear sales strength, e-invoicing

is now incorporated into all

new business proposals that

Toshiba TEC Germany Imaging

Systems presents to customers.

Cargotec Corporation decided

to request e-invoices rom its

suppliers as the electronic

invoicing allows their Accounts

Payable team to process the

supplier invoices much more

quickly. The company also

benets rom improved supplier

relationships by meeting the duedates o invoices, even those

with short payment terms.

To nd out more on how

Basware customers have already

successully adopted e-invoices

and streamlined their nance

operations, we invite you to visit

www.basware.com

/Resources/customer_cases
http://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/Plandent.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/resources/customer_caseshttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/resources/customer_caseshttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/resources/customer_caseshttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/resources/customer_caseshttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/Cargotec.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/ToshibaTECGermanyImagingSystemsGmbH.aspxhttp://www.basware.com/elqNow/elqRedir.htm?ref=http://www.basware.com/Resources/customer_cases/Pages/Plandent.aspx


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The Basware name and the Basware logo are trademarks o Basware Corporation.

* All third party trademarks are property o their respective owner.

Basware Corporation

Address: Linnoitustie 2, Cello Building, FIN-Espoo, Finland

Postal address: P.O. Box 97FIN-02601 Espoo, Finland

www.basware.com

Trademarks

Copyright 2010 Basware Corporation.

About Basware

Basware is the global leader in purchase-to-pay solutions with morethan 1,500 customers and 1,000,000 users in over 50 countries aroundthe world. With Basware, organizations can reduce the cost o buyingand paying or goods and services and gain visibility and control o theirentire spending process by automating manual processes, rom sourcing,contract management, purchasing and supplier collaboration to invoiceautomation.

Basware solutions and services enable substantial cost reductions acrossbusinesses and deliver value by providing compliance and control, aswell as ast return on investment. The solutions are distributed andimplemented, either on site or as a service, in Europe, the US, and Asia-Pacic through an extensive network o Basware oces and businesspartners.

www.basware.com

Sources1Cost o Control 2010, Basware Corporation. In corporation with Dr. Markus

Maedler and Dr. Steve Jones, IESE Business School and Indiana University,Kelley School o Business.

2Billentis and Postnance data reported in E-invoicing 2010: European marketguide (European Banking Association and Innopay, 2010)

3E-Invoicing / E-Billing in Europe Taking the next steps towards automated andoptimized processes (Billentis, February 2009)

4E-Invoicing / E-Billing in Europe Taking the next steps towards automated and

optimized processes (Billentis, February 2009)

5

E-Invoicing / E-Billing in Europe Taking the next steps towards automated andoptimized processes (Billentis, February 2009)

6Final Report o the Expert Group on e-Invoicing, DG Internal Market andServices, DG Enterprise and Industry, November 2009.

All o the Basware customer testimonials highlighted in this white paperare publicly available atwww.basware.com/resources.
http://www.basware.com/resourceshttp://www.basware.com/resources

Documents

Faster Payments Happier Customers e Invoicing Best Practice for Accounts Receivable