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When Denmark legislated against paper invoicing in the public sector (including municipalities) back in 2005 service providers (including banks) where not ready with easy solutions for the SMEs. The solution was that enterprises where told to go to the local
post office to have invoices scanned. The state paid the cost.
Many enterprises (worldwide) that have banned paper invoices tell their suppliers to send paper invoices (or e-mails with PDFs) to scanning services often offered by e-invoicing service providers. This is meant to be an interim solution -
when SMEs realize that "Press SEND" makes more sense for all than "Press PRINT" - then this wasteful habit will disappear.
But to get there real fast we need a wide network of generic e-invoicing portals (NOT buyer specific!) - and here naturally banks are needed.
While buyer portals will be buyer-specific, bank portals will also be bank-specific (try selecting the same utility in the bill pay pages of Internet Banking portals of two different banks, and you'll get my drift). Even third-party e-invoicing portals will
inevitably acquire multiple flavors for different billers / banks as they try to boost their adoption. Unfortunately, like e-billing portals that have been around for over a decade for consumer bills without much standardization, I'm afraid generic e-invoicing
is also a pipedream.
By generic e-invoicing portals, I understand that they provide identical user experience regardless of biller, bank or portal. When I read "to get there we need ... ", I thought you were highlighting a major challenge in establishing generic e-invoicing
portals. Perhaps I misunderstood. If you've already achieved success in this area, maybe you could quote a few success stories.
By generic e-invoicing portals we mean e-invoicing services where senders of e-invoices can key in invoices or upload invoice files - and furthermore send it to all receivers (4-corner service provider network essential). NOT having to use buyer specific
portals. And there should be a development toward a common standard for the mass market - to make life easier for invoicing software/cloud service providers.
It is not realistic or necessary "provide identical user experience regardless of biller, bank or portal". That is not the case for e-banking either
When defined that way, I admit that generic e-invoicing portal is not a pipedream and I can think of at least three providers of such solutions, namely, PayPal, TradeShift and Intuit (Full Disclosure: Neither I nor my company have any business relationship
with these companies). At the same time, their mass adoption is faced with several barriers.
From the perspective of buyers/payors, they become non-generic since the processing at their end would differ for e-invoices received from the multiple e-invoicing providers. If I recall correctly, an Intuit PaymentNetwork executive mentioned a couple of
months ago that the challenge is to get buyers/payors to adopt such generic solutions. After all, from their perspective, why won't they like to get all invoices from all suppliers in a single format of their choosing, which appears possible only with a buyer-specific
Let's look at it from the supplier's perspective. For the supplier's C-Suite, I don't there can be any argument that the primary purpose of raising an invoice is to get paid as quickly as possible. Only the buyer whose name is on the invoice is going to
make the payment. If one buyer wants their invoices on paper sent by snail-mail, another wants them as PDFs sent by email and the third one wants them to be published on their e-invoicing portal, it's not such a big deal for the supplier to comply with the
diverse stipulations of the three buyers as long as doing so would expedite receipt of their payment. Therefore, even for a supplier, I fail to see a compelling reason to adopt non-buyer-specific generic e-invoicing portals. While they might cut down some
wasteful effort in the invoicing department, that's negligible compared to the overall effort incurred by the supplier company in servicing the buyer.
Let us put it in simple terms: for any SME it should be possible to send all the invoices in the same way to all customers - with the same service. They do not have time to learn to use different buyer-specific portals.
For buyers it should be possible to receive all invoices into his e-invoice-receiving service - reformatted by the service provider so that the ERP application and the payment initiation gets them into one format.
"From the perspective of buyers/payors, they become non-generic since the processing at their end would differ for e-invoices received from the multiple e-invoicing providers." There is usually a need for using a service provider who can reformat the invoices
received in different formats > then this is generic.
"If I recall correctly, an Intuit PaymentNetwork executive mentioned a couple of months ago that the challenge is to get buyers/payors to adopt such generic solutions." Why difficult - many benefits with using generic solutions - many disadvantages with
using buyer- specific. "
"After all, from their perspective, why won't they like to get all invoices from all suppliers in a single format of their choosing, which appears possible only with a buyer-specific e-invoicing portal?" First of all: bad service to force partners away from
generic solutions - secondly by using service provider the invoices arriving at ERP are in single format (and you cannot really force all customers in your own model).
Think: just like payments with 4-corner model and unified standards. Of course this will be the end-game. Despite some vendors preferring a fragmented world.
We don't need a wide network of generic e-invoicing portals, we just need to use secure e-mail with embedded poayment options.
Why email is the strongest medium for online billing
Email usage continues to increase globally. Although growth rates vary from region to region, this increase goes hand in hand with the increased use of social networking sites such as Facebook, Twitter and LinkedIn. Nielsen published a study which found that
consumers of social media were also the highest consumers of email
Billing portals continue to deliver poor ROI
Web portals can provide a customer with a wealth of information that enables online analysis of billing, payment, historical information such as previous month's bills and self service options. The fundamental problem with accessing this kind of information
online is the initial registration process required, along with the need to enter a username and password each time you visit the portal, one or two portals seem manageable, but once you translate all of your monthly bills to portals you end up with a large
amount of URL's, usernames, passwords and navigations on each site to wade through - not to mention remembering to view these bills each month. This is one of the compelling reasons why companies do not achieve a ROI when trying to convert paper based customers
to portal registrants.
Email delivery drives faster payment
How can this process be simplified, yet still provide value for the customer and how can the supplier drive faster payments and improve cash flow?
Emailing an interactive eBill attachment to a customer and enabling them to view, sort, analyze, query and submit payment from within a secure email attachment is the most simple aand most appreciated option. All required action can be performed from within
the bill, thereby retaining the customers attention and making the call to action i.e. payment, available in one click.
Supporters of portal billing argue that the majority of email sent to inboxes is spam yet they email bill notifications to their users. Recently Symantec released statistics indicating that 92% of email is spam. However spam filters are catching 90% of this
leaving very little in the inbox. As inboxes become more intelligent, as in the case of Gmail's priority inbox, spam email communications are now being pushed to the bottom of the queue. Furthermore, ISP's are continually improving their criteria regulating
what mail is allowed to land in the consumer's inbox, before the inbox even starts it's intelligent (algorithm driven) work.
Increase email reach through social media
Interactivity on marketing communications has continued to increase with the introduction of social media sharing options on these emails. GetResponse's E-mail marketing and social media integration report suggests that this is a worthwhile tactic for increasing
email reach. The study of 500 million emails showed that including three or more social sharing icons increased average click-through rates from 7.2 per cent to 11.2 per cent.
With thanks to Unisys partner Striata
E-mail for invoicing has not been seen as a solution in the Nordics. For consumers and SMEs the most convenient solution is to receive the invoice to the netbank (almost all use e-banking) and then get an SMS notification where you also can approve payment
just by pressing "a". You can also pick invoices for automatic debit - by issuer and by size - and then move back to approving every one when you so prefer. Obvious consolidation direction for SEPA direct debit - if we are at all interested in lowering costs
On the sending side it is important to supply the data elements your customer needs - ie use standards in sending portals supplied by banks and others.
b2b is all about automating accounting, VAT processes, financing etc. see earlier blogs
Rein: "username and password each time you visit the portal, one or two portals seem manageable, but once you translate all of your monthly bills to portals you end up with a large amount of URL's, usernames, passwords and navigations on each site to wade
through - not to mention remembering to view these bills each month. This is one of the compelling reasons why companies do not achieve a ROI when trying to convert paper based customers to portal registrants."
this is the reason why we need generic e-invoicing tools - use one - send to all (just like payments) - but it has to carry rich data - and standardized (just like payments when it comes to discipline - but more fields - just like ISO20022)
All along, I was thinking of a generic e-invoicing portal. Now, thanks to Rein G's comments, I suddenly realize that we are staring at not one, but multiple, portals.
To me, the adoption challenge seems to multiply for the following reasons:
Forking out money is considered as one of the greatest sources of friction, as evidenced by the universal popularity of *FREE* offers. If I as a supplier can reduce some of that friction by agreeing to follow different invoicing process - be it portal or
email or paper - of different buyers/payors, I will gladly do so in order to receive my payment on time.
We are delivering it - and the global movement towards a network of interoperability between service providers is growing by the day. The ISO20022 standard is global, ready and free to use. This is question of will - as always with innovations. Some prefer
to see the difficulties - others the opportunities.
Chairman/Founding member, board member
Transmeri, Demos, Real Time Economy Program,MyData
04 Nov 2008
This post is from a series of posts in the group:
A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.