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Accountis As one of the most established and respected analysts one-invoicing, we
were keen to catch up with Bruno Koch of Billentis
to find out his current thoughts on the European E-invoicing
marketplace. We asked him two sets of questions; the first on corporate
e-invoicing in Europe and the second on e-invoicing opportunities for
banks. Bruno was interviewed exclusively for our e-newsletter EIPP Insights.
Part One: Corporate E-Invoicing in Europe
Question 1: E-invoicing adoption is experiencing rapid growth all
over Europe. Why?
Bruno: The market has become quite mature. Enterprises better
understand the benefits they can have with e-invoicing. Government
initiatives on an EU level and in national markets have improved the
confidence in this innovative channel. In addition, an increasing
number of trading parties do expect that paper invoices will be replaced
by electronic and automated methods. The recent economic crisis was
also an enabler for all projects with the potential to reduce costs and
to improve working capital in businesses. This development is in line
with a rich solution offering for any kind of user demand, regardless of
size or technical ability. As a market analyst for 11 years, it is a
pleasure seeing numerous new user-friendly and efficient market
offerings especially for SMEs. The combination of all these components
is strongly accelerating the market growth.
Question 2: Greece has just mandated the use e-invoicing nationally.
Do you see other EU member states following?
Bruno: I see two groups of countries pushing or mandating the use of
e-invoicing. One group has the aim to reduce their own administrative
cost for all inbound and outbound invoices to and from the public
sector. Their countrywide initiative also has a very positive impact on
increasing awareness and adoption of electronic exchange among the
private sector. The objective of the other group is to increase the
transparency around money streams and their own tax revenues. In this
group are countries with very high external debt, increasing accumulated
deficits and insufficient transparency around the money streams. Greece
is a forerunner. Others in this group are Portugal, Italy, Ireland and
Spain. The e-invoicing projects for the public sector in Italy and Spain
were launched some years ago and are already very advanced in the
implementation process. These countries do it mainly for reducing their
own administrative costs. There are currently no indications that they
would also oblige businesses to exchange invoices electronically outside
the public sector, like Greece. Governments in some countries would
like to supervise businesses in much more detail and near real-time.
Electronic invoices are just one small instrument to achieve this
objective. Other instruments are more efficient for them. In Greece, the
pressure is high enough to use all instruments, including e-invoicing.
Question 3: Why do you think businesses should adopt e-invoicing?
Bruno: Cost savings are still the main driver for adopting
e-invoicing. But there are many other good reasons. Quality improvement
through direct communication and elimination of errors caused by manual
handling is one. Another is efficiency gains through optimized and
automated processes. Businesses can also benefit from better
transparency about working capital and improved cash management
Question 4: What are the specific benefits for SMEs?
Bruno: There are many benefits for SMEs, these include customer
retention – being able to fulfill the expectations of your trading
parties; traceability, safety and certainty about delivery, and faster
payment of invoices to reduce days sales outstanding.
Question 5: If you could give one piece of advice for a corporate
starting an e-invoicing project, what would it be?
Bruno: Do it proactively and immediately! If corporate starts their
own project, they can do it in a controlled manner. It is their decision
when/how and which appropriate solution fits best with their
requirements. If corporates just wait, they have an increased risk of
being pushed into supporting an e-invoicing service defined by a trading
partner.
Question 6: How do you think the e-invoicing landscape will develop
over the next 2 years?
Bruno: The market is developing very dynamically with strong annual
growth rates around 40%. This will very likely also be the situation for
the next 2 years. Half of all enterprises should be somehow affected by
e-invoicing within this period.
Part Two:
E-Invoicing Opportunities for Banks
Question 1: Do you think there is an opportunity for banks to
provide e-invoicing services to their clients?
Bruno: Yes. The e-invoicing market is developing Top-Down. Large
invoice issuers and recipients are increasingly pushing their mid-sized
and smaller trading parties to send and receive invoices just in
electronic format. Large businesses have more individual and complex
requirements regarding ERP integration. That’s why they are typically
using service providers outside the banking community. The 23 million
European SMEs represent the mass-market with demand for standardized and
easy-to-use services. Banks are in an excellent position to address the
SMEs as clients. They can offer an excellent Financial Value Chain for
them.
Question 2: Are you seeing increasing volumes of e-invoices
transacted through banks? If so, can you give some examples?
Bruno: In Europe, banks or service providers controlled by banks,
process only 12-15% of total volume of e-invoices. I see mainly two
reasons that they are lagging behind: a) Banks provide services mainly
to the SME market but this segment is not mature in many countries at
the moment, b) Banks have a tendency to over-investigate and discuss too
much - instead of just doing it. Nordic banks however are different
and they have impressive growth rates in the consumer segment as well as
for SMEs. Forerunners in the consumer segment are the banks in Norway
followed by Sweden. Finnish banks are also ahead in their services to
SMEs.
Question 3: All banks interoperate for payments transactions and
banks also provide interfaces to every SME in Europe. How can this
infrastructure be leveraged to support e-invoicing?
Bruno: Banks have their own mechanisms to guarantee the integrity and
authenticity of electronic messages. The schemes to ensure that this
grew over decades. Unfortunately, today’s bank infrastructure and the
used methods are not yet compliant with most national e-invoicing tax
legislations in Europe. The new EU Directive amendments for equal
treatment of paper and electronic invoices will significantly help the
banks. It will allow service providers to process electronic invoices
similar to payment transactions. But these amendments will be
implemented into most national legislation not before end of 2012 (valid
from January 1st 2013). Until then, banks should prepare the field and
bring themselves into a good position. One part of it is to collaborate
with operators and service providers such as Fundtech.
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