Member Article

New invoicing regulations set to be a step in the right direction

With growing pressure on businesses to cut paper waste, the latest e-invoicing regulations are set to be a step in the right direction argues BancPay’s Francesca Long-Leather.

Despite how easy it is to manage your invoices electronically, there are surprisingly still some companies wasting time and paper with manual processing. The companies reliant on this system are not only damaging the environment but damaging the success of their businesses, especially with recent regulations.

The latest VAT laws and EU regulations are set to encourage the greater use of e-invoicing, removing obstacles and ensuring businesses move forward.

In the UK, new VAT rules are pushing for the full digitisation of companies, encouraging them to become fully electronic by providing electronic invoices to auditors. This is beneficial to businesses of any size, and the tax man. An increase in automation will speed up business processes such as tax payment, for both the company sending, and the government receiving. E-invoicing ensures easy and efficient auditing.

Speed is the key benefit of electronic over paper invoicing. Paper invoices create significantly more legwork and lower productivity. They are not only easy to lose track of, but require paying for postage, and are reliant on the efficiency of mail delivery. The invoice must be created, put into an envelope, a stamp paid for and sometimes even that dreaded trip to the post office. This process is not only expensive but takes time, reduces productivity and is a complete waste of paper. E-invoicing on the other hand, reduces costs and administration as invoices can be received and paid immediately and paper saved.

The European Commission is mandating e-invoicing across the EU. In some countries including Spain, Greece and Denmark this has already been carried out. The mandating of e-invoicing in the UK will immediately provide countless benefits to business in terms of efficiency and reducing our paper wastage.

It is clear that e-invoicing reduces costs, dramatically increasing cash flow. The sooner a business can send out invoices, the quicker they can be paid. Research by Gartner has shown that e-invoicing can be 10 times cheaper than paper, with businesses able to recoup the costs within a year.

Just in the UK public sector, £2bn could be saved by adopting e-invoicing across the board, with more liberal estimates suggesting this could rise to £4 or £6bn. A recent study carried out by PwC argues that if e-invoicing was adopted across public sectors worldwide, €3.7 trillion in excess working capital could be released. The green argument is strong, however, for businesses, money talks. A businesses bottom line is everything, and e-invoicing will help to increase this.

With the recognition of e-invoicing among the power houses of India, Brazil and Russia, e-invoicing as standard is critical in order to maintain trade links with the world’s economic powerhouses. By 2016 all of the EU’s public procurement will be carried out electronically, setting the precedent for the rest of Europe.

Some companies are yet to fully understand e-invoicing, therefore government regulations and laws which encourage its wider use will bring significant benefits to business productivity across the board. The benefits are significant, both for businesses themselves and the environment. The latest regulations are set to be the final nail in the coffin for paper invoicing, putting this slow unsustainable practice into the history books.

By Francesca Long-Leather, Product Marketing, BancTec

About BancPay

BancPay is an intelligent cloud invoicing service for organisations to manage their invoices in any format quickly and securely in the cloud. It can help improve cash flow, speed up approval, reduces invoicing errors and overheads. BancPay is free to join and easy to use for both large and small organisations.

This was posted in Bdaily's Members' News section by BancTec .