In recent years, a wealth of public and private sector organizations have made the change to e-invoicing solutions, laying to rest the old days of paper filing systems that put so much strain on the average accounts payable and receivable department. As the world becomes more digitized and interconnected, it only makes sense that national payment systems make the change alongside consumers, businesses and governments, and this has already started to have a positive impact on cash flow for many.
E-invoicing comes with a variety of benefits, some of which are entirely internal to a given company while the others are a bit more outward-facing, with the latter comprised of eco-friendliness initiatives that lead to a stronger brand stature in the eyes of current and prospective clientele. With organizations working to reach the highest levels of performance and efficiency possible – especially given the immense challenges following the Great Recession – automated software has stepped in as a medication of sorts.
Automated tools can have profound impacts on business process management, as well as the efficiency of workflow oversight, so long as enterprise decision-makers are working to align the chosen solutions with specific objectives and needs. E-invoicing has been such a strong first choice because virtually every organization can benefit from a more streamlined approach to accounts payable and receivable, as well as one that is entirely digitized.
Economies will continue to become more interwoven and digital, and those organizations which fail to step into the modern era of payment processing, workflow management and, perhaps most importantly, accounting and reporting will fail to enjoy the full breadth of revenue-driving potential contained therein. Luckily, the software and other automation tools are becoming a bit more affordable with the passing of each year, opening the gates for wider ranges of businesses.
First, a notable problem
Business Insider recently reported that one of the more significant issues in corporate cash flow that often flies under the radar remains a problem for many organizations, and that the use of more advanced tools might be the best next step forward. According to the news provider, the United States has roughly $2 trillion in late payments at any given time, with many firms failing to quickly receive compensation for services and products delivered to businesses and consumers.
Imagine a company that has roughly 10 percent of its annual revenue outstanding in bills, and that this is caused at least partially by the use of traditional accounts payable and receivable methodologies. This can place immense strain on projects, strategies, cash flow and more, as businesses will not be as free to make moves on necessary provisioning programs since they are waiting for the money to come in first.
With a relatively affordable and straightforward solution such as e-invoicing, these concerns can be quickly avoided, boosting the fluidity of operations. Business Insider noted that the solutions used to streamline and expedite accounts payable have already experienced monumental growth.
Finextra recently reported that Mexico, which launched an e-invoicing program earlier this year, has already seen significant financial improvements as a result, with officials there stating that a wealth of management procedures have been optimized thanks to these technologies. This is another benefit of e-invoicing that perhaps transcends the speedy recovery of payments, in that companies will not have to put as much time or as many resources into these processes.
According to the news provider, the Mexican government has been happiest about the ability to streamline auditing procedures come tax season, which has worked to recover a wealth of outstanding payments that were missed by consumers and businesses. Profit increases of 34 percent were recorded by the government, the source noted, further highlighting just how big of an impact automated tools and more advanced e-invoicing solutions can have.
"Auditing actions are based on monitoring by electronic invoicing systems of taxpayers," tax auditing expert Alvaro Cordon affirmed, according to Finextra. "[SAT] verifies that taxpayers are fulfilling their obligations, that each taxpayer is issuing an electronic invoice and SAT knows who issued it and for whom."
The news provider went on to note that e-invoicing is required for businesses that have a certain level of revenues each year, and that the programs are likely to be expanded in Mexico and elsewhere as time goes on.
At the end of the day, the goal is to become more efficient when the opportunities arise, and business leaders should recognize the value of a variety of automation tools in this regard. Optimal accounts payable and receivable performance can have a profound impact on the average business, while this is just scratching the surface when it comes to the breadth of automation tools now readily available in the market today.