What You Should Know About eInvoice Solutions
Digital tools like Zoom, e-learning, and telehealth gained a lot of steam during the pandemic. And we’ll continue to rely upon them well into the future because they help us get every day things done, all online.
Same with eInvoice solutions, which let AP teams receive pre-coded, ready-for-processing electronic invoices right in their AP automation solution. Nexus data shows the volume of invoices submitted through eInvoice and NexusConnect (a self-service supplier portal) increased 101% from March 2020 to December 2021, compared to a 64% increase between May 2018 to February 2020. Here’s more to know about eInvoicing and why it’s here for the long haul.
How eInvoice and NexusConnect Supplier Portal Usage Increased During the Pandemic
What are eInvoice solutions?
An eInvoice solution exchanges invoices between buyer and supplier electronically using predefined, structured data. It’s typically an invoice submission option available through an AP automation company. And it can accelerate the invoice approval process significantly.
Suppliers using eInvoicing can submit large volumes of invoices via application programming interfaces (APIs) - directly to their clients’ accounts payable automation solution. From there, buyers can review the invoices, which arrive with the data needed for invoice processing, such as invoice number, property code, invoice total, and other fields. eInvoicing can also generate an invoice image, if not already provided by the supplier.
Per Nexus data, Nexus customers who receive eInvoices process invoices extraordinarily quickly. In fact, eInvoices are approved and processed for payment in about 3 days.
A word on what an eInvoice isn’t
Since eInvoicing stands for electronic invoicing, it can be conflated with other things. Sending an invoice as a .pdf or .jpg attachment over email – or sending it to a dedicated AP email address - doesn’t count as eInvoicing. Nor does sending unstructured HTML invoices. In these scenarios, an AP employee still needs to extract data from the file and upload to their system before it can be processed.
What do buyers gain from eInvoice solutions?
Since clients receive ready-to-go invoices directly in their invoice processing solution, they can promptly review invoices, route them through approval workflows, and approve them for payment. No more opening envelopes, scanning documents, or additional data entry – which are time-consuming and can lead to errors. This helps speed up procure-to-pay cycles and ensures goods and services can flow uninterrupted.
Besides increasing productivity and enabling seamless procurement, eInvoicing provides additional benefits for buyers:
- Reduced risk of fraud - invoices are less likely to fall into the wrong hands since they’re transmitted electronically and directly to the correct place.
- Improved supplier relationships – suppliers can receive faster payments since their invoices are received and processed more quickly.
- Enablement for future growth – AP teams can handle more invoices over time since invoice processing is more efficient and there’s a lower exception rate.
- Less back-and-forth with suppliers – because of the increased accuracy that comes with eInvoices, AP teams can spend less time clarifying things with suppliers.
How do suppliers benefit from eInvoicing?
With eInvoicing, suppliers save time submitting invoices since they can usually submit one file for all their customers (buyers) simultaneously. Here are some other ways suppliers benefit from eInvoicing solutions:
- Faster payments and more reliable cash flow – faster invoice approval can lead to faster payments, which help suppliers improve cash flow.
- Improved visibility – suppliers receive confirmation of invoice delivery and, in many cases (like with Nexus), can track invoice status online.
- Reduced costs – suppliers can cut expenditures associated with printing, storing, processing, and delivering paper invoices.
- Improved customer relationships – suppliers can build goodwill among buyers by issuing eInvoices, since they’re preferred by many buyers.
Setting up eInvoice
Much of the setup for eInvoice happens on the supplier side and, in many cases, they’re happy to do it. After all, when they can submit customer invoices quickly and easily, it can increase order frequency.
Suppliers can typically set up eInovicing by using instructions provided by the buyer’s AP automation provider. eInvoice files can then be submitted in a variety of different formats such as XML, cXML, and JSON. With some eInvoicing services, suppliers can transmit custom fields and line-item details on invoices, as well as control how tax is applied.
As with everyone, AP teams were forced to re-imagine how they performed everyday tasks during the pandemic. And they had to figure out how to do more with less.
EInvoicing offered them a way to do so. First, they didn’t need to be in the office to open and ingest invoices. They could receive them electronically, and start the approval process immediately. This was especially important for Real Estate AP departments. Their hundreds or thousands of invoices continued to stream in, needing processing, just as they did prior to March 2020.
Second, AP employees receiving eInvoices didn’t need to go back and forth with suppliers on incorrect or incomplete invoices. Since they were often down team members, this was a welcome relief.
Lastly, eInvoicing added additional security at a time when fraudsters were capitalizing on the chaotic global situation. Companies using eInvoice solutions didn’t have to worry about bad actors gaining access to invoices and then creating duplicates or claiming non-payment.
eInvoicing lets AP teams expedite invoice processing, among many other things
Given these facts about eInvoice solutions, it’s no surprise they had a moment during the pandemic. And, as the future of work continues to evolve, the need to work more efficiently, accurately, and securely isn’t going away. So, it’s probably safe to say eInvoicing isn’t either.