Small and medium size businesses (SME’s) are an important part of the economy. Within the EU they account for 99.8% of all businesses, 67% of all employment and 57% of added value (Eurostat). In terms of invoicing, SME’s are party to over 50% of all invoices. If electronic invoicing is ever going to take off, the SME’s need to be on board.
On Wednesday September 9th, I attended the Dutch conference E-invoicing for SME’s (E-factureren voor het MKB). The event was sponsored by two Dutch Ministries with the intent to hear about the concerns of SME’s and to give them practical advice on how to tackle e-invoicing.
What is clear is that, for now, e-invoicing is making life difficult for SME’s, not easier.
Part of the reason for their difficulties is related to their conception of e-invoicing and the first steps towards implementation. Most SME’s seem to perceive e-invoicing as merely PDF’s exchanged through the e-mail. What is more, most focus on sending them out. As the conference chairman Friso de Jong put it, they “chuck it over the fence and hope the recipient doesn’t squeal” (my translation).
What became evident is that the recipient SME’s aren’t happy with receiving the PDF at all! They now have to save the PDF in a digital archive, meaning they now have two archives to maintain. Others print the PDF, add a date stamp and signatures and some then scan it back in. One SME received the invoices and then had to manually forward it to three different people to receive the necessary approval before it would be processed.
No wonder several exasperated SME’s said they definitely prefer paper invoices to PDF’s.
Three dilemmas of e-invoicing
These accounts reveal three major dilemmas that need to be resolved.
First, SME’s expect a simple e-invoicing product, perhaps something they can download and install and which is fully interoperable. They are really not looking for a technical challenge. Many SME’s seem to perceive e-invoicing as a technical solution, but when that fails most SME’s have little idea about what to do next. They have heard about e-invoicing and the benefits it purportedly brings, but now what? How to start e-invoicing?
This is where the second problem comes in, the organization’s processes, structure and employees need to be ready to invoice electronically. As one SME put it, “Automatiseren begint met organiseren” (“automating starts with organizing”, my translation).
Thirdly, it is really the incoming side for SME’s that’s needs to be addressed. The real added value is when SME’s are able to electronically process incoming invoices. This saves hours of retyping and shuffling paper around the office and SME’s are likely willing to pay to realize these savings. Why not make sending e-invoices free and charge only for receiving full electronic invoicing.
Where to start e-invoicing?
In one of the conference workshops, a list of questions was shown that a business should answer before starting to e-invoice. These include:
- Are my customers/suppliers ready? And what’s in it for them?
- How will I e-invoice? What format, what standard?
- Should I hire a service provider? If so, who, what will it cost, and what repercussions will it have for my business and my e-archive if I decide to leave them in a few years time?
- What changes should I make in my IT system?
- What changes should I make in my internal procedures?
- Is my accountant ready?
- Are my employees ready?
- Is management motivated to see this through? How can I motivate them?
These are precisely the type of questions we at Innopay can help you answer. We have developed an e-Invoicing Health Check to help you on your way. Feel free to contact us if you have any questions.
Tags: E-invoicing, E-readiness, SME
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