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An e-invoice is an invoice that is issued, received and processed electronically. It is digital from the beginning, which means it is electronic, or “e”, throughout its life cycle.

E-invoicing enables a company to fully automate their invoice processing, and sets up the stage for straight through processing for the entire order-to-cash process. As a result, buyers, suppliers and other managers recognize several operational and strategic benefits. In addition to cost savings, the ability to automate the invoicing process and integrate with other business systems provides business efficiency and revenue generating opportunities.

Some companies send PDF copies of invoices via e-mail. These can be scanned or printed out on paper and thereafter registered in the ledger. Invoices received in e-mail or paper format introduce unnecessary costs and complexities into the AP process. For invoices received via mail, the documents must be sorted, routed, opened, sometimes scanned, and keyed into an AP system. For invoices received via e-mail, the documents must be saved, stored and depending on the process in place, potentially printed and keyed if no front-end imaging or automatic data extraction technology is in place.

Many AP groups perform validations, checks and balances on the invoice before processing for payment. These validations consist of making sure the supplier is in good standing, the vendor name and number match. They want to make sure the terms accurately match the registered vendor master. They also want to make sure that if it’s a PO based invoice that the appropriate PO information is attached to, or showing on the invoice.

When processing electronic invoices, AP and finance groups can use commonly available business process management (BPM) services and platforms, as well as OCR and data capture technologies. This lets them perform validations automatically that would otherwise require manual processes and data entry by unnecessary workers.

For the supplier organization, their document or e-mail based invoices always require more time to become visible in the AP system. Document and e-mail based invoices have a much higher probability of being lost in the approval process. Without any visibility into invoices that are currently in the approval process, financial managers lack the comprehensive data necessary for strategic business forecasting.

A sizeable, impactful invoice, which surprises people in the treasury organization could result in a huge cash deficit relative to forecast. By processing invoices electronically, all upcoming payments become immediately visible to the finance group in the accounting system — which obviously improves forecast abilities and accuracy.

Another key issue Globys sees all the time with groups about to go through the digital transformation process; suppliers are challenged to reconcile the payments they receive from customers with the original invoices that were submitted.

To simplify account reconciliation for suppliers, buyers should send electronic remittance advice in conjunction with a payment that provides a detailed account of the invoices paid.

There are many more benefits to both the supplier/AR and buyer/AP from transitioning the invoicing and invoice payment processing from a paper or email based system to a true electronic invoice order-to-cash process.

See the main Globys video to learn more, or visit our product pages to read about our various Straight-Through-Processing solutions.