Thursday, April 23, 2009

SAP and e-Invoicing - The Value of Time and Money

There has been an interesting trend this quarter with companies looking to implement e-invoicing initiatives. In the past, when companies considered converting paper-based invoices to electronic invoices they sought to reduce the costs of manually processing both inbound and outbound paper invoices. The reductions companies were looking for were usually the followings:
  • Reduced paper costs

  • Reduced printing costs

  • Reduced handling costs

  • Reduced postal costs

  • Reduced DSO - (days sales outstanding) with outbound e-Invoicing

  • Reduced payment processing costs

  • Reduced data entry costs (entering payment information from paper)

  • Reduced data entry errors

  • Reduced billing disputes

  • Reduced paper storage
Lately, we have seen the following goals added to the above list:

  • ensure compliance with regional tax regulations

  • simplify the process and reduce the complexity and high costs of supporting e-invoicing globally

  • focus internal employees on core business processes, not global EDI compliance
These additions relate to confidence, peace of mind, focus and risk management. It seems that companies are increasing the priority of these issues. I believe that reduced budgets, less staff, and challenging market conditions have forced these issues to the fore front.

These issues are not easily solved internally with today's budgets. I am seeing an increased interest from companies to outsource e-Invoicing initiatives to e-Invoicing experts that operate managed services companies that focus on this area.

It appears that companies are closely evaluating each process and internal department to better understand if the services required and provided can be more cost effectively and efficiently supplied externally by subject matter experts. When there is less staff the value of each member to the company is likely to increase. Companies will want to focus these valuable members on the most productive and strategic projects and initiatives. They can not afford to assign expensive and valuable staff members to routine or non-core projects. For this reason, global e-invoicing seems to be an in-demand service for managed services providers.

SAP users have an advantage in this area. SAP is the co-owner of a managed services company called Crossgate that provides global e-Invoicing services for SAP users utilizing SAP's Netweaver platform.

Multi-national companies that must support e-Invoicing in many different geographies must find ways to ensure compliance with all of the various tax authorities. South America, Mexico and EMEA are very different from each other. Companies must either staff up to support these areas and requirements or find an expert to provide these services.
  • Brown Forman, the USA's largest distributor of spirits and wines, describes how they addressed these issues in this article.
  • SAP is working with OpenText and Crossgate to provide solutions and managed services for helping companies deal with global e-invoicing requirements as discussed in this article.
  • Many countries around the world have evolving requirements for e-Invoicing like the new requirements in Mexico which are described in this article.


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