Basware: Over Half of Global Businesses Still Constrained by Paper-Based Invoice Processes

STAMFORD, Conn.--(BUSINESS WIRE)--Fifty-three percent of businesses still scan and capture physical invoices in-house, with a quarter not scanning invoices at all, and PDFs continue to be relied upon to send and receive invoices, according to the results of the annual Global E-Invoicing Study from Basware the leading provider of e-invoicing and purchase-to-pay solutions.

“E-invoicing adoption is on the rise but as this survey shows, many companies are still relying on manual processes”

The second annual global study, which surveyed 908 finance professionals from the U.S., UK, Sweden, Norway, Germany and Finland, was conducted by Basware and the Institute of Financial Operations (IFO). The 2012 Global E-Invoicing Study is a benchmarking study of the e-invoicing practices by businesses of all sizes in key markets, the rates of adoption and the degree to which electronic invoicing is being used by organizations.

The study found that 81 percent of invoices are scanned for invoice processing, yet only 26 percent of enterprises outsource the scanning of purchase invoices into electronic format, with the number as low as 11percent among SMEs. This presents a large burden on any size business to complete the scan and capture of physical invoices, as it requires internal resources to manually scan the information and input the data or files into the system; this delays the invoice process and hinders cash flow visibility. The volume of paper printing is also relatively high – 69 percent of businesses print invoices in-house. Those using more sophisticated systems (sending XML e-invoices, using point-to-point connections, third-party web service or portal) are more likely to outsource printing services (30 percent); only 8 percent do not print invoices.

PDFs continue to be the most common format for ‘electronic’ invoices (58 percent) and while this is a progression from paper invoices, it shows a large percentage of companies are still a long way from full automation. Unsurprisingly, heavy senders of PDF invoices are heavy receivers. Seventy-nine percent of companies that send out invoices as PDFs receive email invoices in this format, compared to 50 percent of companies that use state billing and automation systems. Yet, businesses with sophisticated systems experienced a number of benefits beyond companies that rely on PDF-based paperless processes: 56 percent of businesses with sophisticated systems experienced a reduction in the cost of invoice processing compared to their counterparts that use PDFs; 38 percent saw a reduction in invoice errors compared to 28 percent using PDF-based processes.

Despite the continued reliance on rudimentary electronic documents and manual processes, the survey found that there has been a reduction in the perceived barriers that prevent the adoption of e-invoicing automation compared to 2011. Supplier resistance to e-invoicing adoption has significantly decreased from 46 percent in 2011 to 26 percent in 2012 as suppliers realize the benefits. Twenty-eight percent of businesses that use sophisticated invoicing systems found it had a positive impact on the relationships with suppliers and customers. There has also been a steady increase in those businesses that use electronic invoicing to some degree in 2012 – 73 percent compared to 59 percent in 2011.

Businesses have an increasingly higher degree of awareness of the benefits of e-invoicing. The perception of the impact e-invoicing has on speeding up invoicing cycles has increased to 75 percent from 72 percent in 2011. The reduction in invoice costs is seen as the second main benefit for 64 percent of respondents (a slight reduction from 71 percent in 2011).

The comparison between smaller-sized businesses and larger enterprises presented some interesting findings. The rate of adoption for e-invoicing is consistent across businesses of any size. Small businesses (less than 100 employees), however, are more likely to see customer demand as a driver for the transition to e-invoicing – 61 percent compared to only 34 percent of businesses with 1000+ employees. However, despite this recognition of customer demand, a large number of SMEs currently do not have the ability to process e-invoices; only 42 percent of SMEs compared to 70 percent of larger enterprises.

The study found that e-invoicing adoption is being driven by an ecosystem effect as more businesses encounter partner, supplier and customer organizations benefiting from e-invoice use, including a reduction in invoice errors and processing costs. The network effect is also contributing to this, since e-invoicing adoption is passed down the value chain from a large customer to a large supplier and consequently the suppliers that work with that business. These factors, combined with legislative changes and e-invoicing mandates by governments, improvements in connectivity solutions and market awareness, combine to not only increase the number of organizations adopting e-invoicing but also the volume of invoices processed. The tipping point of the e-invoicing ecosystem is expected to be 2014/15 when the majority of companies will have moved to sophisticated e-invoicing.

“E-invoicing adoption is on the rise but as this survey shows, many companies are still relying on manual processes,” said Esa Tihilä, CEO, Basware.” The good news is that we are starting to see the results of an ecosystem effect, whereby businesses are adopting e-invoicing as a result of interactions with other partners and suppliers, improvement in connectivity solutions and the network effect, where large customers use of e-invoicing is passed down the value chain. The vast majority of finance professionals surveyed recognize the business benefits e-invoicing can offer to their organization, from very small businesses to large enterprises. We expect to see a continuation of e-invoicing adoption until we reach the tipping point in 2014/15, where sophisticated fully automated systems will be largely commonplace.”

About Basware

Basware is the global leader in cloud based e-invoicing and purchase-to-pay solutions with more than 1,000,000 users in over 60 countries. Basware’s B2B Cloud solutions and services provide an open, secure and global ecosystem for buyer and supplier collaboration, connecting more than 1.9 million buyers and suppliers globally. The solutions are architected to meet the needs of SMEs and global enterprises and are built upon Basware’s deep knowledge and experience of B2B financial processes, coupled with intelligent cloud connectivity and the Open Network. With Basware, organizations benefit from more efficient procurement, accounts payable and accounts receivable processes, sustainable cost savings, better insight to cash flows and improved buyer-supplier relationships. The solutions are available via the cloud, on-premise or through business process outsourcing in Europe, the U.S., and Asia-Pacific through an extensive network of Basware offices and business partners. The company’s U.S. business, Basware, Inc., is headquartered in Stamford, Conn. More information can be found at www.basware.com.

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