Enabling secure, seamless e-invoicing

While the smartphone revolutionised digital communications for consumers, many enterprises remain stuck in the old world when it comes to the everyday exchange of invoices and related documentation.

According to global industry analyst Billentis, about 550 billion invoices are exchanged annually and this number is expected to quadruple by 2035. But currently, only about 10 per cent of invoices are exchanged in a truly digital manner, with most sent as a PDF attached to an email or via snail mail.

Enterprises have two compelling reasons to adopt e-invoicing and go down the digitalised path.

One reason is that in many cases they simply will be required to: more than 70 countries have current or upcoming e-invoicing mandates to some degree, including France, Spain, China, Japan and Malaysia.

A host of other countries are looking at going down the same path, many starting with business-to-government transactions.

Here, the Australian Taxation Office is overseeing the local leg of Peppol, a non-profit member-led association that enables standardised and secure digital exchange of procurement documents.

The second motive is hip-pocket related: businesses can glean enormous efficiencies with e-invoicing enablement, with the ATO estimating that e-invoicing could save the Australian economy $28 billion over 10 years.

One organisation striving to help enterprises achieve such savings is Pagero, a unique business technology provider that enables the digital exchange of invoices and other B2B (business-to-business) documents between buyers’ and sellers’ financial systems.

By digitalising B2B transactions, Pagero helps organisations overcome the problems created by poor quality of data and removes the inefficiencies and complexities associated with time-consuming and repetitive tasks.

Pagero has more than 80,000 customers across 140 countries including healthcare giants, mining organisations and banking institutions.

“For a long time, businesses have traded in a way that is manual and quite inefficient, compared to how everyday citizens communicate with smartphones,” says Bertrand Gauch, Pagero’s regional manager for Australia and New Zealand.

Gauch says digitalising cumbersome B2B finance processes can result in cost savings of 60 to 80 per cent – and in a short implementation time frame.

As a rule of thumb, he says, a standard organisation using manual processes would struggle to process more than 9000 invoices per accounts payable employee, per year. In comparison, a streamlined digitalised organisation will process in the order of 25,000 per full-time employee.

“Many organisations struggle to put the time into ensuring supplier invoices are correct, leading to issues such as overpayments, late payment penalties and limited ability to harness data for analytics and strategic decision making.”

Gauch says that these issues can be easily eliminated once buyers and suppliers are able to exchange accurate data 100 per cent of the time, system to system. This is exactly what Pagero brings to its customers, driving significant benefits for organisations dealing with complex finance and supply chain processes.

The only conduit of its type in the world, Pagero plays in the fields of both ‘purchase-to-pay’ and ‘order-to-cash’, subsets of which are the accounts payable and receivable functions.

“In essence, we enable seamless and accurate exchange of operational trading documents between buyers and suppliers,” Gauch says.

Gauch stresses that Pagero’s platform acts as the hub between the companies’ existing enterprise resource planning (ERP) systems. Thus, the platform is enhancing – rather than disrupting – the financial systems companies already have.

“Some digital transformation projects take a year or two; we are bringing a fully operational solution in six to 12 weeks,” he says.

The platform also helps suppliers who might be less advanced down the digitalisation path. A tangible benefit for small businesses is that they are getting paid nine days faster on average.

“Ultimately, we are supporting the buyer and supplier equally with the lowest threshold solution for both parties.”

At a time of heightened concerns about fraud and cybercrime, Pagero users can be comforted that all exchanges across the network are always encrypted.

“This makes the process much safer as opposed to sending/receiving emails, which can potentially transit through unsecured mail exchange servers, which can be easily hacked,” Gauch says.

“We have made significant investments to ensure our security standards are of the highest calibre and we are subject to stringent penetration testing and ISO [International Organisation for Standardisation] certifications.”

Pagero’s global CEO, Bengt Nilsson, says it is expected 80 per cent of companies in the world by 2025 will have some form of e-invoicing requirement. “Businesses face a wide range of pain points on the operational side of things that we are solving today,” he says.

Gauch adds that Pagero works with any organisation anywhere in the world, regardless of their financial systems.