Driven by the developments in internet connectivity, technology and cloud-based systems, need for electronic form of invoices and purchase orders has grown multifold. One of the main triggers for this, is the growth of several internet industries and the resultant increase in digital transactions. In fact, the e-commerce industry, has evolved into a $2.3 trillion industry, making it one of the largest contributors to digital commerce and fintech adoption.
With digital transformation comes the matter of operations. While operations and finance are interlinked, their workflows exist in isolation. Existing ERP systems are primarily built for a single enterprise workflow, leading to most of this data lying fragmented across these enterprises, hindering the seamless processing of payment cycles. Moreover, this also prevents companies from gaining access to important insights on their business.
Invoicing processing, which is an important facet of business growth, is still laborious in nature and most often requires significant human intervention. Both large and small enterprises face this challenge and need to adopt better technology solutions such as blockchain, to ensure accurate, timely and standardized management of transactions.
How e-invoicing can reduce risk in financial transactions
Taking into consideration the complexity of invoicing in an era of real-time updates, the opportunity for fraud has escalated. The order of the day is to find a solution that requires minimum human intervention, where invoices can be exchanged & verified by machines.
There are many factors to take into consideration while adopting an e-invoicing system into the structure of an organisation. Internally, it is important that all stakeholders are in agreement, as sharing of invoices is just one part of the problem. In a conventional organisation, any invoice will have to get approvals from various departments such as logistics, operations, quality control, etc. even as it communicates with the third-party vendor. E-invoicing not only brings down the number of steps in the process, but also the overall cost. Introducing a blockchain platform could bring down the cost of handling the entire process of invoicing by around 70%.
The other, equally important aspect to consider is the authenticity of the document which can be cleared now with a simple digital signature to standardize compliance procedures. With jurisdictions shifting their focus to more transparent systems of vetting tax declarations and customs, e-invoicing will soon become a mandate that will provide a view into company data.
Source : BW BUSINESSWORLD