Realising the Benefits of e-Invoicing
by Sean Flynn, Business Analyst, Irish Dairy Board
In 2009, IDB made the decision to replace its manual invoicing processes with an automated, cross-border e-Invoicing solution in order to improve cash management efficiency internally, and enhance the interaction with its customers. This article looks at the background to this project and the outcomes that IDB has experienced so far.
Background to the e-Invoicing project
Like many organisations, the IDB produced invoices manually before implementing its e-Invoicing solution. Every day, one of our finance team printed customer orders from our ERP (Lawson) and produced an invoicing batch. These were then printed, hand-folded and posted to customers. From Dublin, we invoiced all of our EU customers, with typically 60-70 invoices produced daily.
We recognised that long-term this was not a feasible arrangement, and could not be scaled to facilitate future growth. The catalyst for reviewing a more automated solution was the challenge of tax compliance requirements in the countries into which we sell. For example, in Spain there is now an obligation to include a digital signature on invoices, which clearly could not be achieved through manual invoice processes. With customers rejecting invoices without a digital signature, we clearly needed to make changes.
In addition, our Accounts Receivable department handled a large volume of customer queries, including lost or delayed invoices, which made it difficult to manage accounts efficiently and professionally, and resulted in slower collection and an increase in debtor days.
Although these challenges made it easy to justify the project internally, our decision to prioritise this area was corroborated by an external consultant who reviewed our financial processes and identified invoicing and customer statements as a target area for improvement. While reviewing our invoicing processes and considering a potential solution, we identified a variety of aims. In particular, we wanted to reduce the cost and increase the speed of invoice production, guarantee delivery to customers, whilst ensuring compliance with relevant tax regulations and enhancing the service we provide.
Reviewing alternative solutions
We reviewed a variety of market-leading e-Invoicing solutions. A key requirement for IDB, which excluded a number of potential solutions, was the ability to produce invoices in both PDF and EDI formats. This was one of the factors that led us to select Sterling e-Invoicing from Sterling Commerce. In addition, Sterling e-Invoicing offered a convenient and intuitive front-end portal that gave both finance and audit users full visibility over invoice processes and documentation, and enabled invoices to be re-signed when necessary. We had an existing relationship with Sterling Commerce which had proved very successful, and we were particularly positive about the high quality of customer service we had received. By implementing Sterling e-Invoicing therefore, we were confident that we could achieve our internal objectives and satisfy our stated goal of exceeding customers’ expectations.