These days, in the financial process automation space, the term "E-invoicing" is thrown around with little attention to detail. Much like the buzzword of the last year, "Blockchain", a lot of people have jumped on the hype without fully understanding the meaning of the word.
Defining E-invoicing
If you've been boasting and bragging to your supplier base that you support E-invoicing, but in reality, all you have done is set up a generic accounts payable email address for invoices to come in and then you sort them by hand (or god forbid print them out and type them back into your ERP, then E-invoicing is not what you have achieved. ln fact, according to gov.uk their definition of E-invoicing is as follows:
"This is where suppliers can electronically submit and track invoices. It's not just allowing suppliers to email them an invoice." - gov.uk*
The most commonly used definition is that e-invoicing is the exchange of an electronic invoice document between a supplier and a buyer.
Electronic Invoicing and invoice submission
Electronic submission of invoices usually utilises your generic AP email inbox, received directly from the supplier's ERP system and is quickly (and cheaply!) collected into your business. This is usually where the invoice then goes dark and suppliers wait with bated breath until the balance of the invoice appears in their accounts. This is when tracking comes into play.
Electronic Tracking of lnvoices
When it comes to a supplier electronically tracking an invoice, this is usually done through a supplier portal. A supplier portal's key benefits are to deal with all supplier queries, for instance "Have you got my invoice?" and supplier statements.
Through a supplier portal, a supplier can see whatever information about the current status of an invoice you would like them to see. For example, usually they can see when it has been received, processed, and paid, however you could theoretically go into as much detail as whom the invoice is waiting for approval from, and what the deadline is for the next payment run. As l'm sure you can tell, there's a happy medium of which information you should share with your suppliers to elicit a positive response from bath suppliers and your finance team.
When a supplier portal is paired with an email capture system, automatically reading the invoice and submitting the information for approval before replicating into the ERP, this is true E-invoicing, and drastically minimises the manual intervention of the accounts payable process.
*lnside individual "Duty to Report Payment Practices reports".
