Businesses has finally realized that the days of paper invoice is over and e-invoicing is here to stay.
If you are in doubt that electronic invoicing is here to stay, you should change your outdated mindset when the 2020 cashless policy begins in January.
The Central Bank of Nigeria in late 2019 announced a new policy to drive the economy to a cashless monetary system. Official news service announced that a leading house building and construction group has chosen Invoicebeta to provide an electronic invoice, CRM, and purchase order system.
The overwhelming logic of getting rid of paper appeals not just to blue-chips, but right down the scale to SMEs and their supply chains.
In an economy long noted for both its volatility, anything which increases the visibility of a company’s cash-flow, and drives efficiencies in businesses, really should be welcomed by business leaders.
As Peter Onyema, a Fellow of the Chartered Institute of Accountants, admits: “The temptation to take on seemingly profitable work is hard to resist.”
He analyses the issue in detail, stressing the critical importance of understanding the cash flow and outflow on every project, as well as the cash required to fund operating overheads.
Maintaining visibility of all your cash flow is much easier of course if you have an electronic invoice processing and payments system.
The benefits of switching from paper invoices to e-invoice are many, including the ability to process more work with few staff, the elimination of rogue spending, and fewer errors, which means less time wasted chasing disputed bills.
Admittedly, the ‘paperless office’ has been slow to catch on, and not just in a sector so notoriously slow to embrace change as construction.
This intriguing piece reveals that the concept was conceived in the 1960s — by IBM’s marketing agency to promote its new mainframe computers — and much more about our long-time love affair with paper.
Now though, the mood even among the sector’s most traditional players has changed dramatically.
COMPANIES MUST TAKE THEIR SUPPLY CHAIN WITH THEM
Peter makes an excellent point that it is crucial for all companies migrating to electronic payment and invoices to take their suppliers with them when their new system is rolled out.
“Within a year of the project starting, 90% of our Accounts Payable suppliers are now submitting electronic invoices,” he said.
Moving from paper to electronic payment and invoice systems also greatly enhances security — a crucial current issue, given the upsurge in mandate fraud, where fake invoices are sent to a construction firm’s clients, asking them to change bank details for subsequent payments. The fast-dwindling minority who think such woes couldn’t happen to them should learn from the latest attacks made upon the main contractor Speller Metcalfe.
However, ditching the paper invoice and migrating to digital doesn’t mean firms can dilute their focus on making sure invoices are correct.
As Peter, points out that digitization alone only leads to bad invoices being delivered faster. A company’s internal processes and systems must always be monitored and fine-tuned from the ground up, rather than purely imposing top-down digital solutions.
For example, his research suggests that one-in-five business invoices still contain overcharges or other exceptions, although e-invoicing does generate solid audit trails which make errors much easier to identify.
Put simply, there are huge benefits in adopting an electronic invoice system, but it’s still only one step in what must be a constant drive to innovate and increase efficiency.
It’s time to ditch the paper invoices and go digital: Effectively manage payment delays with invoicing management software like Invoicebeta.