Companies increasingly opting for electronic invoicing

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Belgian companies leading the way in Europe

Brussels, 26 April 2012 – According to the CFO Barometer, a survey taken at the initiative of CFO Magazine and EY from a representative sample of Belgian CFOs in medium-sized and large corporations, 36% of Belgian companies are already using electronic invoicing today. In addition, another 35% will be implementing electronic invoicing within the coming two years. The fact is that the new European rules on e-invoicing in any case are providing a boost to making the VAT guidelines more flexible in the required systems and electronic formats. An important challenge for companies remains, however, persuading customers and suppliers of the mutual benefits of electronic invoicing. 

Electronic invoicing on the rise
It had been suspected for some time that electronic invoicing was on the rise, and this was recently confirmed in a survey conducted by EY in collaboration with CFO Magazine. Moreover, the recent CFO Barometer indicates that Belgium is among the best in class on this point. 36% of Belgian companies make use of electronic invoicing, while the European average is between 20 and 30%. The barometer shows that Belgian companies choose electronic invoicing for three reasons: greater efficiency, lower costs, and finally, a reduced ecological footprint. Marc Joostens, partner with EY, who heads the Centre of Excellence for e-invoicing within EMEIA, explains: “companies think further than pure cost-savings based on a crisis situation. Their approach is much more positive, and aims at improving and automating processes. Furthermore, increased control of the invoicing process and more efficient archiving clearly also play a role in the choice for electronic invoicing.”

Smart businesses... opt for electronic invoicing
“Nevertheless, the return on investment in electronic invoicing is an important issue for the ‘figures-focused' CFO”, says Sarah Heuninck, editor in chief of CFO Magazine. One fourth of companies interviewed indicate that the investment in electronic invoicing pays off quite quickly. The time horizon for the return on investment of course depends on the context, but it appears to be generally possible to realize a ROI for e-invoicing within 3 years, and in some cases even within a year. On the other hand, it is surprising that nearly 31% of interviewed CFOs admit to not knowing whether the investment has already been repaid in the meantime. A well thought-out and systematic approach by the CFO appears to be essential here. “Often the total picture is lost from view, and we see a somewhat fragmented approach that results in major delays in the analysis and implementation of electronic invoicing. Those who approach the transition in a well thought out way, generally see the benefits quickly”, says Marc Joostens.

Sarah Heuninck: “Admittedly, it is not always easy to calculate the ROI in practice. While it might be relatively simple in the case of customer invoices, ROI is more difficult to calculate for supplier invoices since various analyses must be made.” This perhaps also explains the relative differences in the application of electronic invoicing: of the companies that use electronic invoicing, 72.1% do so for their customer invoicing, and only 58.1% for their supplier invoicing.

Does the new European directive mean a breakthrough?
The European Union has long wanted to encourage electronic invoicing, but the existing regulations stood in the way. Companies, for example, found it difficult to maintain an overview of the many and sometimes rigid requirements in an international context. A new directive, which must be transposed into law by 1 January 2013, creates a new framework that is much more flexible and that should eliminate a number of doubts. Marc Joostens in any case considers the new directive “a potential new incentive for the definitive breakthrough of electronic invoicing ... on the condition that member states do not interpret the directive in their own way.”

Furthermore, much will also depend on the good relations between companies and the tax authorities. In this respect, companies must see to it that solid internal processes and controls are in place to guarantee the authenticity, the integrity and the readability of the invoices. Thus, each company – with or without external assistance – is responsible for mapping out the entire invoicing process. In the case of audits by the tax administration, each company must be able to demonstrate that such invoices were not issued fictitiously, eg on the basis of documentation of the invoicing and archiving process. The CFO Barometer indicates that 35.4% of companies in any case are increasing their certitude by making use of an external advisor to examine the VAT compliance of their electronic invoicing process.

Customers and suppliers on the same wavelength? 
One of the fundamental factors determining the success of an e-invoicing project is the level of acceptance by customers and/or suppliers of the new invoicing process. This represents a significant challenge for companies. The survey in fact reveals that customers and suppliers often have cold feet regarding the change. The confidence of suppliers appears to be greater than that of customers, but both parties fear among others that VAT recuperation could be endangered due to a possible lack of VAT compliance. Marc Joostens points to the importance of communication: “open and timely communication with your external party is essential. They must receive a good overview of the process, and thus be put at ease concerning VAT compliance.” Finally, the CFO Barometer also shows that it is important that the process to be followed is well planned, and that all within the company are involved from the start. Only if the entire organization believes in the project, will electronic invoicing be a success.

About the CFO Barometer
The CFO Barometer is an independent research initiative of the editorial staff of CFO magazine in partnership with EY. A survey is taken monthly from a representative sample of approximately two hundred Belgian CFOs from medium-sized to large multinational corporations concerning a current CFO issue. The focus of the CFO Barometer is local. This makes the results very representative for the Belgian market, and the CFO Barometer a good benchmarking tool for the CFO active in Belgium.

All the results of the CFO Barometer are also available on the tablet version of CFO Magazine and at www.cfobarometer.be

About EY
EY is a global leader in assurance & audit, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.

About Financial Media
Financial Media is the sole independent multimedia publisher of knowledge and expertise for finance managers. The organization is strongly embedded in the financial departments of medium-sized and large companies, and in the larger not-for-profit/public organizations. With its publication CFO Magazine, Financial Media reaches not only the CFOs of these companies, but also their most important colleagues such as controllers, treasury executives, credit managers, accountants etc… An independent survey indicates that each issue of CFO Magazine is read by an average of 4.3 readers within the same company. Alongside the traditional printed edition of CFO Magazine, Financial Media also maintains a tablet kiosk where in addition to the interactive CFO Magazine, other content is also published.

In addition to CFO Magazine, Financial Media especially focuses on the development of diverse substantive events and training courses. Financial Media continually develops new events depending on the knowledge needs of CFOs and their employees, and with a view toward the issues they are facing. With its combination of CFO Magazine, CFO E-zine (reaching over 8,000 finance professionals), CFO Barometer, the tablet application and publications, the website, a range of (sub)community events and training courses, Financial Media is the leading supplier of knowledge and expertise for finance managers.