You’ve finally made the decision! You’re going to switch over to electronic invoicing. But are you ready to meet all the requirements? These types of changes bring up a lot of questions, like how do I set up an e-invoicing system? Which software should I use? How will it impact my organization? Fluxym takes all the mystery out of the regulatory reform so you can take the leap with total peace of mind.
I’m switching over to e-invoicing. Where do I start?
1. Audit your current system
You need to begin with a status report that answers the question: How does my company process invoices?
List and review the following:
- The volume of incoming and outgoing invoices
- Your file formats (paper, EDI, PDF, etc.)
- Types of customers and suppliers (B2B, B2C, B2G, international)
- Levels of supplier criticality
- Estimated national and international flows
- Percentage of invoices not subject to VAT, etc.
Once you have this status report, you can estimate the volume of invoices affected by the new reform.
Next, map out the invoicing process to get a big picture of all the stakeholders in your company who receive and issue invoices. Then you’ll be able to determine the acquisition and issuing channels, as well as the steps of the process like order-invoice reconciliation, the approval chain, and payment confirmation.
2. Clean up the customer and supplier database
You can only achieve a certain level of data integrity if your repository is routinely updated and cleaned. It will ultimately save you time when setting up electronic invoicing! Be careful: More often than not, information is scattered across multiple information system applications, so make sure to import everything into a centralized repository.
Many different departments in the company generate and use this customer and supplier data:
- Sales
- Purchasing and supply chain
- Finance (accounting, management control, cash flow)
- Internal purchasers (purchase orders, catalogs, etc.)
Therefore, the integrity of customer and supplier data is a very delicate matter that requires targeted actions and dedicated governance.
3. Choose your invoice digitization solution provider
After completing your audit and cleaning up your databases, choose an invoice digitization solution that best meets your operational needs. The solution provider should suggest the right reception and issuing channels for each of your invoice types. It should also know how to adjust management processes for the circuit and the stakeholders.
4. Devise and test out new processes
Setting up an electronic invoicing system is a considerable IT undertaking that should involve all the internal teams. It’s a time-consuming project, so be sure to check the availability of employees and the service provider, and to plan training sessions.
Like with any project, the first step is to determine the technical and functional specifications, and KPIs to monitor:
- Duration and processing of purchase orders
- Processing rate of electronic purchase orders
- Duration and cost of invoice processing
- Invoice exception rate
- Automated reconciliation rate
- Average invoice approval period
- Days payable outstanding (DPO)
- Savings achieved
- Discounts obtained
Next come three phases: design, interface configuration, and revenue.
The last step is the testing phase when you verify that all the invoice digitization solution’s standard functionalities, and the other functionalities the service provider offers, are working as expected, for example:
- Automatic order-invoice reconciliation
- Approval workflows
- Interfaces with the company’s ERP and information systems
Once everything has been tested and approved, then you can roll out the software across the whole company!
How do I implement e-invoicing at my company?
Your employees will have to change the way they work. Switching to electronic invoicing requires a lot of adjustments and training for the teams affected.
These changes will also alter how the customer-supplier relationship is managed. For example, third parties will no longer be able to directly invoice one another.
You could opt to hire a service provider to help ease the transition to these new ways of working. This vendor will help you:
- write a roadmap,
- develop KPIs, and
- manage change internally and externally
Lastly, since the reform focuses on system interoperability, you will have to work with a service provider that can configure the interfaces. It’s still much easier and more secure than doing it in-house!
For a seamless transition to e-invoicing, you need to follow a certain number of steps. Each step helps you put new practices in place and get employees used to applying them. Find out how the experts at Fluxym can help you make the switch.