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The Role of SMEs in E-Invoicing Adoption

Thursday, July 05, 2012

The Role of SMEs in E-invoicing Adoption

It’s no secret that solutions developers tend to gear their new technologies towards large Fortune 1000 companies. After all, large companies have the human and capital resources to make a serious commitment to new technology.

Because of this, the finance departments at small and medium enterprises (SME) are generally left to rely on low or mid-range ERP systems (with less functionality than their large enterprise counterparts), or no ERP system at all.

In turn, when it comes to accounts payable processing, many SMEs are struggling with massive amounts of paper and inefficient manual environments.

But this situation has implications for large companies, as well. Without more SME participation in automated AP processes such as electronic invoicing, the decline in paper-based supplier invoices (which have dropped from 77 percent to 64 percent in the past year) will eventually stop.


So what will it take to get SMEs to migrate to automated AP processes such as e-invoicing?

According to a study conducted by Paystream Advisors and sponsored by Direct Insite, two out of five SMEs cite budget constraints and a lack of ROI as the biggest barriers to going electronic. SMEs also identified ‘gaining supplier adoption of e-invoicing’ and ‘internal change management’ as barriers to electronic invoicing.

The Paystream Advisors study offers a glimmer of hope: 32 percent of SMEs already use front-end imaging, and another 16 percent are hoping to implement the technology in the next 6 months. What’s more, 61 percent of SMEs are making electronic payments, with 14 percent planning to use it in the next 6 months.

These technologies are a great springboard for electronic invoicing. More importantly for SMEs, the business case for electronic invoicing is proven, and with the availability of affordable and easy-to use cloud-based solutions, such as Invoices On-Line from Direct Insite, SMEs don’t need huge upfront capital investments or significant IT resources to get started.

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