B2B e-invoicing becomes mandatory in Belgium and Germany
Following in the footsteps of Italy, France and Poland, among others, Belgium and Germany now want to make e-invoicing mandatory....
Compliance in purchase to pay
Say what you do and do what you say
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Profit and integrity are sometimes at odds. Acting with integrity often costs time and money. Even in procurement and accounts payable. But for the longer term, "saying what you do and doing what you say" can work profitably. Digital transformation offers a helping hand by exposing processes.
Content
Trend Report
Digital Transformation of Finance & Procurement 2024
Whereas digital transformation was previously mainly something for pioneers and daredevils, anno 2024 it is an absolute must-have for every organization. Challenges such as rising costs and staff shortages are forcing organizations to look for ways to work more efficiently. Automation plays a crucial role in this.
Maverick buying
We see this in the procurement process as well. Indirect spend by no means always falls under management. Often there is no harm in it. There is haste. The costs are marginal. And the supplier's web shop is already open. The invoice is then for later concern. That's how we think about it.
Sometimes the supplier is not even known to the company, let alone screened for "good behavior," for example. And the administration mainly receives invoices with no purchase order attached or not connected to a payment plan.
The aforementioned trend report shows that 25% of procurement professionals consider this so-called "maverick buying" problematic. In Finance, the figure is 50%. In addition to being a problem, some of the professionals also feel that too little is being done about it.
- Read more about maverick spend
- Download the white paper Spend under Management
Turning a blind eye
How principled must you be when all parties are better off if an eye is turned? Or does this set a precedent? For example, what do you do with an invoice that seems to deviate slightly from what was ordered? After all, correcting is hassle and time-consuming for all parties.
For example, we at ICreative are not surprised when at our clients 97 percent of invoices with a discrepancy between 0 and 40 euros are approved without communication with the supplier and without a request for credit.
But if the tolerances are increased, 100 percent instead of 97 percent will be processed automatically. We will then miss 3 percent being wrongly approved. This seems disadvantageous, of course, but as a result some 7,000 invoices will no longer have to be corrected and reviewed manually. If we calculate that people spend an average of at least 15 minutes per failed invoice, this saves 1,750 hours of work.
With simple measurement and dashboarding, the matching process can be exposed and continuously optimized.
So turning a blind eye need not be a bad thing if no one is harmed by it.
- Read more about tolerances for deviations
A better world
At the end of the day, that's what it's all about. We want to be a better company. For ourselves and for society. As a digital transformation partner for the purchase-to-pay functions at corporates and ambitious enterprises, we are naturally working towards something good.
Of course, we express an invoice in processing costs and with an agile optimization approach and with integral automation of purchasing and accounts payable, we try to reduce processing costs significantly.
But we can also express a bill in terms of ecological footprint. As carbon emission equivalents, for example. We say what we do, we do what we say, and we do good for society with it.
- Read more about the carbon footprint
What does a compliant purchase-to-pay process look like?
Compliance plays a major role in the purchase-to-pay process. From requesting purchase orders to paying invoices; one must comply not only with laws and regulations, but also with internal procedures and policies. What does a compliant purchase to pay process look like? And how can automation help be compliant?
- Read about the compliant purchase to pay process
Taxes
Businesses are part of a society whose interests are looked after by a government. The government makes policy and enforces it. Take as an example the obligation for businesses to pay VAT on the sales they make.
This does not always go well. In 2019, EU member states lost an estimated €134 billion in VAT revenue. By comparison, the EU budget that year was just under €166 billion.
The VAT gap, or the difference between the VAT that governments should collect based on business transactions taking place in their countries and what they actually collect, has several causes: VAT fraud and evasion, bankruptcies and financial insolvency, as well as miscalculations and administrative errors.
Clearance model
Governments hope to close the gap by entering Continuous Transaction Controls (CTC), of which the clearance model is the best-known form. More and more countries are switching to a form of CTC, including in Europe. Italy was first across the bridge, but meanwhile France, Belgium, Spain, Latvia, Slovakia, Slovenia and Romania also have advanced plans.
This has direct consequences for companies operating in these countries. In the Netherlands, the possibilities are currently being examined and weighed against each other. The move to e-invoicing is necessary in this regard.
- Read more about the clearance model
- Read more about e-invoicing
Foremen order products in a central purchasing platform. Budget holders approve orders, after which a PO is created.
Invoices from all vendors are automatically coded and approved based on the PO, payment plan and/or receipt.
All order and invoice flows become transparent for the benefit of process optimization, reporting, cash flow management, supplier management and compliance.
