The Road Ahead for e-Invoicing in the U.S.

How the U.S. Federal Reserve Bank’s Electronic Invoice Technical Standards Catalog can help your business

The economic landscape has changed dramatically over the last six months. At the end of 2017, consumer confidence was running at a 17-year high. The job market was strong, having risen for eighty-six consecutive months. However, more recently, the Stock Market has experienced some volatility and confidence has dipped. Expected turbulence, you might say, but if you’re running a business, it’s probably a good time to look at driving efficiencies in your invoice and payment processes.

That’s easy to say Roger, but I don’t get involved in the detail; where do I start and where can I find some unbiased information to help me, and my team, with our investigation, analysis and decision-making process?

Well, the good news is that late last year, the U.S. Federal Reserve published a document – the Catalog of Electronic Invoice Technical Standards (on the website) for companies like yours. The catalog is designed to help businesses understand some of the challenges of e-invoice processing. Not only creating awareness of e-invoicing; but highlighting where it can help in the payments process.

A common standard?

The catalog lays the foundations for an invoice standard to accelerate the adoption of electronic invoicing by U.S. businesses. The document is tremendously comprehensive and details the size of the challenge in the U.S – thanks, in part, to the large number of electronic invoice technical standards that already exist. Interestingly, the Federal Reserve appears open to learning from Europe’s ‘mistakes’ too.

One of the major challenges that Europe suffered with its own e-invoicing initiatives was the proliferation of different standards and requirements across individual EU member states – this hampered engagement and the adoption of common standards involved in sending and receiving electronic invoices. The catalog explains that there are over 250 e-invoice service providers who operate in the U.S. market and that they create, send, and receive more than 15 different e-invoice formats with more than forty plus different subsets. So, you can see the challenge. Here is a review of different electronic invoicing methods.

Is it any wonder that businesses have avoided automating their e-invoice receipt and payment processes given this proliferation of formats and subsets? Where should you start? Which format should you choose? Where do you invest your time? And what lessons have been learnt?

In my view, the U.S. must avoid the problems that Europe suffered implementing their e-invoice initiatives if it wants to succeed. Europe’s e-invoice legislation restricted liquidity in the market and my colleague, David Cocks, wrote a great article explaining one major challenge Europe still struggles with – the need for e-signatures.

The interesting fact is that although many organizations use EDI as their preferred, secure method of business-to-business communications, across Europe there are some EDI implementations that use e-signatures, but there are also many that do not.

The US must try to avoid the interoperability, integration, and adoption issues, crystalized by e-signatures, that hampered European Union initiatives; it is vital that the US identifies a unifying, open e-invoicing technical standard, that spans all sizes of businesses and all industry segments, then success will follow.

Interoperability is key

Interoperability will be key to any initiative, but what are US organizations currently doing to get the data into their back-office systems?

Agile organizations have automated many of their processes to be paid on time. Indeed, the Paystream Advisors. 2016 Data Capture and Mailroom Technology Insight Report stated that nearly 92 percent of invoices received electronically are paid on time compared to only 45 percent when invoices are received in paper form that need to be entered into the AP or accounting system by the buyer.

So, why wouldn’t you want to automate the process, especially when you consider that, according to the Federal Reserve, only 25% of US invoices are currently electronic. There is a huge opportunity for efficiency and payment gains, but the challenge is in the underlying processes involved in getting the data into the systems, not the systems themselves.

What exactly could this standard look like? Will it be a PEPPOL type initiative currently underway in Europe or should the U.S. start afresh? One of the biggest benefits of the PEPPOL service is that an organization can have a single connection to the outside world, by which they can trade with current and future suppliers across Europe.

More importantly, the supplier only needs one connection (or access point) to the PEPPOL network to reach all the other PEPPOL-connected trading partners for e-ordering, electronic invoicing, electronic credit notes and advance shipping notifications. Once a business is on the PEPPOL network it’s a win-win for suppliers too, with them only having to maintain one connection to the PEPPOL network for both inbound and outbound documents. Could this type of standard work in the U.S.?

What else does the U.S. Federal Reserve’s Electronic Invoice Technical Standards Catalog tell us?

Alongside exposing several aims, the catalog is a great document for any organisation looking for general information on e-invoicing to help them map out their strategy. It provides a summary of the Procure to Pay (P2P) and Order to Cash (O2C) processes, the electronic invoice process and includes some technical standards by Syntax – it’s a great starting place for anyone with an interest in e-invoicing and how they should be approaching it.

Finally, the purpose of the Catalog of Electronic Invoice Technical Standards in the U.S. is to educate and lay the foundation for the U.S. market on selecting an invoice standard to accelerate the adoption of electronic invoicing by U.S. businesses –  it’s a great document if you’re looking for information or considering creating efficiencies in your current inbound invoice processes


  • At the end of 2017 CNN Money reported that ‘With a booming economy Consumer confidence hit 122.1 in December, slightly below the 17-year high set in November 128.6, according to the Conference Board’s index released Wednesday’.
  • “Despite the decline in confidence, consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement
  • Confidence has been fueled by a few factors: The job market, the stock market rally and Republicans’ fiscal reforms.
  • The U.S. job market is very strong. Unemployment in America is at 4.1%, the lowest level since 2000. Job openings are abundant too. The U.S. economy has gained jobs for 86 consecutive months, the longest streak in history, according to Labor Department figures going back to 1939. Balanced growth in the global economy has supported some U.S. hiring in 2017

Roger Hatfield is VP of Sales for CloudTrade in North America.

How CloudTrade’s solution works

CloudTrade’s patent-protected software uses unique rules-based technology with backward tracking search, to interpret, validate, and extrapolate semantic meaning from documents of any type. So, whether its invoices, sales and purchase orders or advanced shipping notices, CloudTrade processes them automatically and cost effectively.

Although CloudTrade offers suppliers several ways to send their electronic invoice (including direct XML / EDI), by far the most popular approach is for a supplier to simply send an application generated PDF via email.  When an application generates a PDF, in almost all instances it will be a text PDF. CloudTrade reads the document text straight from the PDF without the use of OCR – which guarantees 100% quality.  PDF invoicing is easy to use and out-of-the-box with most accounting packages. As a result, typically >90% of suppliers (irrespective of shape or size!) when asked will send PDF invoices.

About CloudTrade

CloudTrade is one of the fastest growing e-invoice and e-document networks, connecting over 150 organizations to thousands of their trading partners electronically across numerous sectors and regions across the globe. Founded in 2010 to offer a fresh approach to e-invoicing, CloudTrade enables companies to evolve past their reliance on paper and trade electronically with their suppliers, irrespective of size or technical maturity. CloudTrade’s unique, patented technology, delivers services not widely seen in the market, in a cost-effective way. CloudTrade’s software is protected by lasting patents in Europe, the U.S. and Australia. For further information go to: or contact Nick Jones; 07832 115362, [email protected].