This article is the fourth in a series that looks at how suppliers can successfully navigate these uncertain economic times in the age of coronavirus.
Shelter in place and being locked down indefinitely has presented both challenges and opportunities for many in the age of coronavirus. While it’s easier to have food delivered to your home, it’s more difficult to shed those pounds once gyms and parks closed. From a business perspective, it’s been nearly impossible for organizations that rely on the physical presence of customers to survive. Some consumer goods companies have transitioned to online only sales while many service companies, such as restaurants, endure by offering take out only. Regardless of the situation, most businesses are struggling. The ripple effect of these changes, during such unprecedented times, is its impact on invoice submission.
As companies do everything they can to keep their doors open, a critical issue is whether invoices can be delivered in a timely manner to preserve their cashflow.
Direct impact on different invoicing methods
There is no doubt the coronavirus pandemic has negatively impacted most businesses around the world. As commerce slowed, so did the number of invoices being submitted. The most common invoicing method, submitting paper invoices via mail or courier, has been impacted by the fact that the United States Postal Service (USPS) has seen a significant strain on its operation. Already stretched thin prior to the pandemic, the USPS now faces unprecedented challenges as a result of its thinning workforce coupled with an increase in package delivery. Practicing social distancing and keeping employees safe appear to be at odds with more people taking advantage of home delivery.
Other countries are attempting to maintain normal postal operations, including the UK, Germany and Australia. France, on the other hand, has only 1 in 10 postal branches functioning and are delivering mail only 3 days a week.
Business process outsourcing (BPO) companies, such as Genpact, ADP and EXL Service, must balance their essential services with employee safety. Furthermore, a rather substantial runway is required to prepare some BPO employees to work from home. It’s important to note that transitioning a call center is a completely different endeavor than mitigating the spread of coronavirus by maintaining an invoice scanning service where paper abounds.
Many postal service organizations around the globe are doing their best to maintain normal operations while keeping employees safe. In spite of this, invoice submission via paper is vulnerable to disruption.
Is electronic invoicing the answer?
For companies using electronic invoice submission, the impact has been minimal. It’s true that select rollouts of larger electronic invoicing programs in some countries have been postponed. But, for the most part, e-Invoicing not only continues unabated, in many areas it’s expanding.
Taulia, a San Francisco-based electronic invoicing, supply chain financing and dynamic discounting company, announced on April 16 it was launching Rapid Start Invoicing. This new service enables companies to mitigate disruption by allowing their suppliers to enroll and begin submitting invoices within 7 days.
Billtrust, acknowledging the disruption to international mail service, is empowering its eAdoption team to conduct free assessments and a free initial campaign in order to enable customers to send invoices electronically.
These initiatives by e-Invoicing companies are needed during a time of crisis, but some initiatives have been stalled completely. Vietnam, initially scheduled to implement its mandatory electronic invoicing initiative on November 1, 2020, has postponed the program until July 1, 2022.
What will invoicing look like after Covid-19?
While I don’t believe the current pandemic is the complete end of paper invoicing, e-Invoicing solution providers can seize the opportunity presented by the global lockdown. Combine any delay of mail service with potential BPO disruptions and DSO could increase by days, if not weeks. Truly touchless e-Invoicing, on the other hand, allows for business as usual. Under these circumstances, suppliers can submit invoices, and potentially receive payment, without delay.
It’s likely many supplier organizations will revisit available e-Invoicing solutions once the global economy returns to normal. While no one can predict when and how the next global economic calamity will occur, many companies can ensure their invoice-to-cash process remains intact with e-Invoicing.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. He previously chaired the Vendor Forum of the Federal Reserve Bank of Minneapolis and his resume includes time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific, as well as a number of years as an independent consultant.