Anna Tujunen, Chief Product Officer of Dooap, joins us to discuss:
- What is e-invoicing?
- Global adoption of e-invoicing
- Benefits to implementing
- Who e-invoicing is for
Brent Hametner (00:00):
This is episode four of the AP Automazing podcast where we talk about all things accounts payable automation. Hi everyone. This is Brent Hametner your host for the AP Automazing podcast. Today I'm happy to be joined by Anna Tujunen, Chief Product Officer at Dooap, an accounts payable automation company based in Austin, Texas that works specifically with companies using Microsoft dynamics 365 AX 2012/FO. Ana, thanks for joining us.
Anna Tujunen (00:34):
Thanks for having me.
Brent Hametner (00:36):
So the topic of today's conversation is on E invoicing, and I'd like to start first with just understanding what e-invoicing is. Of course it's electronic invoices, but I'm wondering what the difference is from an e-invoice versus an invoice that's just sent via email.
Anna Tujunen (00:56):
Yes. A common misbelief is that a PDF invoice is an e-invoice. A PDF might be part of an invoice and it definitely can be the visualization of it, but the invoice part is the automation of the data that is in the invoice. So it is not an e-invoice if you have to scan or capture or do any effort like use OCR in extracting the data from the invoice. A true e-invoice means that the vendor is sending the invoice information in a structured format that goes directly from their system to your system.
Brent Hametner (01:36):
Gotcha. And I've also read recently that invoices are used more in other regions around the world like Europe, Australia, and Latin America. And I'm just wondering, should U.S. Businesses care about invoicing?
Anna Tujunen (01:52):
Yes, there are a hundred and 52 billion reasons to care. And that's because in federal reserve banks publications, I've read that e-invoices could save up to 150 billion annually in the United States. And from that amount, 266 million is just the U.S. Federal government. So every time you say, where do my tax dollars go to, this is pretty much it. So when talking about the order to cash or procure to pay process, around 75% of us companies, aren't doing all or some part of the process manually. So a physical person is creating invoices, sending them out, receiving printing, scanning or keying them into a system. It can take days, and in the worst case, it ends up in a paper check that is being mailed. This is all very good in the point of view of making jobs for people. But when we're talking about efficiency and reducing the administrative costs of all companies in the U.S., we're now right in the core of the problem. Often we talk about competitiveness of U.S. Businesses in the global economy. And as we cannot raise the prices all the time, the efficiency route is to reduce the costs. Reducing the cost of unnecessary work is worth that previously mentioned 150 billion. So it's the administrative cost in every service or product that has been manufactured in the U S soil. That 150 billion is currently bloating up the manufacturing costs and price tax. And unfortunately, other parts of the world are ahead in this.
Brent Hametner (03:42):
Gotcha. And so what would you say are the other benefits that e-invoicing has compared with other invoice processing methods?
Anna Tujunen (03:51):
The money and time it saves is almost enough, but there are multiple other good sides to it too. So when there is no manual middleman in the process, there is no manual entry errors or wrong interpretations. You get the invoice exactly like the vendor sent it. So if, if there are errors, it's basically the vendor's own fault. And secondly, there is no lost invoices as the invoice is either delivered or not. There will be a technical error and a notification you get, if the invoice should not be delivered.
Brent Hametner (04:28):
Okay. So what type of companies would you say benefit the most from transitioning to e-invoicing and what type of resources are needed to make that transition?
Anna Tujunen (04:40):
Every company benefits, even the ones that have already invested to their private networks. This is a low threshold, a way to get the smaller companies involved too. 25% of U.S. Invoices are already e-invoices. And this usually means EDI invoices, or point to point connections or private islands of business partners. And in practice, it means that you have to be a pretty big company before we can get into that club and enjoy the economics of scale. But in the four corner model, e-invoicing is possible for even the small businesses. As you just sign up with an access point that is ensuring the interoperability among all the other parties in the network. So what we see in Europe and other places that have already implemented this to get started, you just need to basically sign up. And the access point pretty much takes care of the rest. First of all, though, in the U.S., we need to get the network up and running. And this is the best time to act as there is already a proof of concept project ongoing where it is being built, and the project is utilizing all the best practices from around the world and that are already in use. And this work is run by the business payments coalition, which is orchestrated by the federal reserve bank. So all volunteers are welcome to join the project.
Brent Hametner (06:11):
Awesome. Awesome. Well, thanks for this information Anna. And thanks again for joining us. This concludes episode four of AP Automazing on E invoicing. If you'd like to learn more about Dooap, visit www.dooap.com. Thanks everyone!
*transcript has been edited to increase accessibility