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The New World Without Invoices

InsiderE-invoicingUser ExperienceTrendsUser Interface/CXThought Leadership
Mikko Hytönen

Every now and then, I like to take a step back and see things from a totally different perspective. We operate an AP automation business, making manual and paper-based processes digital. The real question we need to ask ourselves is “do we need invoices at all?”


You might think these musings sound odd coming from a company whose business revolves around invoice processing. However, the most interesting ideas typically hit you when you start thinking how to disrupt your own business. We’ve seen it happen in the past, plenty of times – the pace at which disruption hits different industries, and business models gain momentum at an incomprehensible speed. It will hit us, too. The only question is, when?

Why use invoices?

According to conventional thinking, invoices are an essential part of the payment process and a requirement for suppliers to get paid. However, if you take the thinking further this doesn’t make much sense at all. An invoice is just a historical reflection of a purchase taking place. Purchasing and paying for a good or service matters, not the invoice itself. The only proof of transaction required is the purchase taking place. That’s all we need.

Let’s elaborate further and take a look at our own daily lives – what is it that we do when we buy something? What happens in consumer business will happen in the B2B world, too. We all shop on the internet (and if you don’t, you should really acquaint yourself with this century). When buying something, you pick up the desired products or services and check out your shopping cart. You don’t click a button asking the merchant to send you an invoice. Actually, that would be utterly annoying. You’re done. If you need a proof of transaction for whatever reason, you just get a standard format digital document. Do you care how it looks like? I don’t, at least.

Alright then, is the B2B world that much different? In my mind, it isn’t. We’ve just created a monster – a complex web of transactions where everybody wants to take their share at a cost of the common good. We need to go back to the drawing board and simplify all the processes between the corporate ecosystem players including purchases and payments. I don’t think anybody cares about the invoices. In my opinion, any kind of invoice is a pain, whether it’s for business or my personal life.

Just spend a little while imagining the implications. No more paper, no more lost snail mail, no more data entry, and no more delayed payments as we know them. Imagine, processing a purchase transaction in almost real time. We would have a system I call “invoice mesh” – a platform of platforms connecting all parties.

What about payments? You would pick the payment intermediary or let the system find a suitable one. The beauty of the mesh is it creates an ecosystem of its own. Companies that are able to add value on top of the fully automated transaction business would be the real winners, as well as the clients of these progressive organizations. The system as we know it would be totally disrupted for the better, replaced with something that truly adds value. Game over, old world.

So, are we ready?

The simple answer is, no. Not right now. However, we as a company, and I, personally embrace change and challenge the status quo. I believe it’s our responsibility to think years ahead and not focus on incremental benefits, but rather, true innovation. Right now, it seems to be difficult to agree even on simple things, like electronic invoicing format, which would most likely be the first step in the evolution. Change will take place. I remember in 1996 when I bought my first mobile phone, darn expensive, mind you. My mother would tell me “nobody’s going to use that strange gadget.” That wasn’t too long ago.

The technology is already here. We can overcome the security concerns. We’ve already sub-optimized many parts of the purchase to pay processes. Now it’s time for the big bang. Are we really in love with invoices? I don’t think so.

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About the Author
Mikko Hytönen
, Dooap's CEO, is a seasoned software business veteran with 20 years of experience in the field. He wants to understand how technology changes our lives and the world we live in. Passionate about sports.

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