The forced use of electronic invoicing by governments in Latin America has undoubtedly achieved the objectives of eradicating tax evasion and the sale of illicit products. For instance, more than 800,000 registered tax payers in Brazil have sent over 4.5 billion electronic invoices. The general advantages comprise:
- Once the system is modified to export digital information from the received document, businesses no longer need to type invoices, minimising the requirement to hire someone specifically for this work and also lowering the likelihood of having typos and errors.
- Cost savings for printing
- Promotion of online shopping and the use of new technologies
- Cost savings from storage once documents are stored as digital data
- Annual reduction in tax evasion of billions of dollars owing to adoption of electronic invoices
According to the data, we can even go beyond the general advantages because the following business processes have specifically advanced:
- Benefits for Receivables – Customers anticipate receiving these electronic bills since they need them to balance their taxes. End users, especially consumers, are motivated to request an electronic invoice, so there are fewer missing or incorrect bills, which causes the days sales outstanding to decrease.
- Benefits for Accounts Payable – In these nations, businesses can streamline their payables process. Companies can benefit from this standardisation because the government requires the invoice format. Many of our clients are using our eInvoicing Dashboards, which automatically assess the invoice’s legality and compare it to any supporting business papers like the purchase order or goods receipt. The payables department may now concentrate entirely on the exceptions thanks to this.
- Logistics (Receiving) – An organisation can benefit from a single scan/click receiving process because the invoice must be printed and placed on the truck prior to your supplier releasing the truck, and because the supplier will typically make that XML Invoice available to you prior to the truck arriving.
- Cash management – This will be the following significant benefit as a result of the enforcement of both the outgoing AR invoice and the inbound AP invoices. Treasurers are always looking for more accurate ways to see their cash balances. As the government standardises the flow of invoices, supply chain financing will expand for supplier bases. These measures from Petrobras in Brazil, which is collaborating with regional banks to inject more than 3 billion Real into its supplier base for working capital financing through 2014, have previously been made public.