The CFO’s To-Do: Increase the Share of E-Invoices in Your Company

In the blog series The CFO’s To-Do, we explore common challenges and issues CFOs face with invoice management. We also provide practical solutions to address them. Efficient invoice processing is essential to maintaining healthy cash flow and seamless operations. In this post, we explain why reducing the number of PDF invoices and increasing the share of e-invoices is a smart move—and how to achieve it.

The CFO’s Challenge

Most CFOs strive for a digital accounts payable process where automation plays a central role. It’s a logical ambition, but several obstacles can stand in the way. Surprisingly, one such challenge is the prevalence of PDF invoices, which we’ll focus on in this post.

For many accounts payable departments, the volume of incoming PDF invoices remains steady—or higher than desired.

Is this even a challenge at all?

Yes, it can be. Time spent on administration and the costs associated with handling PDF invoices contradict the goal of digital and automated workflows.

Fortunately, there’s a way to reduce the number of PDF invoices and increase the volume of electronic invoices (e-invoices), which better aligns with the needs of a modern accounts payable function.

Let’s take a step back and examine the core challenges. PDF invoices remain a staple in many finance departments, but this practice comes with notable challenges:

• Increased risk of errors
  Manual entry or Optical Character Recognition (OCR) scanning of PDF invoices introduces risks, including data misinterpretation, duplicate payments, or payment delays.
• Higher time consumption
  Processing PDF invoices, mainly manually, requires significant time and effort. This includes reviewing for errors and entering data into ERP systems. There can also be ongoing manual maintenance of invoice templates when changes occur in your own or your suppliers’ setup. Yet another time-consuming task.
• Higher costs
  As these steps highlight, handling PDF invoices is resource-intensive, making it more expensive compared to fully digital and automated processes. It is expensive to scan a PDF invoice, especially if the scanning needs to be done at the line-item level.

CFOs, therefore, face the pressing question:

How can we achieve a higher level of e-invoicing to reduce costs and minimize the errors tied to processing PDF invoices?

The CFO’s Considerations

At first glance, it seems simple. Ask suppliers to send more e-invoices. But the reality is more complex. Typical considerations include:

• Supplier communication
  Who should contact suppliers to encourage them to switch to e-invoicing? Should Lizzie or Paul from accounts payable contact each supplier individually via email or phone? Would forming a dedicated project team be necessary? Or would it be more effective to leverage external resources or specialized tools?
• Follow-up
  What happens when suppliers respond? If you send emails to many suppliers, you might face an overwhelming response. Some suppliers may agree to send e-invoices; others might need persuasion or guidance. Managing this process manually can quickly become a daunting task. And what about monitoring in the future? Who will handle that?

Without a clear strategy, this initiative risks being buried under administrative tasks, preventing the full benefits of e-invoicing from being realized.

The CFO’s Solution

A targeted approach and the right tools are essential to increasing the share of e-invoices. Tools, in particular, are critical to taking a significant step toward an e-invoice-first accounts payable process.

Our solution, InvoiceFirewall, includes a supplier communication module designed to address this exact challenge. It can automatically identify whether a supplier can send e-invoices, based on whether the supplier has sent e-invoices to other customers. If a supplier capable of sending e-invoices submits a PDF invoice instead, the system can automatically (if desired) send an email requesting that future invoices be sent as e-invoices.

One of our customers, Enemærke & Petersen, has high expectations for this feature. Many of our clients have seen a significant increase in e-invoicing rates, resulting in fewer PDF invoices and reduced costs associated with OCR tools.

Pro Tip: Communicate Benefits to Suppliers

When asking suppliers to switch to e-invoices, emphasize the advantages for them: faster payments, fewer errors, and a more straightforward process.

Stay tuned for next month’s post in the CFO’s To-Do series.

Author

Anders, our Sales Director, has his finger on the pulse of all the challenges organizations face related to invoice processing.