These days, it seems like everyone has a different perspective as to what an e-invoice really is. According to the Cambridge Dictionary, an e-invoice is "an invoice that is sent electronically over the Internet." Seems pretty straightforward, right?
When is an electronic invoice not a true e-invoice?
E-invoicing, in the early days, involved simply e-mailing a PDF or scanning an image of a paper document. However, these could easily become misplaced as part of a process or could contain errors which resulted in the invoice being rejected and delays.
In the world today, an e-invoice is something that is processed and recorded electronically end-to-end—from the supplier through to the customer—removing the need to deal with paper, keep track of email attachments, or perform manual re-keying of information into a database.
"e-Invoicing is faster, easier, more precise and saves both Balfour Beatty and our suppliers administrative hassle [by] standardising the format invoices are received in, meaning that they can be processed more quickly and with fewer errors and delays, rendering redundant the time and costs associated with other ways of invoicing, ensuring prompt payment of our invoices."
Leo Quinn, CEO, Balfour Beatty
How does a true e-invoice get processed?
Using a solution like Tradex, the construction world's largest connected supply chain network and e-invoicing platform, many of the processes that were previously handled manually by Accounts Payable departments are automated, allowing AP clerks to focus more on value add activities. The sequence is typically as follows:
- A supplier generates the invoice and any supporting document and sends it to Tradex.
- Tradex receives the documents instantaneously and validates the invoice. This validation could include checking for a valid PO number, a correct PO/GRN value, or any other value you can describe.
- If anything is incorrect or missing, the invoice isn’t accepted and Tradex passes it directly back to the supplier to correct. In recent times this has really helped organisations around prompt payment as it means they aren’t liable for an incorrect invoice and the payment clock hasn’t started ticking.
- If everything is correct on the invoice, Tradex then pushes that straight into the customer's finance system removing the need for anybody to key the invoice in.
- If required, Tradex also has an approval workflow which can be used if the invoice needs to be pass to the correct person for approval.
- Once the invoice is approved internally, payment information is sent to Tradex for a supplier to view. This then stops the supplier calling or emailing for updates.
Tradex also allows the supplier to reconcile their own statements to ensure all of their invoices have been received. This again takes the onus off your team and lets them focus on what will really make a difference to your organisation.
How do I get started with e-invoicing?
You've come to the right place! Tradex's e-invoicing software enables organisations in the construction industry to trade electronically through a scalable and flexible integration hub that supports multiple document types and procurement processes.
The ultimate benefit of straight-through processing of invoices becomes a reality when invoices are automatically checked in Tradex against orders and receipts and then entered directly into the finance or ERP system without anyone involved. You can be assured that the data is accurate, and your supplier will be able to monitor the status of any invoices in real time, reducing enquiries that take up clerk time on both sides.
Get a personalised demo of Tradex today.