In Finland, such dreams have been turned into reality. In this Nordic country, electronic invoicing -- a process that allows companies to bill one another via the Internet -- is growing to become the norm, with about 8 percent of the country's 200 million invoices sent annually in digital rather than paper format.
Driving the growing uptake of eInvoicing is a standard called Finvoice (short for "financial invoice"), which was launched in mid-2003 under the leadership of the Finnish Bankers' Association, giving the technology the backing of most of the country's banks, including Nordea, Sampo and Osuuspankki.
Time savings help reduce costs
"It's just a faster, easier and more secure way to make payments, compared to paper," explains Kari Korpela, the eBusiness project manager with Technology Centre Kareltek Inc., an organisation that promotes new business activity in southeast Finland and is a supporter of initiatives like Finvoice.
It's a description that Raimo Naatsaari, vice president and head of eBusiness, Finland with Nordea, agrees with. "But we are not just changing from paper to electronic," Naatsaari says. "It's much more than that. It's about streamlining the way the process is done."
Streamlining is an understatement. Research done by Kareltek shows that the cost of a paper invoice to both parties in the process is about EUR40. With 200 million invoices flying around the country each year, business to business billing is a EUR8 billion nationwide expense, one that could be cut in half if eInvoicing became the rule. And some of those savings could come as soon as early 2006, when penetration of electronic invoicing is expected to reach 50 percent.
While eInvoicing is not entirely new, until now the practice has only been a realistic option for large corporations that in most cases have hired service provides to handle the process, Naatsaari says. But Finvoice departs from this by offering eInvoicing through its highly secure Internet banking channel, which is already used by nearly 100 percent of Finnish companies, making Finvoice just another option that can be added to a firm's eBanking service, regardless of the size of the business.
In larger firms, Finvoice can be incorporated into enterprise resource planning software or other bookkeeping applications, and in theory, larger firms could in fact automate all invoicing, except "unusual" payments that could be set to require manual approval. "Yes, you have to do your homework before you can get that far," says Naatsaari, "But it's doable, it's defiantly doable, and it's not that hard."
Naatsaari claims that having an electronic invoicing network that is open to all companies, big and small, is important because it offers the potential to streamline processes for all businesses -- not just bigger organisations that accept electronic invoices from partners who have the IT infrastructure to handle such processes.
Importantly, Finvoice is expandable and Naatsaari says that Finland's banks are looking to add features like ordering along with invoicing, as well as business to consumer (B2C) invoicing and electronic-to-paper invoice delivery. All variations offer the same benefit -- lower cost for the buyer and seller and lower-stress bookkeeping.
Other countries have also recognised the benefits of helping their SMEs eliminate the costs of paper invoicing systems, and we understand the Finns have had active discussions about helping to introduce a similar system to Slovenia. It may be that Ireland should also consider seeking Finnish help in this area.