The shift toward e-invoicing over the past decade has had a vast impact on how businesses handle financial transactions. With more organizations realizing the benefits of implementing digital invoicing, considerable progress has been made in reducing paper use and increasing business efficiency. Not only has this shift had a strong environmental impact, but it also marks an important step toward sustainable practices of financial handling.
The Shift to E-Invoicing: A Case Study
One of the most insightful case studies of the impact of e-invoicing on paper reduction is that of Siemens, the world-known technology company. Siemens adopted electronic invoicing systems in the early 2010s with the goal of achieving sustainability. One of the key results of such invoicing solutions was the substantial reduction of the paper Siemens used for their invoicing.
In just two years, since the adoption of e-invoicing, Siemens was able to reduce the amount of paper they use for invoicing by a staggering 60%. This significant decline demonstrates the success of the company’s green business practices and the efficiency of their operational processes.
As a result, Siemens is one of the best examples of a company that managed to reduce their ecological impact through the use of e-invoicing. Therefore, Siemens also effectively demonstrated the potential of automated invoicing systems in promoting environmental safety while improving operating processes.
Industry Statistics on E-Invoicing Impact
The statistics provided above clearly illustrate the impact that e-invoicing can have on the reduction of paper use in different industries. The latter further proves that in two years, in 2025, more than 80% of invoices will be processed electronically, accentuating that e-invoicing is the way to reduce paper use.
Environmental Benefits of E-Invoicing
There are at least seven points demonstrating the environmental benefits resulting from the adoption of e-invoicing. These points include the following:
- Reduced paper consumption. Improved e-invoicing technologies allow companies to use minimum paper, if any. Estimates show that a single company can save over 1,000 sheets of paper per employee per year. From the general perspective, Alanizi, Norstrom, Su”dhoff, and “Basacik report that over one-third of all waste generated by businesses is paper.
- Reduced carbon footprint. The production and transportation of paper invoices also contributed to the generation of greenhouse gases. Therefore, by adopting e-invoicing, businesses can also reduce their carbon footprints.
- Less waste generation. In addition to reducing waste associated with paper consumption, businesses generate less waste that might not be recycled. As such, it contributes to developing a closed-loop or circular economy in which virtually everything is reused or recycled.
- Improved workflow. It is worth mentioning that e-invoicing results in automation of the technical process, meaning that businesses no longer need to spend time on printing, scanning, and mailing documents. Instead, they can be simply issued digitally, improving the speed of transaction completion and, therefore, productivity.
- Eco-friendly behavior. It is rather obvious that companies that decide to use e-invoicing are seen as ones that care about the environment, which can be an advantage for attracting customers and investors that hold such views and expect similar behaviors.
- Compliance. Electronic accounting and internet technologies also come with some features that assist companies in being compliant with various accounting and financial regulations, meaning that paperwork is not required.
- Accessibility. Digital invoicing is easily stored and accessed from any place at any time. It is important in terms of reducing waste and generally consumption of additional resources required for managing paper documents.
Growth of E-Invoicing Adoption
Overall, the number of e-invoices is increasing. It is estimated, Alanizi et al. write that by 2026 all organizations are expected to generate 6.7 million invoices amounting to over $4 billion and equal to 74 kilograms of paper. Therefore, over 400 million tons of paper will be saved per year.
Financial Benefits of E-Invoicing
E-invoicing is also a financial benefit, as it might help businesses save money. Many organizations have already saved millions of dollars after switching from traditional paper invoicing to different electronic options that are faster and more convenient.
For example, a multinational consumer goods company, Unilever, that implemented e-invoicing by transitioning to electronic billing reported that the company is now saving over $15 million annually. The company’s financial gains are due to lower costs for printing, mailing, and storing paper invoices. Instead of wasting resources on paper processing, the company now employs financial technology to handle invoicing tasks and shift its expenditures toward innovation and growth.
In fact, financial technology developments promise that by 2025, companies using e-invoicing will benefit from a cost reduction of $20 per invoice processed compared to traditional paper invoice processing.
The Future of E-Invoicing for Business
The future of e-invoicing is even more promising as information technology will continue to evolve, and companies will push even further for optimal efficiency. In particular, the future of e-invoicing is closely linked to the expansion of automation in handling as well as storing invoices. Based on the above discussion, it is likely that the future of e-invoicing will be associated with several general trends:
- Growing Automation
- Technology Integration
- Advanced Analytics
- Improved Security
- Globalization
- Mobile Invoicing Solutions
- Sustainability Metrics
As the phenomenon of e-invoicing continues to develop itself over time, it is clear that more and more companies will choose to transform their activity in order to take advantage of operational efficiency, cost savings, and the positive environmental impact implied by using the method of electronic invoicing. Thus, the shift towards the process of issuing e-invoices is not only a new way of conducting transactions but an innovative approach to financial management and the sustainability of modern organizations.
