Lirka Bibezic (BNP Paribas Cash Management): E-Invoicing - Revolutionising Treasury in the Digital Age
Lirka Bibezic, Global Head of Product Management - Receivables, As e-invoicing sweeps across the global business landscape, it is not just changing how companies bill each other – it is transforming the very fabric of corporate treasury. This digital revolution, driven by government mandates and a quest for greater efficiency, presents both challenges and opportunities for businesses of all sizes, especially multinational corporations (MNCs).
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The Global E-Invoicing Tidal Wave
E-invoicing is no longer a far-off concept – it is here, and it is rapidly becoming mandatory worldwide. While regulations promoting e-invoicing can be traced back to 2014, particularly in Latin American countries, we are now seeing truly global adoption. Initially focused on business-to-government (B2G) billing, governments are expanding their attention to business-to-business (B2B) invoicing, spurred by the large-scale digitalisation triggered by the Covid-19 pandemic. The European Union's VAT in the Digital Age (ViDA) proposal stands out as a potential game-changer. This initiative aims to harmonise fragmented local e-invoicing regulations and create cross-border interoperability for B2B e-invoicing within the EU by 2030. However, given national sensitivities around tax policies and collection, global standardisation of e-invoicing rules is unlikely in the near future.
Unlocking Treasury's Potential with E-Invoicing
Despite the challenges posed by a fragmented global landscape, e-invoicing offers significant benefits for corporate treasurers. It enhances cash flow visibility by speeding up invoicing and payment processes. The accurate, visible, and timely data intrinsic to e-invoicing supports more effective credit and liquidity risk analysis. Time saved from manual processing allows for more efficient investment analysis and portfolio management. Perhaps most importantly, the availability of granular, quality payment and invoicing data can enhance creditworthiness and potentially lower financing costs.
The Path Forward: Collaboration and Adaptation
Many organisations have dedicated e-invoicing projects that often overlook treasury departments. This is a missed opportunity. Treasurers need to be more actively involved in e-invoicing implementation to fully leverage its benefits. To successfully navigate this digital transformation, starting with a detailed data mapping of invoicing operations is recommended. This process can be time-consuming, especially for large organisations, so it is crucial to begin early. Banks also have a vital role to play in this transition. At BNP Paribas, we are leveraging our extensive regulatory intelligence and robust security measures to assist clients in navigating the complex e-invoicing landscape. We are committed to protecting sensitive information using the highest ISO security standards and a strict cloud strategy. Looking ahead, there is potential for unifying the currently distinct worlds of payments and invoicing. The ongoing global migration of payments processing to XML format, coupled with the creation of a common payments language through initiatives like ISO 20022, could revolutionise how businesses handle both payments and invoices. E-invoicing is more than just a trend – it is the future of financial operations. By embracing this change and working closely with their banking partners, treasurers can position their organisations to thrive in this new digital era.