AP automation for Government transactions
Large enterprises are not the only ones enjoying the benefits of a digital solution. Electronic invoicing is showing potential in the government sector as well. Automating processes enables higher transparency and visibility of payments, which in turn allows better control and vigilance on possible frauds. Brazil, Chile, and Mexico, the pioneers in the adoption of e-Invoicing in Latin America (LATAM), made electronic invoicing obligatory for all B2B transactions way back in 2014 to improve tax compliance. Mexico alone improved tax revenues by about 34% after the move.
The success seen in LATAM encouraged European countries to follow suit. In 2014, the European Parliament and Council made it mandatory for all EU member countries to implement e-invoicing in public administration between 2018 and 2020. The European Commission calculated potential savings of nearly €2.3 billion with the adoption of e-invoicing.
Asia-Pacific is also now witnessing a surge in e-invoicing, with India and China processing 79.3% and 62.8% transactions, respectively, using e-invoicing. In India, e-invoicing is mandatory for businesses with a turnover of Rs500 crore or more. From April 2021, all B2B transactions are expected to come under the fold of e-invoicing.
While government policies acted as a catalyst for the adoption of e-invoicing in the above cases, private players nevertheless have been agile in integrating new technologies and solutions. Clients and partners are also demanding a higher degree of automation, which is spurring organisations to experiment and innovate. Automated and cloud-based e-invoicing solutions are thus a move towards the future of payments, keeping pace with the rapidly changing market dynamics. It’s the competitive edge of a New Normal.