Electronic Invoicing: What’s in it for banks?

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12 August 2009

I am currently running a research project on e-invoicing across Europe, U.S.A., and Asia. The key areas of my investigation are:

·Volumes of paper and electronic invoices exchanged in the regions

·The role of the Public Administrations in pushing for the use of e-invoices

·Communication standards and transmission channels (e.g., inter-bank; proprietary; open networks) used for e-invoices

·Regulatory frameworks (e.g., digital signatures) that make e-invoices legally valid

·Business models adopted (e.g., fees applied- monetary value, where possible) to deliver e-invoice services

Existing market research shows with evidence that the benefits to corporate clients are significant. Especially the current economic scenario encourages corporate decision makers to identify sources of internal savings and operational efficiency. E-invoicing promises important returns. This keeps the item high on the corporate treasurer’s agenda, accelerating the business opportunities for software vendors, service providers, and the activities of government and standard bodies that aim to reduce roadblocks tied with disparate fiscal, legal and technical communication protocols.

The issue we encounter is rather with banks, which are still facing the dilemma of what to do to benefit from this trend.

Our opinion is that the real problem resides in the revenue model. Banks have tried to sell “paper-to-bit” conversion (i.e., dematerializing) services, encountering two major, and still unresolved, issues:

How much to charge

Who should pay

How to convince small companies to move from paper-based invoices to electronic B2B processes (i.e., onboarding)

Our recommendation to banks is to look at the “big picture” of e-invoicing: Electronic invoicing is part of a larger end-to-end (i.e., integrated) process.

While the “basic” electronic invoice process starts from the conversion of the invoice document from paper to electronic, down to the archiving of the invoice, a more “integrated” electronic invoice process encompasses the end-to-end order-to-payment cycle: Order, Delivery, Invoicing, Payment.

In this case, all documents (e.g., purchase orders; sales orders; shipping documents; invoices; payment documents; credit and debit notes) are digitized in electronic format, and all are automatically reconciled and archived.

There is no business for banks in the service of dematerializing a paper invoice (i.e., the “basic” e-invoice process). Our experience shows that corporates expect a free service for this, such as having an e-banking account. It has become part of the “cost of doing business” for a bank.

This part, and all the related onboarding, technological and connectivity aspects, should be handed off to a service partner, at no charge for the end user.

The business for banks comes from the services provided along the other integrated processes (i.e., Order; Delivery; Payment), where they can attach supply chain finance products and services.

Bottom line

The electronic invoice becomes the wagon that carries all the necessary data and information that a bank must analyze and use, to spot the business opportunities of its corporate customers. Therefore, banks should invest in analytics and supply chain visibility applications.


  • Hello Enrico,

    It may be worth looking into the inter-bank invoicing process for additional insight into the approach that many banks have towards e-invoicing.

    Paper invoices are still the defacto means of communication but increasing pressure from the client side of the relationship is forcing the service providers to rethink their strategy.

    The service differentiators are often quite marginal so the service providers seem less concerned about charging their clients to provide electronic invoices and more concerned about retaining them.

    We are currently helping 2 global banks to drive cost-savings and process efficiencies in this area and I'd be more than happy to discuss our experiences in more detail.


  • @Michael Bush

    Let's find some time to talk about your experiences.
    I'd be more than happy to learn more about this subject.

  • Hi Enrico,

    In your research project have you had a look at the Scandinavian countries and the banks present there?

  • Preben Lybekk :Hi Enrico,
    In your research project have you had a look at the Scandinavian countries and the banks present there?

    @Preben Lybekk


    @Preben Lybekk

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Asia-Pacific, EMEA, LATAM, North America