For many businesses, e-invoicing might seem like the norm. New research commissioned by Avalara, however, shows that it is far from that. It found that only 71.5% of companies issue e-invoices and, oddly, only 68.2% say they receive them.
What is also odd about this research is the invoice value. According to respondents, small and large companies say the average invoice is $752 and $790, respectively. But for mid-sized businesses that jumps to $924. There was no obvious reason for that jump in the survey.

Alex Baulf, VP of Indirect Tax & E-Invoicing at Avalara, said, “The UK has a golden opportunity to modernise its invoicing infrastructure and boost business productivity through this technology.
“With HMRC and HM Treasury exploring e-invoicing, we were keen to understand its potential for economic growth, outside of its role in reducing fraud and improving payments.
“As momentum builds across Europe, the UK must put its businesses first and not get left behind.”
The benefits of e-invoicing for the business
At 53 pages in length, there is a lot of data in this survey titled, The Business and Economics of E-Invoicing that was carried out by the Centre for Economics and Business Research (CEBR). Importantly, there is a good degree of analysis of the data. That makes it different from many surveys Enterprise Times receives.
The report authors identify three overarching e-invoicing benefits covered by this research:
- Improved invoicing productivity
- Reduced time to pay and risk of late payments
- Mitigating tax fines and fraud
Each of these has obvious business benefits if aligned with other systems. There is also compliance and regulatory benefits here.
Improved productivity requires greater system integration. Take expenses, the process for gathering receipts and documenting what expenses are to be recharged has to be easy and connected to invoicing. But it is more than just the costs involved. It requires details of whom the invoice will go to, which might include being onboarded into another organisation’s accounts.
Reducing the time for payment and the risk of late payment also requires other integrations. For example, the involvement of the legal department to escalate to the courts to recover money. Another integration is with sales systems to restrict the sale of new goods. When it comes to paying, there has to be tighter integration with stock management and goods verification.
The last point is more nuanced than just mitigating fines and fraud. Regulators are pushing Making Tax Digital (MTD) agendas. At present, this is to improve the speed of recording and payment of taxes. The next stage will likely be a greater analysis of filed data to spot fraud. One example is comparing both sides of the invoice process – issue and receipt. Is it a real invoice? Has it been changed?
Staff savings and gains for the business
One of the interesting things we learn is that the CEBR used the data gathered from respondents to model the impacts of e-invoicing. This allowed them to look at the granularity of an invoice, expand to a business and then the wider economy.
One measure that they looked at was labour costs and what could be saved from a move to e-invoicing. The focus was on saving time to prepare and manage invoicing and then reallocating that time to other finance requirements. What it doesn’t do is identify those other roles, such as greater fraud prevention. It also makes an assumption that employers would redeploy staff rather than reduce staff.
The methodology was more complex than just calculating savings from fewer staff in the invoicing process.
The report states: “We adopted a time value of money approach. In line with traditional economics and accounting methods, this follows the reasoning that improved speed of payment through e-invoicing increases firms’ cashflow and access to capital. There is a definitive monetary value to this time improvement and earlier payment, as firms can utilise that capital earlier to generate returns.”
Among the findings from this are:
- E-invoicing saves around 19 minutes per invoice compared to manual invoicing.
- The US, France and Australia would save more time than the UK, Germany and India.
- Productivity in the US would equate to $15.16 per invoice. In other countries, it would be less, with Germany achieving just $8.36.
- The US would see an economic impact of $116.2bn per year. France would see $17bn and Australia 15bn. These savings are skewed by the number of businesses and the number of transactions. It did not model wider adoption by sole traders and micro businesses.
Improving the speed of payment
All businesses want to see an improvement in the speed with which they are paid. The common delays are often lost invoices, not received, or a cheque in the post. But will e-invoicing actually remove these? In reality, it all depends on several factors.
The survey says that invoices are paid, on average, 1.4 days faster than manual processing. In some countries, such as the UK and Australia, it significantly improves the speed with which invoices are paid. That speed of payment is key to the push for e-invoicing. The authors say that faster payment frees up capital, allowing companies to use it more effectively.
However, what the survey doesn’t do, and this is disappointing, is focus on the system integration required for this to work. E-invoicing is not simply using an accounting package to create and email an invoice. That approach still leaves open the ability to “lose” invoices into junk email folders and claim they weren’t received. It also fails to address prompt payment.
Proper e-invoicing requires that both systems be fully integrated. It means invoices are placed directly on the customer’s system. And that brings complications. To make it work, organisations need to be onboarded (have access) to the payments system to file their invoice. That can be a long and complex task, and often, for the first invoice, it can take months. Even then, it is not always smooth, as any changes at the payee end affect all suppliers.
When invoicing across borders, especially into India, one of the countries in this report, withholding taxes mean that only partial payments are made. E-invoicing also requires e-payment to make this a smooth process. If not, delayed or late payments will persist.
Enterprise Times: What does this mean?
This is a well thought out, well-constructed piece of research and delivers a wealth of information. It stands in contrast to 95% of the reports and surveys that Enterprise Times receives. Those are categorised as sending out surveys, hoping for results, and writing a few words. Most are little more than lazy analysis of the responses, with zero qualitative research or valuable content.
The benefits of e-invoicing and e-payment are well articulated and shown. For businesses, there is much to like about this approach. However, there are costs, especially for SMEs as well as significant barriers. Among those costs is getting an accounting system that can be trusted. That system must be subject to cybersecurity controls to prevent fake updates from changing payee bank details to divert payments.
Other challenges can be the difficulty of getting onboarded and the usability of the supplier system. At an API level, this should be simple, but too many large organisations, especially technology vendors, still require some degree of manual entry of invoices into their system under the guise of e-invoicing. It shows that there is much to be done to standardise what the term means.
However, when this works well, the reduction in cost for companies on both sides of the payment process is evident. For compliance teams, anything that reduces regulatory risk is also a bonus, and this will do that. For regulators and governments, there is a lot of interest in what this can deliver in terms of tax payments.