Electronic invoicing promises significant gains for European companies

by Derk Bleeker, the Chief Commercial Officer at Sage.

We are in the middle of an unprecedented digital revolution, where automation and artificial intelligence (AI) are profoundly transforming the way businesses are run and managed.

Electronic invoicing, or e-invoicing, offers a path for businesses to dramatically improve their productivity, get paid quicker and bolster their competitive position on the global stage. However, despite the potential of this game-changing digital leap forward, many small and medium-sized enterprises (SMEs) in Europe are still trapped in manual, time-consuming, and inefficient processes.

Fully embracing this digital transformation will increasingly become a necessity as European governments mandate e-invoicing—but, as our study shows, SMEs should really see this as an incredible opportunity to enhance their competitiveness and productivity.

Be more productive and get paid 20% faster

Our recent study, conducted with over 9,000 SMEs worldwide, clearly demonstrates that SMEs who have adopted electronic invoicing see a reduction of up to 44% in the time spent processing invoices, and get paid 20% faster than those who do not using e-invoicing. These improvements in turn result in better cash flow, better liquidity, and the reallocation of saved time to higher-value tasks.

The benefits of electronic invoicing don't stop there, either. Adopting electronic invoicing also serves as a springboard for broader digitization within companies, paving the way for the integration of advanced technologies such as AI. By automating invoicing processes, businesses can collect and analyse data more efficiently, enabling faster and better-informed decision-making.

Strengthening the competitiveness of European businesses on the global stage

The macroeconomic impact of electronic invoicing is equally impressive. Across the European Union, reallocating time previously spent on payment tracking to more productive activities could lead to an annual labour productivity increase of up to 2.6%. In the United Kingdom, this increase could reach 3%. These productivity gains are crucial for strengthening the competitiveness of European businesses on the global stage.

However, for this transformation to be fully effective, close collaboration between governments and businesses is essential. Governments need to create financial incentives and provide technical support to facilitate SMEs' transition to electronic invoicing. Initiatives like the Digital Kit programme in Spain, which financially supports SMEs in their digital transformation, are examples to follow.

Electronic invoicing is much more than a simple administrative tool. It is a catalyst for a more efficient, productive, and secure economy. By adopting this technology on the widest possible scale, European companies can not only improve their competitiveness but also prepare for a digital and AI-powered future.

Derk Bleeker is Chief Commercial Officer accountable for Sage's commercial performance and operations globally.

He joined Sage in 2014 and has held a number of commercial, finance, M&A and leadership roles. He most recently served as president, EMEA.

Prior to Sage, Derk led European Corporate Development at Danaher and worked at HgCapital, a leading technology private equity fund.
You can follow Derk on X @BleekerDerk.)

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