A Basware guidebook to the new world of open commerce

1. Enabling open
commerce
A Basware guidebook to the
new world of open commerce

3. CONTENTS:
06 ........... Open Commerce: Why now?
10 ........... Challenges to open commerce
14 ........... An open and shut case?
18 ........... A circle of benefits
22 ........... State of the nation
26 ........... A best practice approach
30 ........... Good reviews

4. ENABLING GLOBAL COMMERCE
Introduction
As the Chief Research Officer of a firm that is focused on
defining, advancing, and promoting the purchase-to-pay
strategies, processes, and technologies that drive business
value and accelerate organizational transformation within
the finance and procurement departments of an enterprise,
I believe that the timing of Basware’s Enabling Global
Commerce Guidebook could not be better.
C
onsider that in recent years, most And, while globalization, innovation, and
finance leaders have been firsthand the resulting increase in competition have
witnesses to the dramatic impact helped to streamline and improve business
on their organizations of globalization performance, they have also helped to
and open trade, which have combined increase business volatility and supply
to simultaneously expand their supply management complexity.
chains and tighten the economic linkage
to their trading partners. Companies in Against the backdrop of rapidly evolving
all regions and of all sizes are increasingly supply chains (and customer bases), how
global and the need to support business organizations communicate, collaborate,
relationships with global trading partners and transact with their trading partners
has become a priority of the first order. and the enabling platforms that they

5. utilize take on increasing importance Above all else, managing change at an
to business operations and business ever-increasing pace requires agility.
results. As this book highlights, Toshiba Agile finance leaders and the purchase-
is a great example of a company that is to-pay organizations that they oversee
leveraging technology to connect with have shown the value and importance of
more customers and suppliers in a way getting these strategies correct. Basware’s
that improves the relationships and drives Enabling Global Commerce Guidebook
efficiencies. But, Toshiba is far from the is an excellent resource for business
only company leveraging technologies to executives seeking to understand and
drive efficiencies, increase effectiveness tackle these issues for the first time and
and expand operations to drive significant for those seeking to extend the value they
and lasting value from its purchase-to- gain from their P2P operations today.
pay operations. Finance leaders must not
only focus on this area, they must take a
leadership role or risk losing ground to the
competition.
ANDREW BARTOLINI
In the twenty-first century, the only Chief Research Officer
constant in business will be change. Ardent Partners
“In the twenty-first century,
the only constant in business
will be change. Above all
else, managing change at
an ever-increasing pace,
requires agility.”

6. A BASWARE GUIDEBOOK
Open Commerce: Why now?
06/07
Open Commerce:
Why now?

7. Like many elements of today’s business world, international
trade is something that we tend to believe only became a reality
with the invention of the internet. In an age in which millions
of transactions are made every minute from nation to nation,
global commerce is something that for many of us has only
been possible thanks to major developments in financial and
commercial technology.
The reality, of course, is very different World Trade Organization in 1995, major
indeed, and the colourful, dramatic and milestones in the latter half of the 20th
well-documented 3,000-year history of Century have forever changed our approach
recognized trade routes such as the Silk Road to global commerce.
and the King’s Highway attest to this. Global
commerce, international business, world Recently, however, the pace of this
trade; call it what you will, it has been with us development has quickened. Just a few
as long as we have been able to cross borders decades ago, the prospect of doing business
with goods for sale. Although the modern overseas was an uncommon one for the
business landscape is very different to the majority of finance and procurement
historical, the principles remain the same: managers. Likely confined to their home
gain competitive edge by plying your unique territory, and with a relatively small but
trade in a range of territories. well-known circle of potential suppliers and
vendors, international trade would have sat
Developments throughout history have very much on the “nice to have” list for the
refined the process of doing business across majority.
borders, but never more dramatically than
story have
in the past few decades. From the signing of throughout hi
Developments g business
free trade agreements between European ocess of doin
refined the pr e dramatically
powers to the ultimate foundation of the
across bord ers, never mor
s.
st few decade
than in the pa
13.5%
Rate of world trade growth estimated by the
World Trade Organisation in 2010, the fastest
year on year expansion ever recorded

8. A BASWARE GUIDEBOOK
Open Commerce: Why now?
08/09
!
Innovation is key to the renewed vigor with which
we view world commerce. In a market in which
product or service differentiation and fresh ideas
can be key to gaining dominance, the opportunity to
draw from a vastly wider set of experiences, thought
processes and market approaches can be invaluable.
For even the smallest of companies, doing In any market in which product or service
business with the rest of the world has never differentiation and fresh ideas can be key
been logistically easier. New trade routes, to gaining dominance, the opportunity to
much like their historical predecessors, draw from a vastly wider set of experiences,
have been opened up by new technology thought processes and market approaches
from simple collaborative communications can be invaluable. Without opening
tools to the most sophisticated CRM and our horizons to the developments and
finance platforms. But technology is only one innovations that are taking place in other
element of a much wider story and, in terms territories, it is difficult to grow.
of cause and effect, arguably an enabler
rather than a driver. In essence, doing In these uncertain times, risk too plays a part.
business overseas is now possible for almost There is undoubted danger in doing business in
everyone, but the will to do so needs to exist a microcosm, particularly in terms of the supply
in the heart of the trader. chain. When suppliers in one market stumble,
either economically or in production, buyers who
Innovation, too, is key to the renewed vigor rely solely on that select group will find their own
with which we view world commerce. business impacted. Conversely, those who have

9. In 2009, exports and imports
in the European Union alone
totalled some
$3.2
trillion
spread the risk across multiple territories are start and remain ahead of the curve will reap
likely to find that not only can they switch focus the true rewards.
more easily to a more stable market, but that they
ilable to so many,
can gain a competitive advantage by doing so. With a wider market ava
lost in terms of the
there is too much to be
and relationships
And, to turn that point on its head, major experience, innovation
ticipate.
strategic gains can be made by businesses open to those who par
willing to expand into overseas markets.
With a wider and more diverse supplier base The new economic reality has forced
comes the opportunity to strengthen those companies to re-think many of the
relationships, to access new customers, new processes related to acquiring goods or
partners and new ways of working that can services. Coming out of the downturn to
have a lasting impact on the way a business a post-recessionary world means that
grows and develops. companies are ready to invest in growth,
but with a newly adopted caution. Supplier
More than anything else however, the sense relationships are inevitably affected by this,
is that in a growth-ready world, the cost of especially in the case of trading globally,
not participating in this new era of open everything from currency volatility to cash-
commerce is too great. With a wider market to-cash cycles can have an impact on said
available to so many, failing to implement relationship.
supporting platforms and processes can
impact on everything from topline growth Market leadership necessitates not just
to bottom line profits. In a world made the vision and drive to participate, but also
ever smaller by technology that breaks the requisite process excellence to help
down borders both physical and electronic, create a lower risk, more efficient operating
market dominance can be won and lost in environment. And it’s with that sentiment
a comparative instant, and only those who that our story really begins.

10. A BASWARE GUIDEBOOK
Challenges to open commerce
10/11
Challenges to
open commerce
For many businesses, open commerce presents vast potential
for growth. It can facilitate finding the best suppliers for
any given product or service, both in terms of price as
well as quality, and help further optimize working capital
through integrating procurement and finance processes and
negotiating better terms with suppliers.
But it is not without its challenges. While political and trade
barriers continue to fall, helping to establish routes of entry
to new markets for businesses worldwide, other fundamental
issues remain. Success isn’t just about doing business
internationally, but efficiently too, and there are plenty of
obstacles standing in the way of any business attempting to
achieve that.
So what are some of the biggest issues currently facing any
business looking to capitalize on the opportunities of trading
internationally? Here are our top five challenges to successful
open commerce.

11. 1 TAX COMPLIANCE
For any company purchasing
various jurisdictions who stay up-to-date
on local VAT regulations. This approach
goods or services, complying with Value delivers two major benefits: it outsources
Added Tax (VAT) requirements is essential. all the complexity of VAT compliance to
Local government legislation defines how a reliable partner, and it saves significant
VAT is collected, what information must be time and money in accounts receivable and
included on every invoice, and what kind of accounts payable operations.
audit trail every business must provide for tax
inspectors. Since every country has slightly
different rules, complying with VAT regulations
2 CURRENCY AND COMMODITY
VOLATILITY
around the world is a complex challenge. While international markets may now feel
Yet failing to comply has serious financial relatively stable in comparison with the
consequences. past couple of years, volatility continues
to be a watchword across the globe.
The European Union has issued a directive Regular fluctuations in both currency and
that will harmonize VAT rules in 2013, meaning commodities continue to play a dramatic
that electronic invoices will be considered role in any business’ bottom line, especially
equal to paper invoices across Europe. when set against a global market in which
However, some differences between member political, social and even environmental
states will still remain, not to forget that every upheaval can dramatically alter a territory
non-EU country will continue to maintain its almost overnight.
own distinct rules.
For those trading internationally, this
One way for any company with operations in volatility is not so much a barrier as it is
multiple countries to deal with VAT regulations a vital consideration. Even at a domestic
is to join an open e-invoicing network. Such
networks include service providers from

12. A BASWARE GUIDEBOOK
Challenges to open commerce
12/13
level, market uncertainty can make it much with new contacts, so too are they adding
harder for a business to plan and forecast more and more links into their overall supply
effectively making it all too easy to find chain. Without careful management, that can
that stock and cash flow quickly become open the ‘home’ party up to greater risk as
unbalanced. Scale this to an inter-continental their international trading picture becomes
or global level however, and that imbalance increasingly complex.
can quickly reduce trading opportunities and
lead to diminishing capital flows. The same is true for suppliers themselves
who – in many countries – are duty bound to
3 TRADE REGULATIONS
Just like tax legislation, trade
know both the end use and, indeed, end user of
the goods that they are supplying. While both
regulations can shift and alter dramatically supplier and buyer-screening services exist, it
on a near-daily basis. And, in this new world can often be easier to work with a pre-approved
of open commerce, businesses trading network, members of which have been through
overseas are under greater scrutiny than ever a comprehensive due diligence process.
to ensure that they are complying with the
laws and legislations laid down both in their
own territories and those in which they are
4 ENABLING SUPPLIERS TO
TRADE ELECTRONICALLY
importing and exporting goods. Effective open commerce depends not only on
being able to find the customers and suppliers
Trading internationally tends not only to that will enable you to grow, but being able to
grow a buyer’s supplier base, but also to access and transact with them as efficiently
lengthen their overall supply chain. As they and easily as possible. In unknown, untested
move into new territories and do business territories, this can be far from simple.
While e-invoicing in isolation might not nullify some
of these barriers to open global commerce, with the
right approach and the right partners to deliver it, it
can be a vitally important tool for anyone wanting to
trade efficiently and effectively overseas.

13. In this growth ready world, markets are Navigating the challenges
constantly shifting and achieving sufficient Managing these issues successfully in a fast
traction can depend on having the agility to moving and competitive landscape can require
quickly and efficiently enable suppliers to switch the support of technology, expert partners or
transacting electronically – all at the lowest both. While it may be a seemingly small piece
possible cost. Ensuring that you are gaining of a very large puzzle, e-invoicing is key in
access to both the most innovative and impactful unlocking these challenges. For any company, no
supply base whilst ensuring that transactional matter what size, e-invoicing helps lower costs
relationships with suppliers don’t impact on your and reduce errors in invoicing and processing.
own cash position can be a fine balancing act. But not just this, it also helps to break down
some of the barriers to international trade.
5 CASH FLOW VISIBILITY
While we’ve already touched on cash flow These assertions are supported by a piece of
management in the context of stock and currency worldwide research conducted by Basware in
volatility, working capital on its own can also very early 2011 (discussed in more depth later in this
quickly become a barrier to open commerce if not guide). In a survey of more than 1,300 people
managed in the right way. Overseas expansion working in finance, AP or procurement roles
can require significant capital investment, with globally, excellence in e-invoicing was cited by:
spend on everything from product validation to • 91 per cent as a way of mitigating compliance
distribution fast mounting up. or auditing risk
• 85 per cent as key to better forecasting
Because of that, cash flow must be treated • 98 per cent as a route to slicker operational
with much greater scrutiny than ever, even in efficiency
a situation where it has potentially never been • 92 per cent as a tactic for improved supplier
more difficult to do so. and buyer relationships
• 93 per cent as a way of improving cash flow
and working capital management

14. A BASWARE GUIDEBOOK
An open and shut case?
14/15
An open and shut case?
Open commerce would not exist without the freedom to trade
and work with the organizations that you choose. While many
political and legal trade restrictions prevent 100 per cent free
reign, businesses are – for the most part – unrestricted to choose
which suppliers they buy goods and services from and, of course,
who they in turn supply. Indeed, free trade is one of the founding
principles of modern global business.
FINANCIAL
FREEDOM

15. we’re
In the current environment that’s a huge
positive, as trading internationally can be a fast
OPEN
route to growth. As companies become bigger,
they tend to experience a similar growth in From computers to networking equipment,
their supplier base. With some of the world’s cleaning services and mobile phones to office
biggest corporations hooked to supplier stationery, all businesses use a range of
networks that number in the tens of thousands, suppliers for their needs. The chances of you
complexity tends to scale with company size. sharing the same mobile network, bank or
IT vendor as all of your suppliers is very slim
For both large corporations and small and indeed, and that possibility becomes even
medium sized businesses however, managing slighter as you get bigger and trade with more
an increasingly large supplier base can equate partners in more markets. While that might not
to an equally sizable challenge. Today’s be an issue when it comes to the majority of
procurement and purchasing personnel are business functions, it has big implications for
under greater pressure than ever to react e-invoicing, particularly when trading overseas.
to a range of issues that vary from cost to
security, responsiveness to resilience, not to Independent research company Billentis
mention the growing importance of the green estimates that there will be around 530
and sustainable supplier. Factor each of those e-invoicing operators in the global market
issues into rapid expansion of the supplier by the end of 2011, and your customers and
base, and the task becomes greater still. suppliers could be using any number – or
indeed any combination – of those companies
E-invoicing has a big role to play in making that for sending e-invoices and purchase orders.
a smoother process. Being able to transact That’s particularly true of overseas customers
documents such as invoices and purchase and suppliers, many of whom may be using a
orders electronically, manage the payment of local market e-invoicing provider rather than a
your suppliers and, of course, the receipt of global operator.
payments for your own services or products
through one network can bring much needed Because there are so many vendors currently
simplicity and speed to the purchase-to-pay populating the marketplace, there is also
process. Like any business service solution a wide mix of e-invoicing data standards
however, there is no guarantee that your and formats. Different vendors process
suppliers and customers will be using the same information in different ways, and that can
e-invoicing system as you. complicate an already intricate situation even
230,000
companies actively trading through
the Basware Open Network

16. A BASWARE GUIDEBOOK
An open and shut case?
16/17
further. As the party in the strongest position with businesses in Latin American and
(usually the buyer) determines the data the Caribbean could expect to spend an
format, the other is usually bound to obey. And average of 192 hours doing so. That is a huge
since each connection between supplier and difference, and for anyone working across
customer needs to be individually built and multiple territories, a major consideration
maintained on an ongoing basis, this ‘point-to- to take into account if they are choosing to
point’ model carries costs for both parties. set up individual connections with all of their
suppliers and essentially managing the process
That situation becomes even more complex themselves.
when you add global VAT compliance into the
mix. PriceWaterhouseCoopers, which in 2010 The alternative, of course, is to use a service
carried out a comprehensive study of VAT that can remove that complexity for you.
regulations across 145 countries1, found that Many global e-invoicing operators are able
the time for an ‘average’ company to comply to alleviate that burden, offering a range
with those requirements varied wildly across of behind the scenes services to ensure
territories. While a business trading in the EU that every invoice you send and receive is
would spend around 73 hours in establishing already tax and VAT compliant. Using a global
VAT compliance for instance, those working partner can also make it easier to manage the
A CLOSED NETWORK CAN RAISE COSTS FOR ALL INVOLVED

17. complexities of a globally dispersed supplier As the number of businesses adopting the
base, offering a network that can help you practice grows fiercely year-on-year, more and
connect and trade with a range of suppliers more suppliers and customers expect to be
across the world without needing to develop able to transact electronically as the de facto
individual lines of communication with each. standard, free of artificial obstacles and hurdles.
But, just as open commerce is dependent on
Unfortunately, things still aren’t quite as being able to trade with whomever you want
simple as they sound. While, as evidenced by to, the future success of e-invoicing hinges
the reasons above, there is a very clear need on being able to easily bill and pay a range of
for a networked solution, some vendors have businesses without them needing to be locked
opted to make that network a closed one. into the same network service provider.
Whilst offering a service that handles format
conversions and enables suppliers and buyers sinesses in
Those working with bu
to work together, they do so by insisting that all
Latin Ameri can and the Caribbean
suppliers lock into the same network as their an average of
could expect to spend
buyer. This is bad news for suppliers. And, by doing so.
192 hours
proxy, it’s eventually bad news for buyers too.
Because the chances of all a supplier’s It’s this situation that gives life to the
customers being part of that one closed philosophy behind the Basware Open Network –
network are negligible, they’ll find themselves a philosophy that is aware of the growing need
needing to sign up for multiple e-invoicing for a unifying presence in the marketplace,
networks just to continue doing business. As one that cuts through divisive issues of data
could be expected, these costs in having a formats, multiple operators and supplier
network forced upon a supplier don’t tend to be activation costs. With interoperability at its
absorbed. In fact, they have a nasty tendency core, the Basware Open Network is the very
to manifest themselves elsewhere in the buyer- definition of open commerce, allowing buyers
supplier relationship, often as hidden costs and suppliers to work together even if they’re
attached to products and services and so – using different e-invoicing vendors in different
further along the road – the buyer suffers too. territories. Freeing buyers and suppliers from
any concerns over whether they can easily
A suitable metaphor for this approach is to connect, it instead allows them to focus on
consider what business would be like if, to gaining greatest advantage via increased
work or communicate with another company, e-invoicing volumes.
they had to be registered with the same bank
or mobile phone network as yours. Expecting Through this greater focus on maximizing ROI
your suppliers to switch to your mobile phone from e-invoicing comes the opportunity for
operator so that they could call you, or to profitable growth. With a clearer opportunity
move to your bank so that they could pay you, to capitalize on its cost saving, efficiency
would result in both confusion and bad feeling driving potential, businesses across the globe
between the buyer and supplier. can lay the ground for expansion, refining and
refreshing their core processes to ensure an
Interoperability has become one of the most optimum level of performance.
important words in the world of e-invoicing. 1
http://www.pwc.com/gx/en/tax/pdf/impact-of-vat.pdf

18. A BASWARE GUIDEBOOK
We’re in this together: a circle of benefits
18/19
We’re in this together:
a circle of benefits

19. The most successful businesses are based on a firm
understanding that they’re in a two-way relationship. Whether
it’s consumers, corporate customers, partners or even
governments, external parties place a range of pressures on
business, and the ability to listen, understand and adapt to
those pressures is key to thriving in any economic environment.
Exactly the same is true when it comes the biggest companies being hamstrung by
to suppliers. While, other than in extreme teetering supply chains can still be found in the
circumstances, suppliers are always likely finance pages and procurement press. Under
to play second fiddle to the demands of pressure themselves to reduce spend and
the buyer, the quality and strength of that support cash positions, CPOs and purchasing
relationship is now vitally important. Although departments have typically transferred
buyers – primarily CPOs – retain control of that this stress to suppliers via reduced fees and
relationship, they also find themselves with aggressive terms. While that can be punishing
the responsibility of ensuring the health of enough on its own, another, more insidious
their supply chain, both as a means of assuring form of pressure has increasingly been slipping
a supply and also as a primary source of into the buyer-supplier relationship.
innovation.
For a long time, the prevalent industry attitude
In Basware’s first Cost of Control research has been that suppliers will follow the lead of
report1, professors Adrian Done of the IESE their customers when it comes to adoption of
Business School in Barcelona and Mark e-invoicing networks. Independent technology
Frohlich of Indiana University’s Kelley School and market research firm Forrester Research
of Business affirmed that “with regard Inc, in the July 2009 report, Enterprises
to supply chain risk, CPOs should remind Should Push Supplier Networks To Deliver
themselves and educate others of the risks Interoperability, stresses that “currently, most
involved in continuing to seek cost savings supplier networks base their business models
through beating-up on suppliers. Such on signing up a few enterprise customers that
aggressive sourcing strategies have generally then persuade – or sometimes force – their
not weathered well, resulting in failure either suppliers to use their chosen service.”
via ‘tsunami’ events or a more gradual ‘soil
erosion’ effect.” “The problem for suppliers,” the report
continues, “is that they have to incur fixed
“We have seen that supplier failure helps no- costs to integrate with all of their customers’
one,” they concluded. Indeed, stories of even chosen networks or single-buyer portals. This
1
Published November 2009

20. A BASWARE GUIDEBOOK
We’re in this together: a circle of benefits
20/21
Suppliers Buyers
Open Network
E-invoice operator E-invoice operator
Basware partner Basware partner
isn’t a big problem for companies with a few an essential multi-territory strategy as it
high-volume customers, but it can create a both mitigates risk and provides options for
huge overhead for small businesses and those competitive sourcing.
with many low-volume accounts.” The net
result can be that expected savings for buyers How best then, can a buyer ensure that
pushing compliance with their own network suppliers enjoy the mutual benefits of their
turn into hidden costs as suppliers seek to working relationship? The Basware Open
recoup the investment. Network has been specifically designed to
help ensure that both buyers and suppliers
Trading internationally can intensify the alike enjoy a range of benefits from working
importance of the supplier relationship. For a together. Some of these benefits fall solely
company taking tentative steps into foreign into each user’s camp, but many also cross
territory, strong supplier networks are key, and the buyer-supplier boundary and create a
a standard of trust is necessary to do business true virtuous circle, rewards and returns
with peace of mind. Having such a network in flowing backwards and forwards between
place can also be integral to growth, with the the two parties.
knowledge that you have a steadfast supplier
base serving as an excellent foundation for On the buyer side, a number of benefits can
growth. A diverse supplier base, one that be drawn from paying suppliers more quickly
gives you a range of options for trade, is also and smoothly. The Open Network doesn’t just

21. provide open access to a range of e-invoicing
operators. It also helps to deliver faster,
more efficient and accurate payments via
straight-through-processing, eliminating
the need for any manual intervention. By
performing comprehensive invoice checking
against stringent key criteria, as well as any
custom-defined factors outlined by the buyer,
invoices are processed and paid quickly no
eroperability
matter which data formats are being used. A system that places int
rk
Any exceptions are flagged early and, as at its heart, the Open Netwo
encourages sup pliers and buyers to
with validation criteria, rules for rejection er before.
can be comprehensively tailored for each work together like nev
organization’s needs.
Of course, that’s just a feature set. But in For both buyers and suppliers, the Open
practice, it also translates to a much more Network also offers a true community within
efficient invoice lifecycle, driven by error which they can operate. Buyers are able
reduction, faster processing and improved to enlist the services of a growing pool of
productivity thanks to a reduction in manual qualified suppliers, thanks to the network’s
inputting. That’s good news for buyers, global address book function, while suppliers
because a subsequent opportunity opens can reach out to a range of potential customers
up for them to negotiate early payment already operating within the framework. That
strategies with their suppliers. It’s little possibility also serves as a huge enabler when
wonder that around 90 per cent of Open it comes to global commerce; the potential
Network users have adopted the facility to for buyers and suppliers to find each other
automatically process their invoices. and transact across the purchase-to-pay
value chain regardless of which territory
Suppliers, beyond the core benefits of not they operate in, helping to stimulate both
having to implement numerous e-invoicing accessibility and growth.
network connections at a cost and the
potential to get paid faster, can also benefit A system that places interoperability at its
from the simplicity of the network’s numerous heart, the Open Network encourages suppliers
activation services. From day one, suppliers and buyers to work together like never
are given the support they need to begin before. By strengthening that relationship
e-invoicing in whichever format they choose: through a cycle of mutual benefits, the Open
through an e-invoice sending service, a Network helps to enable commerce on a truly
dedicated portal for submitting invoices and global scale, providing a platform from which
purchase orders, or even using PDFs and buyers and suppliers alike can operate in an
printed invoices. environment that supports them both.

22. A BASWARE GUIDEBOOK
State of the nation
22/23
State of the nation
How businesses around the world are putting
suppliers at the heart of their e-invoicing programs
72% 92%
Speeding up invoicing process: Improving supplier relationships: Interoperability between
e-invoicing solutions
26%
34%
Benefits of an open network over
traditional closed e-invoicing networks
Suppliers/customers
Increased flexibility 66%
Increased efficiency/
cost savings 61%
Common standards/ 5%
consistency 54%
Reduces costs to
our suppliers 51% 35%
Reduced complexity 46%
Environmental benefits 39% Major challenges 26%
Better supplier 29% Some challenges 35%
relationships
Don’t know 10% Not an issue 5%
Don’t know 34%
0% 20% 40% 60% 80%

23. However you decide to approach e-invoicing as a way of
supporting global trade, having an understanding of the
behaviors and approaches of other users can pay dividends.
Useful not just as a way in which to compare and benchmark
your own organization against others, deep insight into the
e-invoicing practices of other businesses can also help you to
develop a strategy that suits your own organization based on
its ambitions and objectives.
In early 2011, Basware conducted a detailed Indeed, concerns over the potential cost
global investigation into how more than of e-invoicing to suppliers is the most
1,300 businesses worldwide have been using frequently cited reason for not having
e-invoicing as a way of achieving global extended e-invoicing reach within an
growth. Surveying businesses from ten organization, at 46 per cent. From updating
territories , the research asked them to share contracts to enable two way e-invoicing
their thoughts on a range of subjects relating (49 per cent) to better communicating the
to e-invoicing. It also drilled down into their benefits of e-invoicing externally (40 per
views on the Open Network approach and its cent), the overriding sentiment is that the
potential benefits, with the findings compiled ability to rapidly enable suppliers to transact
in a report entitled E-Invoicing: A Global View. electronically is a key factor in the success
or failure of an e-invoicing development
Out of the findings, we can draw two major program.
strands of conversation that underpin some
of the very challenges we have described in When looking at the compelling reasons
the earlier chapters of this guide. While the to extend e-invoicing adoption within an
benefits of transacting invoices and purchase organization, cost reduction is a high priority
orders electronically are widely recognized for (71 per cent). So too is the need to speed
most (two thirds stating that it had a positive up the overall invoicing process (72 per
impact on their business), adoption levels cent) and the potential to improve supplier
are still low. Only 9 per cent of respondents and customer relationships (38 per cent).
stated that they have high levels of e-invoice Importantly, 92 per cent said that e-invoicing
processing. According to the research, one of presented a real opportunity to improve the
the key challenges companies are facing has buyer-supplier relationship.
to do with supplier reluctance.

24. A BASWARE GUIDEBOOK
Peer review
24/25
How then, does this tie into Basware’s Open surveyed, and improving relationships with
Network approach? For many, there are customers and suppliers is important for 34
significant concerns over the detrimental per cent of respondents. While these figures
effect that a non-interoperable e-invoicing are – comparatively – low, they become very
network can have on both their own company interesting when placed against the need to
and their customers and suppliers. 63 per improve profits and top line performance,
cent of businesses surveyed said that lack of which 45 per cent of respondents cited as a
interoperability between operators caused priority. Against this fundamental element of
problems for their company, supported by business performance, the quality of external
the 61 per cent who said that this was also relationships and cash flow optimization are
an issue for their suppliers. Contrastingly, deliverables that more than hold their own.
an open, connected approach is rated highly
for improved flexibility (66 per cent), better One very important point to be taken
efficiency and cost savings (61 per cent), from the survey is that, if you feel that the
consistency of e-invoicing data formats (54 invoicing procedures in your organization
per cent) and reduced costs to suppliers (51 could be improved to support wider
per cent). financial objectives, you are not alone. An
overwhelming 93 per cent of respondents
Partnership and performance believe their processes could be improved
As well as considering the specific issue of either somewhat or significantly.
e-invoicing, the research asked respondents Interestingly though, around one third (40
to outline their key financial priorities for the per cent) of those surveyed said that they
year. Perhaps unsurprisingly, in the context do not currently send invoices electronically.
of a challenging few years, efficiency and Of those that do, some 56 per cent send less
the refinement of working practices sit at than a fifth of their invoices electronically
the top of the agenda. Some 73 per cent of on a monthly basis, meaning that there is a
respondents said that improving operational significant scope for building on that impact.
efficiency was a priority of the year, the most
popular response by some margin. On the flip side, just 18 per cent of
respondents said that they don’t receive
Promisingly however, this pressing priority any invoices electronically, with more than
does not seem to be getting in the way of half (56 per cent) receiving them by email
other strategic objectives. Optimizing cash as PDF or equivalent attachments. While 49
flow and working capital management are per cent of respondents said that they use
high on the list for 48 per cent of those an e-invoice processing system to deal with

25. 63%
of business surveyed said
that lack of interoperability
between operators caused
problems for their company
these invoices however, somewhat ironically, a
further 28 per cent admitted to printing off the
invoices in order to deal with them. 22 per cent
presently opt not to use any invoice scanning
61%
said that this was also an
issue for their suppliers
services.
In contrast an open,
That absence of an end-to-end solution for so connected approach is
many respondents appears to manifest itself rated highly for improved
in a range of problems. Once invoices fall out flexibility
66%
of the automatic processing cycle, they cause
a range of issues, with 64 per cent citing time
spent entering invoice details into their systems
as one of the biggest challenges. 40 per cent
said that time was being spent on getting the
invoices approved, and 28 per cent saw issues
with matching invoices to Purchase Orders. Most better efficiency and cost savings
61%
worrying of all, 35 per cent said that invoices
could be misplaced or lost altogether.
Contrasted with the earlier statistics highlighting
the potential of e-invoicing as a strategic
enabler, these numbers seem to represent risk consistency
54%
for some businesses. Cited repeatedly as a tool
that can play a big role in a company’s biggest
strategic ambitions as well as its – more routine,
but no less important – tactical processes,
e-invoicing for many is still not being deployed
to full effect. In an environment in which
optimization and efficiency are key to achieving and reduced costs to suppliers
51%
growth, a gap remains in what e-invoicing can
do for businesses and what it actually is. At the
heart of that sits the eminently conquerable
challenge of enabling suppliers to start
transacting electronically, and it is here that the
greatest focus should lie for anyone.

26. A BASWARE GUIDEBOOK
Developing an approach: best practice
26/27
Best practice –
an achievable goal
Knowing what other companies think about e-invoicing and how
they are approaching it can be a useful way of benchmarking your
own progress. But when it comes to developing a strategy for your
own business, it’s important to take the very specific circumstances
of your company into account.
If you’re thinking of using e-invoicing as a way
of supporting growth or helping you to move
towards a more open approach to commerce,
then there are some vital initial steps to take.
Here, we present our top five ‘first steps’
to take for anyone looking to improve their
overall purchase-to-pay program in a way that
will support them through global growth.

27. Like many technological solutions,
the more you put in, the more you
get out. e-invoicing is at its most
effective when dealing with the
highest possible volumes.
Push the envelope on benefits realization
1
Cost saving is a great reason to start transacting electronically, but that’s
only one part of the equation. If you’re really looking to make the most out
of an e-invoicing strategy, you’ll need to take a long look at what else you can
gain from it, from improved customer and supplier relationships to a more
streamlined and compliant business model.
Cash is king, always
No matter how successful or stable your business, cash flow is always a top
2 priority. As you grow, especially into new territories in which you might not
be as confident with your supplier and customer network, being able to
accurately forecast and manage your incomings and outgoings is absolutely
essential. E-invoicing can help you to achieve that, so factor in how an
improved cash flow process can help you to grow.
Break down the barriers
As we’ve discussed elsewhere in this guidebook, trading overseas can put
3 a number of obstacles in your path, as well as opportunities. Consider what
those obstacles are, which will cause your business the most pain, and then
how you’re going to tackle them before they become an issue. Most are easily
surmounted with the right technology or right partners, but it’s important to
address them before they become an issue and not after.
Scale is key
Like many technological solutions, the more you put in, the more you get out.
4 Transacting purchase-to-pay process related documents electronically is at
its most effective when dealing with the highest possible volumes (though it
can also make a big difference to even the smallest of operations). Ensuring
that you have a long-term plan to move as much of your invoicing processes to
electronic is essential, and that can depend on…
Bringing your suppliers along with you
No matter how ambitious your plans or sophisticated your e-invoicing solution,
5 the ability to enable your suppliers to transact electronically is absolutely
essential to the ongoing success of the program. Reaching that ‘critical mass’
of supplier enablement should be one of your number one priorities when
outlining your e-invoicing program, as it’s there that you stand the most to
gain on cost savings and efficiency .

28. A BASWARE GUIDEBOOK
Developing an approach: best practice
28/29
A case in point:
When it comes to e-invoicing that Q: Klaus, you’ve said already that your
benefits both buyers and suppliers, customers were the prompt to move onto
e-invoicing. What exactly happened?
Toshiba’s recent experiences A: In early 2009, one of our biggest
stand out as a compelling example customers notified us that they were
to follow. moving onto an e-invoicing platform and
that they needed us to follow suit. The
customer was using Basware, and so we
As a major supplier to businesses became part of what you would call the
globally, it was customer requests ‘Supplier Activation’ program – essentially
that sparked Toshiba to consider Basware project managing the set up of
e-invoicing. Here, in a Q&A with IT e-invoicing capabilities on the supplier side,
in this case us.
Manager of Toshiba TEC Germany
Imaging Systems GmbH, Klaus Dieter Q: So what happened next?
Leifgen, we look at how the company A: We’d been considering switching to
cut invoicing costs by 75 per cent and e-invoicing ourselves for some time, so that
communication from Basware was basically
has developed plans to activate its
the prompt that we needed. We’d already
entire customer base. looked at the business case internally, and
it was compelling. A review by our internal
postmaster, for instance, had found that by
the time a paper invoice had been printed,
taken to the post room, put in an envelope,
stamped and sent out, the cost was € 1.61
per invoice. That compared to just € 0.40
for an e-invoice. So, in many ways, the
activation message from Basware was just
the final link in the chain.

29. We’ve reduced the cost
of invoicing by around
75 per cent, which is a
huge saving for us.
Q: Was Basware always the number one to communicate with the greatest number
choice for you? of e-invoicing operators, ensuring that we
A: Yes and no! The fact that one of our biggest could satisfy as many of our customers
customers was already using Basware was as possible. Basware’s Open Network
obviously a big tick in the box for us. But of approach did that.
course, we have very stringent selection
criteria for any vendor that we use, so we Q: What are the benefits that you have seen
conducted an independent review of the so far?
company’s capabilities. So, “no” in the A: There has been a good mix of what you
sense that we investigated other options, might term ‘hard’ and ‘soft’ benefits. We’ve
but “yes” in the sense that Basware came reduced the cost of invoicing by around
out in first place! 75 per cent, which is a huge saving for
us. On the ‘soft’ side, we’ve been able to
Q: And why was that? develop better customer relationships,
A: Flexibility was key. Unlike some other and we’ve also been able to get in touch
businesses, we have many more customers with numerous other customers who had
than we do suppliers. We knew that it’s the enquired about e-invoicing previously and
buyer that tends to drive the format choice say “hi, we can do that for you now”.
when it comes to e-invoicing, so we wanted That’s been a great experience.
to be using a vendor that would allow us

30. A BASWARE GUIDEBOOK
Good reviews
30/31
”We were very satisfied with the way Basware handled the
program and with the quality of work. As we continue to
centralize our accounts payable operations, we expect to move
closer and closer to our goal of 100 percent electronic invoicing.”
Erol Engin, Manager of Accounts Payable, Cargotec Corporation
“Basware makes it easy to manage cashflow and track due dates.
Now we can see which payments we have made, and which are
coming up and plan our cash accordingly.”
Marilyn Van Zant, Accounts Payable Manager, Frozen Food Industries
“Very early on our senior management saw e-invoicing as the
route to achieving world-class operational performance. We
wanted to gain control of what had been a time-consuming and
error-prone paper-based process, replacing this with a tool
that would give us more consistency and control over invoice
handling. Alongside cost-savings and significantly reduced
processing times, we’ve been able to steer our business towards
more goal-oriented purchasing.”
Soile Hiekkasalmi-Linna, Development Manager, Metso

31. ”E-invoicing is a must. There is no future for hard copy invoices.”
Mervi Mäkelä, Financing Manager, Finnair
“We’ve been able to do advanced reporting with Basware Invoice
Processing, and use it to conduct budgeting top down and
improve our spend visibility. It saves significant time and money,
enables enhanced tracking and easy auditing, and provides
the accuracy, efficiencies, visibility and control we need. We’re
even using it to monitor suppliers and look for opportunities to
consolidate invoices and early payment discounts.”
Daniel Garuti, Vice President and Accounting Supervisor, Loomis Sayles
“Eliminating the paperwork has significantly speeded up our
processes, streamlined our operations and delivered a more
rigorous accounting process. Our central accounts payable
group can now enforce our corporate procedures
and standards.”
Chris David-Pipe, Group Vice President, Information Technology, Crown Worldwide

32. www.basware.com Contact us
Basware Corporation
Linnoitustie 2, Building Cello
P.O. Box 97
FIN-02601 Espoo, Finland
Tel. +358 9 879 171
Fax. +358 209 3410 244