Bottomline Technologies: It pays to be paperless – Steve Carter

Bottomline Technologies recently launched a new initiative with the SWIFT network - an end-to-end, fully automated e-invoicing service. Head of e-Invoicing Solutions Steve Carter explains why it is set to revolutionise operations within accounts departments, saving money for senders and recipients alike.

The so-called digital age has been characterised by a single trajectory. As technologies develop, processes that were formerly reliant on paper become fully computerised, saving businesses tremendous amounts of time and money. Not all these developments, however, are happening in sync.

Certain operations languish some way behind others in terms of the extent to which they can be conducted electronically. Until very recently, invoicing was one such example. Notoriously complex, the movement towards digitalisation has been held back by a barrage of logistical issues. It is only now, as these issues are overridden, that electronic invoicing has started to become a viable option.

Bottomline Technologies, a leading global provider of payment software, is at the forefront of the present changes. Established more than 20 years ago, the company specialises in managing financial processes. With over 9,000 customers across an array of industry sectors, including the majority of the FTSE 100, Bottomline is a watchword in services such as purchase-to-pay automation and financial process outsourcing.

Not until recently, however, has SWIFT e-invoicing been on the agenda. Bottomline’s new initiative alongside SWIFT went live in September - making the company the first global SWIFT e-invoicing provider - with the first customer using the solution to deliver invoices into Nordea Bank in Finland.

“I’ve seen a lot of evolutions in my time,” says head of e-Invoicing Solutions Steve Carter, “but this is a real opportunity to move from what is effectively 18th-century-style technology through to digital trade, and deliver against the European Commission’s Digital Agenda.”

Paperless invoicing

Electronic invoicing is not simply a matter of disdaining to post your PDF invoice, and e-mailing it instead. “A PDF is just an electronic view of a piece of paper,” says Carter. “So you still have all the associated overheads and costs. As well as that, it goes through a public network that isn’t secure, and you can’t guarantee delivery. You don’t know if it’s been received or not, and it gets lost.”

This initiative represents a radical breakthrough in invoicing. It treats an invoice not as a document but as data, and while users are provided with an accessible view of that data, transmission is wholly digital. The invoice flows from a customer’s financial application through the network, whereupon it is automatically integrated into the recipient’s account system. End-to-end automation is guaranteed. One of its principal advantages is that information is completely traceable.

“You have to be a member to send an invoice,” says Carter, “and because it’s traced all the way through, you know who sent it, when it was sent and what network passed it. And then the sender gets a receipt saying the invoice was picked up and handed on to the customer. So it totally removes the risk associated with email and takes human intervention out of the process.”

Crucially, this leads to heightened efficiency, more streamlined operations and significant cost savings. The emphasis here is on reducing supply chain expenses, eliminating factors such as the need to manage paper or PDFs. It also helps to speed up processes within accounts departments. E-invoicing customers no longer need to manage multiple contracts or relationships with different providers, relying instead on one easy access point, one way of delivering the invoices and one simple supplier-to-buyer transaction. Call volume is reduced because the status of the invoice is already transparent to all concerned. E-invoicing, in short, is thoroughly straightforward, and in terms of practical implementation it is designed to be as seamless as possible.

Businesses can send invoices through the SWIFT network to any other SWIFT-enabled company, and if that customer or trading partner is not connected, they can join and receive invoices for free. “Any customer who is currently with Bottomline will be provided with an e-invoicing address,” says Carter. “This will be enabled via a web portal that allows you to download the software and install a free application.”

There is also an additional time-saver in that neither party needs to worry about their data format. While the network itself uses ISO 20022 – an international invoice standard managed by SWIFT – it is compatible with whichever format the client and its trading partner choose to use.

“We take the customer’s data through their connection, however it comes, and convert it into an ISO format,” says Carter. “We pass it through the SWIFT network to the receiver, where the receiver will pick up that ISO message and convert or upload it into the format required.”

Suppliers can therefore be confident that the data content is valid the moment it enters the network, as well as resting easy in the knowledge it will be fully comprehensible to buyers. Full security of information is guaranteed. Customers connect via a secure web service call, from inside their firewall to the SWIFT e-invoice service. This dispenses with the risk of interception or tampering at any stage, and makes it ideally suited to organisations like banks in which data privacy is paramount. Many banks, in fact, are starting to introduce e-invoicing services to their customers, with Nordic countries paving the way.

“Nordea Bank sends an SMS to the client, and the client can respond with a payment request, or ask the bank to finance their invoice,” says Carter. “And that’s really the other spin-off benefit of the SWIFT initiative – suddenly, the large mass market of small business enterprises can access these services. It will help the banks finance that sector of the market in a more efficient way.”

Regulatory hurdles

If it seems peculiar that e-invoicing has taken so long to get off the ground, it is worth bearing in mind that international compliance has historically not been on its side. “E-invoicing is a minefield in terms of regulation,” says Carter. “Each country has its own legislation around the creation of the invoice, as well as different corporate authority bodies. What the European Commission identified is that this was a big blocker to e-invoicing. And it’s down to the risk of fraud – they want to ensure they can see what’s going on from a tax and VAT perspective.”

The initiative with SWIFT is thus designed to meet a plethora of local requirements. As an EDI-style transaction, the major concern throughout its development was not the human-readable part of the process, but rather its compliance and auditability. These concerns have been addressed from point to point. As such obstacles are ironed out, e-invoicing looks set to become ever more prominent.

“If you ask what it’ll look like by 2020, when we’re all supposed to be using e-invoicing,” says Carter, “it could be as simple as – I’m a small enterprise, I log onto my online banking. I can see a list of all the invoices that are awaiting payment and those I’ve submitted. I can select the invoices I want to pay through the online banking portal. And more importantly, I can also ask my bank for help – since they’ve got true visibility of my business they can finance me in a more dynamic way.”

Moving forward, it is likely that full automation will become the dominant model for the supply chain. Customers will therefore be able to work with trading partners to get the best value possible, replacing the unwieldiness of paper with the seamlessness of electronic transactions. As to what changes will need to take place in the interim, Carter draws an analogy between e-invoicing networks and mobile phone operators.

“This is a new dawn for e-invoicing,” he says. “We’re moving away from proprietary networks that don’t talk to each other to a more open environment, very much like the telephone system. If we had to worry about what network our friends were on when we called them, it would never have taken off. With e-invoicing, we’re now at that peak where networks need to be more open, and interoperate with each other in a transparent way.”

In the meantime, Bottomline’s new initiative places the company on the cutting edge of e-invoicing services. Simple, efficient and cost-effective, e-invoicing is a true turnaround for accounts departments, placing invoicing squarely in the midst of the digital revolution.