Fast and easy: Once your business gets on the Peppol network, InvoiceNow can make it a lot easier for employees to send and receive e-invoices using a standardized format. Photo credit: Unsplash
Invoices are an integral part of any business, but processing invoices – whether you are sending or receiving them – is by no means an easy task.
Not only that, it is also fairly time-consuming – and according to this survey, processing invoices also gives employees a considerable amount of stress.
Stressed employees are not as productive as happy, relaxed ones. Worse, harried employees who are pressed for time are likely to make mistakes on invoices, which can delay when payment is made or received.
As hybrid work becomes more common, it would make sense for SME owners to adopt InvoiceNow so that their employees do not frequently have to return to the office just to process invoices.
As both the supplier and buyer have to be on the InvoiceNow network to send and receive e-invoices to and from each other, the more SMEs that come onboard this initiative, the better.
We elaborated on the perks of InvoiceNow in this article, as well as how to start using it.
But here are five benefits of the nationwide e-invoicing initiative that was kickstarted by the Infocomm Development Authority of Singapore (IMDA) in 2019, which you may not know about.
InvoiceNow offers a host of benefits to small and big businesses alike. Credit: IMDA
Any buyer or supplier who has a Peppol-ready ERP or accounting platform and registered for e-invoicing can send or receive e-invoices via InvoiceNow.
Before it was renamed by IMDA to InvoiceNow in 2019, it was known as the Peppol (Pan-European Public Procurement On-Line) e-invoicing network.
Imagine an invoice that comes in a standardized format and which is sent electronically through a seamless exchange of data and without the need for manual data entry, and you have InvoiceNow.
Commonly used formats such as PDFs, Word documents and scans still require some level of manual input, so they are not considered e-invoices.
In the Peppol network, a common XML format known as the BIS (Business Interoperability Specifications) Billing 3.0 UBL is used to exchange documents.
This common standard allows users to use their own accounting and ERP platforms, yet still enables them to exchange invoices with other parties who may not be using the same platform.
The documents are sent, converted and received by relevant parties through Access Points on the Peppol network.
This automated information exchange is made possible through what is termed as the Peppol 4-Corner Model – an information exchange network comprising firstly, the supplier, the sender’s access point, the receiver’s access point, and lastly, the buyer.
Through the platform, the sender of the invoice can view system-assisted dropdowns, as well as readily available customer and product information. The process will be sped up if there is already existing Order Information in the system.
What this means is no more manual work and hunting around for the necessary documents. If your business sends hundreds or thousands of invoices per month, imagine how many hours or days you will save.
Read more about the Peppol network here and the frequently asked questions here.
You won’t need to worry about your invoices getting lost in the mail or wait for the postal service to send out your invoices so your buyers can make payment.
With InvoiceNow, everything is done electronically. All invoices sent are also trackable.
Clean data minimizes human intervention and allows information to be sent in a standard, structured format.
This means there is no manual data entry or scanning that may result in errors, data manipulation or put the SME at risk of fraud.
More complex e-invoices can have three or four layers of risk management checks so invoices can be vetted safely yet quickly.
You can also get paid (and pay others) more easily and quickly as the system offers e-payments via PayNow.
All you need to get validated across different financial systems is your Unique Entity Number (UEN) for InvoiceNow and PayNow. Your unique Peppol ID will be tied to your UEN.
Major banks such as DBS, OCBC and UOB and other solution providers are also offering SMEs help with payments in this regard. This means you can transfer your payment files to these Access Point Providers for payment processing.
The more SMEs get onboard InvoiceNow, the more opportunities there will be for businesses to benefit from other payment options such as invoice financing and invoice factoring.
Currently, only a few service providers offer these options. Invoice financing or factoring is essentially a way in which SME owners can get paid more quickly instead of the requisite 30 to 90 days.
For invoice financing, financiers typically offer an 80% to 95% payment advance of the invoices pledged. For invoice factoring, the financier undertakes the collection of the payment on behalf of the SME owner after buying the invoices and paying the SME owner 80% of the invoices.
In both instances, a collection fee is charged by the financier.
By visiting the Singapore Peppol Directory, you can find out if your buyers or suppliers are on the InvoiceNow network like you are.
Just key in their company name or UEN, and you’re all set!
Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore for free. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.
Belinda loves thinking about random stuff, and collecting useless bits of facts and trivia. She often roots for the underdog, and believes the world needs more happy endings.
