Could e-invoicing save small businesses up to $40k a year each?
ENTERPRISE application company SAP SE is reporting significant financial gains among its small business clients who have switched to e-invoicing.
Most Australian small-to-medium sized businesses (SMBs) could save tens of thousands of dollars a year by transitioning to e-invoicing, according to SAP’s new report – The connected SMB: Embracing digital strategies to fuel growth.
The research found Australian SMBs processed an average of 168 invoices each month. With a Deloitte study estimating that e-invoicing could deliver savings of up to $20 per invoice, Australia’s SMBs could save up to $40,320 a year.
SAP’s Australia and New Zealand SMB segment leader, Sofiane Ainine said the benefits were clear, with 75 percent of those who have transitioned saying the biggest impact had been time and money saved.
“Running an SMB comes with its challenges but switching to digital processes has been key to the survival of many businesses during the pandemic,” Mr Ainine said. “It frees up time and money to focus on other priorities like developing new products and finding new customers.
“Now is the time for SMBs to review their adoption of technology. This will help them through the current crisis and set them up for future growth.”
More than half of the survey respondents said e-invoicing had also improved the accuracy of record keeping (56 percent) and was more secure (53 percent).
Australian Small Business and Family Enterprise Ombudsman, Bruce Billson said, “The pandemic has highlighted the importance of technology adoption in helping small businesses innovate – increasing efficiency and productivity, attracting new customers in different markets, improving customer and employee experiences. This helps them create more jobs.
“It’s encouraging that the research in this SAP report shows SMBs accelerating digital technology adoption. Technologies like e-invoicing improve process efficiency and, importantly, will see small businesses paid more quickly for the products and services they provide.”
BUSINESSES OVERCOME FEAR OF ‘E-SWITCH’
The SAP research suggests that the fear of switching to e-invoicing is bigger than the challenge of implementing it, according to SAP, with 88 percent of SMBs that had made the jump saying it was easy, and almost one in five (18%) making the transition without external support.
SAP’s Mr Ainine said some businesses would still need help to get there, with integrating the process into computer systems (36%) and understanding what software to use (31%) perceived as the biggest challenges.
Nearly half (46%) of SMBs are mostly digital in their invoicing and recordkeeping. Of this group, 26 percent sought advice from their internal IT department, followed by an external IT company (24%), their accountant (26%), a consultant (22%) or government (18%).
“SMB owners shouldn’t feel like they are alone on this journey,” Mr Ainine said. “There are many sources of support ready to help them overcome hurdles and make the most of opportunities by sharing experiences and advising on the best approaches for their business.
“It’s about taking it one step at a time, learning what works and implementing digital initiatives that align to their goals.”
THE OUTLOOK IS A DIGITAL FUTURE
The past 18 months has fast-tracked the transition to digital processes for many SMBs and increased their appetite for transformation. The SAP research found most SMBs who used e-invoicing (75%) were looking to digitise other business processes. Payroll was the top focus (72%), followed by forecasting (42%), debt collection (38%), customer experience (33%), and talent management (28%).
Over half (54%) of SMBs said they would digitise all account and account management processes within the next two years, with 44 percent planning to do so within the next 12 months.
To help them get there, more than half (57%) of business owners/managers agreed that increased government support in the form of information, services, subsidies and grants would help their business continue to drive forward digital initiatives and change.
MINING BUSINESS CASE STUDY
Mining equipment manufacturer Geographe needed to update its business technology in support of its strategic vision to expand into new markets and refine its product sets around continued innovation.
Implementing an intelligent ERP system built on SAP S/4HANA Cloud has helped the business reduce lead times by as much as 50 percent, according to Geographe CEO, Sam Hyder. He said automated core processes and greater operational efficiencies had reduced some workloads by more than 15 percent.
“Due to COVID-19, we have moved to hybrid working,” Mr Hyder said. “Having a scalable IT landscape with greater transparency and real-time data helped us become more responsive to customer needs.
“We can now confidently predict customer demand and optimise production, inventory, and our supply chain accordingly.”
The connected SMB research was commissioned by SAP Australia and undertaken by YouGov to understand where Australian SMBs stood with their current e-invoicing and broader digitisation efforts. The sample was 802 Australian business owners and managers with less than 200 employees. Fieldwork took place between June 29 and September 13, 2021.