COLUMBUS, OH -- (Marketwire) -- 06/23/10 -- Sterling Commerce, an AT&T Inc (NYSE: T) company, today announced the results of a global survey that examines how companies manage the complexity of cross-border invoicing. The research highlights the cost savings to be gained by automating country-specific mandates for cross-border invoicing around processing, archiving and auditing; notably through the elimination of error-prone manual processing and the reduction of associated penalties and fines. The survey found that, on average:
- Each paper invoice error costs companies $53.50 to rectify.
- Accounts payable (AP) departments receive 35 percent of invoices in paper form.
- Only a quarter (25 percent) of invoices are sent via a fully-automated electronic method.
"The survey demonstrates the benefits of full electronic invoicing," said Ken Ramoutar, vice president, Product and Industry Marketing, at Sterling Commerce. "However, going from a paper invoice to an electronic invoice is only half the battle; the true success of e-invoicing depends on fully understanding the regulatory criteria of processing, automating, archiving and auditing, which varies geographically. This is especially relevant to U.S. companies doing business in countries that impose a value-added tax (VAT). Fines can be severe if companies attempt to claim back VAT in breach of regulation. From our experience with customers, however, awareness of the need to prepare for e-invoicing regulation is lower in the U.S. than elsewhere."
Approximately half (49 percent) of companies experienced two audits or more over the previous three years. Of the companies surveyed that had experienced VAT audits:
- More than one in three (34 percent) incurred fines from tax authorities.
- Nearly one quarter (24 percent) incurred fines for not being compliant with customer mandates.
The survey finds that by moving from manual, paper-based invoice processes to fully automated, electronic invoice processing, businesses can achieve:
- Cost savings of 90 percent on the AP side, as manually-processed invoices cost, on average, $30 per invoice to process, while fully-automated invoices average only $3.50 per invoice to process.
- Cost savings of 44 percent in the accounts receivable (AR) departments, where manually-processed invoices cost, on average, $4 per invoice and fully-automated invoices $2.25 per invoice to process.
- Error reduction of 37 percent on all types of invoices.
- Storage costs savings - With more than 40 percent of companies retaining archives for up to 10 years, these will be significant.
- Savings amount to 67 percent on AP and 32 percent on AR invoices, with fully electronic invoices of all kinds costing on average $1.30 to store, while paper AP invoices cost $3.90 and paper AR invoices $1.90 each to store.
The survey, commissioned by Sterling Commerce and conducted by Forrester Consulting in December 2009, was undertaken across accounts payable, accounts receivable and tax management functions in enterprises with annual revenue ranging from $250 million to $5 billion in the United States, United Kingdom, Germany, France, Netherlands, Sweden, Spain and Italy. It looked at enterprises in the manufacturing, retail, communications/media and distributions/logistics industries. The research data was used to create an e-invoicing savings calculator, which is available at: www.sterlingeinvoicingsavings.com.
"Companies trading internationally must be alert to their financial and regulatory responsibilities, or risk fines and sanctions," said Ramoutar. "Companies are usually aware of VAT regulations in their own country, but often lack the depth of knowledge required for compliant cross-border invoicing. In addition to the cost of fines, unsuccessful audits also may affect 'vendor rating,' making a further case for e-invoicing. Simply creating an electronic document such as a PDF invoice is not sufficient to achieving compliant e-invoicing and avoiding fines."
Today, Sterling Commerce also announced that Irish Dairy Board, an early adopter of comprehensive cross-border e-invoicing technology in Ireland, has implemented Sterling e-Invoicing. See related release, "Irish Dairy Board Realizes Cost Savings on Cross-border Invoicing with Sterling e-Invoicing," at http://www.sterlingcommerce.com/about/news/Storage/20100623+Irish+Dairy+Board+e-invoicing.
About Sterling Commerce
Sterling Commerce, an AT&T Inc (NYSE: T) company, helps companies optimize and transform their Business Collaboration Network to accelerate revenues and reduce costs. Sterling Commerce provides more than 18,000 customers worldwide with applications and integration solutions to connect, communicate and collaborate inside and outside their enterprise. More information can be found at www.sterlingcommerce.com.
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